If you enjoy traveling, meticulous planning, and helping others have unforgettable experiences, then you should consider becoming a tour guide. Becoming a tour guide can be quite inexpensive, you can manage very well with limited staff and little upfront cost.

However, you have to realize that this is a job that rewards people who hustle, who are good at networking, and don’t mind the uncertainty of the gig economy. While there are numerous benefits to being a tour guide, starting a tour guide business is hard work.

Just like any other business, many varying pieces will have to come together before you achieve success. And with numerous resources out there it can be quite challenging to even know where to start. If you are interested in this line of business, here is a blueprint to help guide you through the stages.

Steps on How to Start a Tour Guide Business

  1. Conduct Market Research

What sort of tour guide business do you intend to start? Most importantly, what kind of tour business does the industry or your local community need? You need to carry out detailed market research to find out what kind of tour business the market needs.

Researching your location is another vital factor in starting your tour guide business. You also need to know every interesting landmark in the location you intend to start the business. Study the local culture, foods, etc.

In addition, understand your competitors before you even start practicing as a tour guide. Carry out comprehensive market research on their tour packages, their approach, pricing, etc. Note that this information will help you put together creative tour packages for tourists that others are not offering.

a. Who is the Target Market?

Although you might land an occasional local customer, have it in mind that a good number of your business will come from travelers visiting your area on vacation or from students on educational trips.

b. Is Tour Guide Business a Profitable Business?

Yes. In this line of business, every tour comes with its own set of costs; however, with a well-designed marketing strategy, your tour guide business stands to draw in substantial profit in the first year.

c. Are There Existing Niches in the Industry?
  • Adventure Guide
  • Museum Guide
  • Walking Tour Guide
  • MotorCoach City Guide
  • Museum Guide
d. Who are the Major Competitors?
  • Cosmos
  • Classic Journeys
  • G Adventures
  • Exodus Travels
  • Intrepid Travel
  • Kensington Tours
  • Thomson Family Adventures
  • Eldertreks
  • Naturetrek
  • Bindlestiff Tours
  • Amadeo
  • Discovery Nomads
  • Infinite Adventures
  • Growth International Volunt
e. Are There County or State Regulations or Zoning Laws for Tour Guide Business?

Yes. When you are looking to start a tour guide business, the first thing you are advised to do is to check the requirements with your local tour body. Have in mind there may be specific health and safety regulations, depending on your city and the type of tour you intend to offer.

You might have to take a special course to start running your business legally. If you realize that it will take time to acquire the necessary documents, skip to the part about registering your business and take care of that first. Note that you can do all the work around designing your tour while waiting for the registration documents. 

f. Is There a Franchise for Tour Guide Business?
  • Cruise Planners: $2,295 – $23,367
  • Expedia Cruiseship centers: $165,495 – $281,990
  • Dream Vacations: $3,245 – $21,850
  • Travel Leaders Network: From $100,000
  • Duong Hoa Nang: From $4,300
  • Marlin Travel: $100,000 – $150,000
  • Uniglobe Travel: $10,000 – $100,000
  • Travel Leaders: $2,270 – $16,910
  • Discovery Map International: $35,250 – $44,950
  • iTrip Vacations: $123,400 – $152,700
  • UniGlobe Travel: $46,600 – $63,500
  • Results Travel: $25 – $10,400 
g. What Do You Need to Start a Tour Guide Business?
  • Computer
  • Scheduling software
  • Website
  • Marketing materials – business cards and pamphlets
  • Insurance
  1. Choose a Memorable Business Name

When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.

Some of the catchy business name ideas suitable for a tour guide business are;

Creative Tour Guide Business Name ideas
  • Adventure Assurance
  • Cruise Nation
  • Tour Explorer
  • Navigate Tours
  • Free Ride Tours
  • Choice Places Tours
  • Peaky Explorer
  • Choice Tours
  • King’s Adventure
  • Paramount Escape
  • Voyage Escort
  • Tour Paradise
  • Local Experts
  • Wide Tours
  • Walking Traveler
  • Park Trip
  • Neighborhood Safari
  • Treasures Walk
  • Earth Wonder
  • Underwater Tours
  1. Register your Business

a. What Type of Business Structure is Best for Tour Guide Business?

