The travel industry has had a tough couple of years. The global recession and the pound's loss in value has resulted in 20 per cent fewer British people travelling abroad. A bad time to be in the travel business? Not according to intrepid MBA graduates like John Bigos and Chris Ford, whose established niche businesses are expanding, or Berangere Florin and Puneet Jaggi, fresh out of business school and determined to buck the trend with their new travel companies.
Florin and her business partner Eugenie Triebel had the idea for Le Vélo Voyageur, which designs biking itineraries and organises the travelling details, while doing an MBA at ESSEC near Paris. ESSEC Ventures provides support for student entrepreneurs and helps them with a business model.
"Our advisors were concerned that we get the logistics of travel and services right, so we spent a lot of time on those details," says Florin. "We were offered seed funding, but decided to use our own money to get the business going." ESSEC Ventures has a voucher scheme for two hours of free professional advice for start-up businesses. "A lawyer helped us with the terms and conditions of the business, which it's very important to get right."
Bicycling holidays seem to be flavour of the month, ticking the boxes for greenness and physical exertion. Finding such a niche market is also a potential ingredient for success according to Derek Moore, chairman of the Association of Independent Tour Operators (AITO). "Many small independent companies are surviving better than expected because they tend to be specialists in a particular type of holiday and are more knowledgeable about their product," he says.
Jaggi worked in the travel industry for eight years and, after completing his MBA in 2010 at the London School of Business and Finance, set up his own company, Travel Decorum. Once established he plans to focus on specific travel niches, including religious pilgrimages. Very few agencies offer pilgrimages and they are usually poorly regulated, he claims.
When you're in a family business, an MBA can help you to be heard, according to Dounia Hassabou, a 2010 graduate of Rouen Business School, who took over her family's Moroccan travel agency. "My family are my colleagues and now listen to me with respect. Having an MBA increased my confidence," she says.
One would expect that a business consultant specialising in turnaround situations in large plcs wouldn't need a confidence booster, but John Bigos admits that his MBA gave him the extra self-belief to argue with banks, while regulatory authorities and professionals treat him on an equal footing.
When Bigos finished his MBA at Surrey Business School in 2000, he thought he could immediately walk into a plc directorship. Instead, he was asked by contacts to do various company turnarounds, which led him to investigate – and eventually buy – the London Duck Tour Company.
Niche, quirky and losing money, it presented a challenge. Expensive-to-maintain, vintage amphibious vehicles used in the 1944 D-Day landings transport visitors round the sites of London on land and river.
From making a loss of £600k in 2003, the company got the Bigos turnaround treatment and last year its turnover was £3m, carrying 162,000 tourists. The MBA opened Bigos's eyes to the realities of running a business. "I used to think that marketing and HR were luxury overheads, but I learnt through the MBA that you need four ingredients for a successful business – corporate strategy, financial management, marketing and a culture of trust and openness."
He warns that you need to be open-minded about where the MBA might lead you. "I took on a failing company in an unfamiliar sector and now have a unique product that is one of the tourist attractions of London."
'I realised that I needed some help with my strategic thinking'
Chris Ford set up his mountain biking business, CycleActive, in 1997. With a background as a chartered accountant specialising in insolvency, Ford had practical experience in business and how it can go wrong. Undaunted, he moved to Zimbabwe, founded the cycling holidays specialist and, by 2009, had five staff and a turnover of £300,000. But the business had reached a plateau in growth.
"My big business experience as an accountant involved short-planning timescales rather than long-term strategy, which you need to run your own business. I was self-taught, picking up ideas as I went along and hoping they'd work. I realised that I needed some help with my strategic thinking."
Back in the UK, Ford decided that a part-time executive MBA at Lancaster University Management School would provide him with the knowledge to run his business better.
Students spend a week every two months on a topic such as strategy, marketing or finance, then put their learning into practice in their own organisation. "I did a strategic analysis of our competitors, looking at a market we're considering expanding into. My tutor, who's a strategy guru, made valuable contributions. We researched a lot of detail about our competitors, what they were doing and how we measured up. We saw how to increase market share and started right away. In effect, CycleActive got valuable consultancy advice through my MBA."
Ford's MBA experience is already having an impact on the business. "When you're relying on intuition you're continually looking at what you've missed," he explains. "Now I have the confidence to take advantage of new opportunities. I've also become more outward-looking."
If he'd done an MBA before setting up CycleActive he says he would have saved "loads of hassle and tons of money. I could have made it a better business more quickly, but I've got a fantastic quality of life. We lead the field in mountain biking and education, and our office is in a castle (at Brougham Hall, Cumbria), where my dog Banjo sits under my desk."