September 30 2009 by Chris McGinnis
If you think you're doing your company a favor by taking fewer business trips, you might want to think again. Evidence is emerging that you could actually be doing it harm.
U.S. companies could miss out on nearly $200 billion in profits this year because they have cut back on business travel too much, according to a recent study by IHS Global Insight.
Another study by Oxford Economics found that companies bring in about $12.50 in revenue and $3.80 in profit for every $1 spent on business travel. The research firm said that if a business cut out all travel, it would forfeit 17 percent of its profits in the first year, and those profits would likely not return for three years after business travel resumes.
I've always had the feeling that traveling and meeting face to face was crucial to my business, but this is the first time I've ever had that feeling quantified.
Here's an example of how this study applies to my own business travel...see if you can apply it to yours.
I took a business trip to San Diego earlier this summer. My roundtrip airfare was roughly $150, while the hotel ran about $350. Cabs and meals totaled around $200, making the total cost of the trip around $700.
As a result of the new contacts I made and existing relationships I strengthened during this trip, I should expect nearly $9,000 in additional revenue this year and an additional $2,700 in profit.
While I did not return from that trip with signed contracts, I did come back with plenty of new opportunities to grow my business. Ask me this time next year and I'll tell you what came out of that trip.
If I didn't go to San Diego, I would have saved the $700, but imagine how much I would have missed out on.