Note that every state and country offers different options for registering a company. The options most often are a proprietorship, partnership, or corporation. However, don’t forget that the business structure you choose will depend largely on your plans for your business, and how you intend to fund it. If you are from the United States, note that forming an LLC is perfect especially if you intend to separate business from personal liabilities.

b. List Steps to Form an LLC
  • Select a Name for Your LLC.
  • File Articles of Organization.
  • Pick a registered agent.
  • Decide on member vs. manager management.
  • Establish an LLC operating agreement.
  • Adhere to other tax and regulatory requirements.
  • File annual reports.
c. What Type of License is Needed to Open a Tour Guide Business?

This will mostly depend on the state, city, or county you plan to operate your business. Have in mind that each jurisdiction has varying rules and requirements for tour guides so you should check with your local government or your lawyer.

Some places may require a tour guide license, coupled with certain training and certifications. In California, Washington, Hawaii, Iowa, and Florida, you will need a Seller of Travel license. Canada also has licensing requirements that vary by location, and in the UK, you will need an Air Travel Organiser’s License.

d. What Type of Certification is Needed to Open a Tour Guide Business?

In most locations, you won’t need any specific licenses or certifications, but licensing requirements will vary by state and county. However, if you choose to get certifications to boost your reputation, here are the top choices to consider;

  • ITMI Tour Guide Coaching & Certification
  • Local Tour Guide & Experience Host certificate
  • Certified Interpretive Guide (CIG)
  • Certified Hospitality and Tourism Management Professional (CHTMP)
  • Certified Tour Guide/Director
  • Travel and Tourism Professional (TTP)
  • First Aid, CPR, and AED Instructor
e. What Documents are Needed to Open a Tour Guide Business?
  • Seller of Travel Addendum
  • Federal tax identification number
  • Business plan
  • Boat registration
  • Business name registration certificate
  • Insurance certificate 
f. Do You Need a Trademark, Copyright, or Patent?

No. In this line of business, you may not need a patent, trademark, or copyright to protect the services you provide.

  1. Do your Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Tour Guide Business?

Unlike many start-up businesses, starting this business will require very little starting capital. Note that a good number of tour guide business owners start out this business from the comfort of their home, investing in a small storefront or kiosk in the heart of the city, as revenue and clientele base grow.

However, it is quite inexpensive to start a tour guide business, especially if the business owner is the only employee. Plan to spend between $5,000 and $10,000 in initial startup costs.

b. What are the Costs Involved?
  • Setting up a business name and corporation: $150 – $200
  • Licenses and permits: $200 – $300
  • Insurance: $100 – $300
  • Business cards and brochures: $200 – $300
  • Website setup: $1,000 – $3,000
  • Location security deposit: $0 – $5,000
  • Initial marketing budget: $500 – $1,500
c. What Factors Determine the Cost of Opening a Tour Guide Business?
  • Location
  • Business Size
  • License and Permits
  • Target Audience
  • Services Offered
  • Branding, Promotion, and Marketing Plans
  • Insurance
  • Supplies and Ongoing Expenses
d. Do You Need to Build a Facility?

No. Most people who start this business do so from home to keep costs low. But as your business grows and your clientele base expands, you will need to hire workers and may need to rent an office. While you may not have any need for a big facility, search for commercial space to rent in your area on Loopnet, Craigslist, Crexi, and Commercial Café.

e. What are the Ongoing Expenses for Running a Tour Guide Business?

