When you search for “how to start a business” in Google, one of the first things it will tell you to do is make a plan.
Every business needs a written plan. In many instances, this isn’t necessarily the place to start when you’re looking to launch a business. But there is no question you’re going to need it sooner rather than later, particularly if you’re after investment money.
So, what does a hotel business plan look like? What items should be included? What is it for?
Here is a basic reference guide to writing your own hotel business plan.
Why does your business exist? What do you value? What is your mission?
The company description should clarify your mission, the goals you’re looking to achieve, how your hotel is different from other hotels, and a SWOT analysis. It should also contain a breakdown of shareholder involvement.
A SWOT analysis, in case you don’t know, is a framework for determining your Strengths, Weaknesses, Opportunities, and Threats as a business.
Your Unique Selling Proposition Or Concept
This is where you need to further define what makes your hotel unique. Explain what you offer in terms of rooms and services, how your guests will experience your hotel, and why they will want to stay at your property.
It’s also worth exploring what your competitors are up to, and whether you can protect unique features of your hotel by claiming intellectual property.
Industry & Market Analysis
This is a critical part of any business plan. First, you’ll want to analyze trends and changes in your industry. What could affect it in the short or long term? You’ll also want to consider the impact of technology, environment, social, and political influences and how these factors will affect your ability to remain in business. Tax advantages or benefits should also be considered.
With market analysis, you’ll want to look at: Location, competition, and demand to determine whether you can run a viable business in your locality.
The word “competition” has already appeared multiple times in this reference guide. By now, you should know how important it is to understand your competitors.
Determine who your competitors are and understand their strengths and weaknesses.
Who is your ideal customer? Who are you looking to attract to your hotel? Create a profile for your target customer. Are you primarily looking to attract business, leisure, or mixed guests? What do you know about your ideal guest in terms of demographic, psychographic, and socio-economic data? Again, why will they choose your hotel over others? Are there any other opportunities outside of your primary target customer.
You can’t attract guests to your hotel without effective marketing. In this section of your business plan, you’ll want to lay out your marketing, sales and distribution, and yield and revenue management strategies.
Other Items To Include
A thorough business plan should also include sections on:
- Operations. Explain how your hotel will be operating day to day.
- Management. Profile your management team. This is especially important if you’re presenting to investors.
- Financials. This is where you can define key metrics. If you’re presenting to investors, this is also where you would explain how much money you need.
- Project planning. Define targets you’re looking to hit.
- Appendix. Charts, graphs, and other reference material can be included here.
The executive summary should contain an overview of everything you’ve covered in other sections of your business plan. But you’ll want to keep it succinct – it should not be more than one page.
The above is but a starting point. It’s worth researching business plan examples to get a better sense of what to include in each section and how to find the data you need to ensure the soundness of your plan.