Over 700.000 hotels are currently working around the globe. They contribute over $3.4 trillion to the global economy. If you want to be a part of this moving force, you need the perfect plan for success. Even though it might seem that you are to begin as a small fish in a big ocean, it is still a reasonable industry to invest in.
First of all, hotels and restaurants have local, regional, and then national impact; which means that you are to serve the people in your local community first and then the rest of the national population and even further – guests from other countries. It all depends on the nature of services you are to offer and how much the people in the immediate surroundings will need them.
Secondly, the location in which your business is supposed to thrive is of essential importance. Is it tourism, business, or some other kind of environment?
Thirdly, do you have a lot of competition who are currently giving the same or similar services as you intend to do, and how much will you differentiate from the rest?
It all comes down to perfect planning. A business project to start a motion of development, all of its segments must be carefully analyzed, planned, and written out. To help you with the process, this text will lay out the framework of such a plan for project development.
Write a Business Plan
The first step of every start of a business endeavor is writing an extensive business plan where all the segments of the business will be included and described. Usually, for this step people hire experts who offer hospitality business consulting services because they have the experience and the knowledge to set the basis and build the pillars of the future business. On the other hand, if you have experience or knowledge about the matters, it shouldn’t be a problem to compile the document yourself. All it takes is persistence, patience, and a great deal of observation.
The business plan is composed of the following parts: an executive summary, business description, market strategies, distribution, marketing plan, competitors, operations, and management. Let’s go over each element and the necessary info you need to provide about it.
Even though it is the first element of the business plan, it should be a summary of everything you want to include in it. But, most importantly, you need to write concisely what is it that you want the reader to know. Here, you should clearly state what is your goal of starting the business. There are 5 key segments you should focus on in the executive summary.
- The first one is the business concept where you will describe the business and the services you will be offering as well as the niche of the market it will be serving.
- The second segment is the financial features where you will highlight the most important financial points like sale, profits, cash flows, and ROI.
- The third segment is the financial requirements where you will explicitly say how much money and capital you need to start the business to grow. Here, you should also explain how this money will be used.
- The fourth segment is the current business position that will reveal relevant information about the legal form of the company – date of formation, principal owners, and key personnel.
- And, the fifth segment is the major achievements that will talk about any company developments that directly impact business success.
In this part, you describe the business to the detail You should start with a short description of the niche of the hospitality business, and in the process of describing you turn to all possible future outcomes. The data you use for writing your plan should be reliable and a result of extensive market research. Concentrate on the structure of your business, meaning, on the type of operation – a hotel, a restaurant, or something else and clearly state whether the business is pretty new or already established. Talk about the legal form as well – whether the business is a sole proprietorship, partnership, or corporation and who are the principal managers and owners. Finally, here, you should also include the elements that make you stand out from the crowd and why your business will offer better solutions to the community than the other competitors.
In this part, you are to define the market you are entering with extensive analysis. This analysis will help position the business with the goal of achieving a lot of sales. Also, with the market analysis, the pricing, distribution, and promotional strategies will be planned in order to make the company profitable.
In this case, the distribution refers to how the service you are offering is being distributed to the clients. As the hospitality business requires face to face interaction for service distribution, the network of operational activities should be carefully planned. Strategic advantage can be achieved if you put a unique flavor to how you will give the services as not only will you able to gain competitive advantage but also you will be adding layers to your brand for which people will recognize you.
The process continues with determining the promotional plan. The strategy should be explained briefly including the advertising strategies, public relations, and sales promotions. Finally, the pricing procedures, returns, and adjustment rules, as well as the methods for sales representations, should be considered. Moreover, the lead generation, customer service policies, and compensation would be included as well.
The first thing to do in this analysis is to identify potential competition. You can do this by looking at the market as you were a customer and categorize all the competitors by the benefits they provide for their customers. The other way is to make a categorization of the competitive strategies of competitive businesses and define their motivation. Once you have this information you will be able to see who your real competitors are.
Operations and Management
Last, but not least, the operation and management is a segment that will define how the internal network of personnel will function in order to achieve the business’ goals. Here, you will need to appoint roles to every key member of the management team and set individual goals.