Truth be told until you invest in a workspace, ongoing expenses will be minimal. Note that payroll will take up a massive portion of your budget and will vary depending upon the number of guides you employ. If you intend to transport guests, then consider vehicle maintenance and fuel costs too.

f. What is the Average Salary of your Staff?
  • General Manager: $58,000
  • Administration and Human Resource Officer: $50,161
  • Sales & Advertising Manager: $52,541
  • Company Accountant: $46,720
  • Travel & Tour Advisor: $38,904
  • Front desk officer: $23,490
g. How Do You Get Funding to Start a Tour Guide Business?
  • Raising money from friends and family
  • Bootstrapping by tapping into your own savings
  • Sourcing investment from outside investors
  • Obtaining a bank loan
  • Getting money from a hard money lender
  1. Write a Business Plan

a. Executive Summary

Our plan at Local Experts is to make available individual and group travel to leisure clients. Our services will initially include pre-organized tours, custom packages according to clients’ specifications, travel consultation, and with time grow to include making reservations for lodging amongst other related services. We intend to focus on foreign tourists seeking leisure travel and excursions whilst on vacation in Arizona.

b. Products and Service
  • We provide travel & tour advisory and counseling packages
  • Selling travel-related insurance policies.
  • Selling travel guides
  • Arranging transit visas
  • Booking for the cruise trips
  • Booking air tickets
  • Providing taxi rental services
  • Hotel bookings
c. Mission Statement

Our mission at Local Experts is to start and grow a proficient and reliable tour agency that helps individuals, commercial industries, and nonprofit industries plan and manage tours. We will strive to position our tour business to be among the leading brands in a decade.

Vision Statement

Our vision at Local Experts is to always seek fair and responsible profit, substantial enough to keep the company financially healthy, and to fairly remunerate employees for their work and effort.

d. Goals and Objectives
  • Steadily provide top-quality excursions/trips on time and budget.
  • Cultivate relationships with enthusiastically satisfied customers
  • Create a market presence that guarantees short and long-term profitability, growth, and success.
  • Support growth and development in the tourism and overall economy of the United States of America
  • Contribute positively to our communities and our environment.
e. Organizational Structure
  • General Manager
  • Administration and Human Resource Officer
  • Travel & Tour Advisor
  • Sale & Advertising Manager
  • Company Accountant
  • Front Desk Officials

Marketing Plan

a. SWOT Analysis
Strengths
  • Very solid reputation in our marketplace
  • Well placed in community civic organizations
  • Good press contacts
  • Adequate financial resources
  • Good location
  • Destination specialist designations
Weaknesses
  • Only four tour guides – two of whom are new to the industry
  • Irregular company newsletter publication
  • Little or no understanding of social media
  • Low year-on-year growth patterns
Opportunities
  • Growing demand for travel after a year of Covid-19
  • Concerns over terrorism create domestic travel demand
  • A series of articles in a local paper on sightseeing places in Sedona got a lot of attention
Threats
  • The pandemic of recent years has affected demand for abroad travels
  • Political chaos is causing market uncertainty
  • A competitor in town recently affiliated with a large industry franchise with lots of marketing dollars
b. How Do Tour Guide Businesses Make Money?

Tour guide businesses are known to make money from each tour given. Guests are most often charged at a group rate or per individual and the price of each tour will vary based on the length of each tour.

c. Payment Options
  • Payment via bank transfer
  • Payment with cash
  • Payment via credit cards
  • Payment via online bank transfer
  • Payment via mobile money transfer
d. Sales & Advertising Strategies
  • Encourage customers to post positive reviews
  • Keep customers engaged with video-embedded emails
  • Create an Appealing Tour Package.
  • Make Your Marketing Clear as Ice.
  • Personalize Your Messaging.
  • Optimize Your Website and Accept Online Bookings.
  • Make Your Site Mobile-Friendly.
  • Get on YouTube
  • Partner with other local businesses
  • Selling your experiences on niche or local OTAs
  • Work with your local DMO
  • Get on directories
  • Join your local tour guide guild

Financial Projection

a. How Much Should You Charge for your Service?

Unless you intend to offer services and experiences that are unique, have it in mind that pricing is a very vital component of your business success. Ensure to keep your pricing competitive with others in your area. Nonetheless, expect half-day tours to cost $125, while full-day tours average $200, plus the cost of admission to any attractions that you will tour.

b. How Much Profit Do Tour Guide Business Owners Make a Year?

