Building a company travel budget isn’t a simple task. There’s no foolproof formula because every organization is different, with its own needs and goals for growth.
If you’re not sure how to start budgeting for an upcoming business trip, you’re not alone.
Fortunately, there are a few things you can do to create a business travel budget that works for you and your company.
Here, we explain what you should keep in mind while budgeting for your next business trip.
1. Understand Your Budget Cap Before You Start Planning
You already know that your business travel budget isn’t limitless. But having a clear idea of what you can afford to spend is the first step to take before building your business travel budget.
If you work for a medium or large-sized organization, you can ask to meet with your manager and the accounting department to make sure you’re aware of what you can spend prior to booking. This task might be up to you if you’re a smaller business, but it’s a worthwhile effort to avoid overspending.
2. Weigh the Potential Profits Versus the Costs
Before making any decisions about booking first-class airfare or taking your employees and clients out to lavish dinners, consider how much potential profit the trip will yield.
If you’re confident you’ll score a major contract or already know the trip will boost revenue for the company, you can factor that into your travel budget. However, if you’re competing for bids in a new client relationship, it may be best to stay conservative with travel, dining, and accommodations.
3. Know How Many Employees Actually Need to Attend
One of the biggest budget mistakes you can make is to bring along employees who may not really need to attend. Sure, they might be essential to your department’s operations. But are they critical to this business trip?
Ask yourself if their contributions (like coordination, administrative support, or communications) can be performed virtually from the home office. Of course, if they need to be physically in the room for a presentation or are a vital member of your sales team, it’s worth the expense for them to attend the trip.
4. Book in Advance For Maximum Benefits
Booking in advance isn’t just a marketing ploy to get you to commit early in the planning stages. It can save your business money and free up funds for other expenses like entertaining clients or rewarding your employees with upgrades and activities.
Just be sure to opt for flexible reservations with the option to reschedule or cancel for free in case the details of your trip change closer to your departure date.
5. Work with a Business Travel Agency for the Best Deals
You might think that working with a booking agent or platform to coordinate your business accommodations might be more costly than doing it yourself, but it’s not.
According to the business travel experts at Hotel Engine, taking advantage of a booking service’s connections to score discounted rates can save you money (sometimes more than half off) and create more room in your budget for other expenses.
6. Save Money Where You Can (Within Reason)
Being mindful of your spending is smart. But there’s a fine line between being overly frugal and keeping your eye on the bottom line.
If you’re wondering how to create the right balance between frugality and worthwhile expenses, think about where spending money ensures the success of the trip and the well-being of your team (and when it doesn’t).
For example, an outing to get to know potential clients is something you can plan for that’s most likely also worth the expense. But there’s no need to choose between the most expensive steakhouse in town or a budget buffet: opt for a respectable option that won’t break the bank.
7. Determine Which Expenses the Company Should (and Shouldn’t) Cover
Sometimes, you’ll feel energized and excited by a business trip. And that can make it tempting to pull out the company credit card to cover impulse expenses like a round of celebratory cocktails or souvenirs for your team.
If you’re trying to stick to a budget, plan ahead for a few extra expenditures and avoid additional impulse purchases. But if it’s not directly relevant or necessary for the trip, avoid opting to cover the cost.
Unfortunately, there’s no way to budget perfectly for a business trip. You’ll always encounter unanticipated expenses, and you won’t get it right every time when it comes to planning ahead.
However, keeping these critical tips in mind while you build a company travel budget should set you on the right path and help guide intelligent spending.
Best of luck, and bon voyage!