 While a fear of flying keeps Martin Jones's feet firmly on the ground, the industry he has dedicated himself to is not for the fainthearted. Where natural and man-made disasters can stop the phones ringing overnight and the competition includes your own clients, being successful in the travel business means being able to navigate around the challenges. It is all this down-to-earth businessman from Durham has known; the fact that he's survived to tell the tale probably means he could make a success of anything. After graduating in business IT at the University of Central Lancashire, Martin started working for his parents' company, Lincoln Travel, at weekends and during his gap year. He'd moved from helping out with administration to being fairly heavily involved in the business by the time his parents came to sell it 12 months later. Initial plans for him to retain equity in the business with the new owners didn't come off, so he took the decision to set up Freedom Direct on his own at the age of 24. "I was then in direct competition with the new owners but on an extremely small scale," he says. "I had three staff, they had 150, but nevertheless they made life difficult, telling companies not to do business with me. "In the end they were replaced by a new management team, but it was still hard for me in the early stages. I didn't get any help other than being able to borrow some money from the bank on the back of a personal guarantee because they knew me. Freedom has been a cash-generating business from the start, so I've never had to borrow any more." He did, however, have to learn how to sell holidays himself without the luxury of the 120-plus sales team he has now. The key to the business's success was acting as booking agents for all the big tour operators including Thomson, Airtours and First Choice by advertising holidays on Teletext, with customer enquiries handled by telephone. "The first few years were so exciting, we were opening offices, taking on staff, making plenty of money, the sun was shining," he says. In the first year, Freedom recorded turnover of £5m which continued to double each year for the next four years. By then the company was heavily overstaffed and, at the same time, Martin took his eye off the ball. "After five years I suppose I got a bit bored and lost focus. It coincided with our costs and my optimism being too high and my not taking a reality check," he admits. From 2001-2003 the business failed to make the profit it should have done on the level of turnover. Then came September 11. "I was out at lunch when I heard," says Martin. "By the time I got back to the office, the phones had just stopped. But even then I don't think I realised what it all meant." Always the optimist, he failed to take action again to put the company in a position where it could withstand the enormity of the event. "I should have cut the size of the business by a third within a month of September 11 but I assumed the downturn would be short-lived, I kept thinking things would get better. It was only when I went to New York six months later that it sunk in how massive it was." The fickleness of the travelling public, which is impossible to predict, goes some way to explaining his lack of action at the time. September 11, in which 3,000 people died, halved Freedom's business overnight; the earthquake which destroyed Bam in Iran at the end of 2003 killed an estimated 30,000 people and barely registered on the travel industry radar. About 200,000 died in the South Asia tsunami but it's estimated to have affected only the worldwide holiday market by 25pc year on year. Anticipation of the war in Iraq caused a few jitters but within a fortnight of the first bombing of Baghdad, things were back to normal. "We're in a fragile business but the public are quite resilient and get over most things quite quickly," says Martin. "Very few people cancelled holidays because of the tsunami, for example, and instead just rebooked for the Caribbean." Freedom Direct has also been relatively resilient when it comes to shaking off potential disasters but the impact of September 11 proved a salutary lesson for Martin. "I'm pleased we were able to sustain it because a lot of companies have gone out of business during the last few years," he says. He did reduce his costs and managed to increase turnover to £36m with 20pc fewer staff. Martin is confident that it can hit £40m by the end of next year. Freedom now employs around 123 people, including 30 homeworkers nationwide, and is taking on 40 extra staff on a seasonal basis who, during the summer peak period for late deals, can bring in as much as £2m to the business. "Last year was our most profitable to date and we've restructured internally since then which will help to make 2005 a great year. We need to reduce some of internal costs some more but we're on target for £40m turnover." Creating a leaner business is vital if Freedom is to continuing being able to compete, launch new projects and adapt to the ever-changing travel industry. Whilst the company is an agent selling holidays for the big tour operators, these companies also have their own sales people - and they dictate who sells what and at what price. In other words, Freedom's clients can undercut the company that is selling on their behalf. It's less about partnership than it is about competition. Martin prefers to leave it at "the lines are getting blurred". The answer is for Freedom Direct to become a tour operator itself and to diversify. Last year Freedom launched Resort Excursions, a web-based business designed to help travellers "beat the welcome meeting" by providing information on trips and the chance to book and pay a competitive price for them before they leave home. More than 1,500 agents are already signed up to use the service, including lastminute.com The company also has its own web-based businesses for skiing holidays at www.snowdeals.co.uk and package deals at www.holidaysyoulike.com Web-based customers have soared by nearly 30pc in the last 12 months to 110,000 a year, while repeat customers have grown by 10pc. Whilst Freedom is well known in the industry, it has been anonymous from the customer's point of view. The web has changed that. "It has been a fickle market but customers are starting to value service as well as price now," says Martin. "We're working a lot harder on developing customer loyalty and can see how that's paying off." The business will continue to expand by increasing the number of homeworkers. Martin's own personal project is to build Freedom Direct its own headquarters on Tyneside, while his outside interests keep him in touch with life inside and outside the travel industry. Being director of Advantage, an organisation working for the interests of its 800 travel agent members, gives him an insight into the sector as a whole. He's a governor of Newcastle College and of a primary school in Peterlee, and regularly meets other entrepreneurs and business leaders through his membership of the Entrepreneurs Forum. "You can't stand still in this business," he says. "There is so much change going on in this industry that to survive you have to be ready to move fast." * For more information on the Entrepreneurs Forum, telephone (0870) 8502233 or visit www.entrepreneursforum.net | 