This will vary depending on different factors. However, in your first year or two, you could work from home and sell your services to five two-person each week, totaling $1,500 in revenue. Note that this would entail $78,000 in annual revenue and about $62,000 in profit, assuming an 80% margin.

c. What Factors Determine the Amount of Profit to Be Made?
  • Size of business and services offered
  • Number of clients
  • Season
  • Business management style
  • Marketing and advertising plans
  • Branding and credibility
d. What is the Profit Margin of a Tour Guide Business Product/Service?

According to industry reports, the profit margin for a home-based tour guide business is usually about 80%. With an office and staff, your margins will drop to about 30%.

e. What is the Sales Forecast?
  • First Fiscal Year: $430,000
  • Second Fiscal Year: $1,290,000
  • Third Fiscal Year: $1,870,000
  1. Set Up your Office

a. How Do You Choose a Perfect Location for Tour Guide Business

While foot traffic will more or less not be a primary motivator in selecting a business location, you must go for a location that accommodates your space needs as well as reflects your desired brand image.

b. What State and City are Best to Open a Tour Guide Business?
  • New York City, New York
  • Charleston, South Carolina
  • Santa Fe, New Mexico
  • Savannah, Georgia
  • Fort Worth, Texas
  • Williamsburg, Virginia
  • Bend, Oregon
  • San Antonio, Texas
c. What Equipment is Needed to Operate?

First and foremost, it is very necessary to invest in wireless systems to ensure that everyone on the tour can hear you. You should also look into getting your uniform or note how you will dress to ensure that your clients can find you if they get lost. Also don’t forget necessary things like headlamps for night tours, protective gear for dangerous, thrill-seeking destinations, and anything else specific to your niche.

  1. Hire Employees

If you are looking to grow a viable business, you will soon discover that you can’t do everything yourself. To draw in the right people, you should be able to sell your vision, and this requires an ardent belief in what you do. Always seek to hire tour managers who share your values and are committed to giving your potential clients a wonderful experience.

  1. Launch the Business Proper

While your business may not be fully operational yet, there’s no reason why you should turn down bookings. Ideally, you should start getting pre-sales and booking your tours in advance. As you prepare for a successful business launch, consider a pre-launch buzz campaign or hosting a few friends and family first.

See it as your dress rehearsal. Ensure to go through the tour from start to finish and collect as much feedback as you can. Once you feel confident that you’ve worked out the kinks, you’re ready to launch.

a. What Makes a Tour Guide Business Successful?

To succeed in this business, you must keep yourself organized with appointment schedules. Ensure you are never late and don’t forget that your clients also have their own tight schedules. You should also design enticing and unique trips to draw in tourists.

Consider taking advice and suggestion from every individual and consider being flexible. Always strive to make every trip fun and exciting for your clients. Also, consider setting up proper bookkeeping and choose good accounting software to guarantee smooth accounting for your business.

b. What Happens During a Typical Day at a Tour Guide Business?

Coupled with the necessary administrative tasks required to efficiently run this business, your day-to-day tasks will include:

  • Answering emails and phone calls from current and potential customers
  • Scheduling tours
  • Brainstorming and planning new tour ideas
  • Maintaining a presence within the community
  • Building on your marketing strategy
  • Fostering relationships with those in the community whose interests you share
  • Routinely maintaining vehicles if you transport customers
  • Interacting with customers, taking them on scheduled tours, and answering questions
 c. What Skills and Experience Do You Need to Build a Tour Guide Business?

Although you will learn a lot on the job, you must have the following basic skills, and a desire to improve and learn:

  • Be a good communicator
  • You have to be a bit of a performer
  • You should love knowledge and learning
  • Have a customer service mindset
  • Always be organized and on time
  • Be a problem-solver
  • Be flexible
  • Have energy
  • Be a go-getter
  • Be a leader!