Sep 12, 2013
How To Write An Impressive Hotel Business Plan That Attract Investors
Image By kevin dooley
So, you have finally decided to take a business leap and start your own hotel. Whether you’re envisaging business travel hotels, comfortable hotels, classy heritage hotels or an elegant boutique, you need to spend a good amount of time researching before making an investment. The key step to initiate this process is to write a convincing hotel business plan that has a proper layout and ingenious strategy. A business plan should also have an entire analysis of the financials as well as long-term productivity. We have created a guideline including vital points for your hotel business plan.
It’s a must to create a synopsis outlining the company description. You should include the following things.
- Business Aim/Purpose: Mention the main aim behind establishing your business.
- Business Details/Formation: Include the business details and formation in brief.
- Hotel Location: This is very important to mention. The hotel location is the first thing you need to brief your investors and audience.
- Directors: Your directors will decide the future plans and will supervise the management.
- Team Members and HR: The entire team and the HR professionals also need to be mentioned.
- Strategic Position and Alliance: Strategic Positioning is the overall approach to any particular condition, and Strategic Alliance is a relationship between two parties to follow the set rules and regulations in order to meet the company goals. A brief overview of both of these should be included in the synopsis.
- Company Vision: The vision of the company’s future is a very important requirement for the synopsis.
- Funding: You cannot move a single step ahead if you don’t have the required funding. Funding is crucial and should be mentioned in detail under the synopsis so that investors can get an overview of the company.
Before creating a business plan for your hotel, you need to carry out historic research that depicts the broad view of the hotel.
The below things fall under historic research
- The Market Position: Success depends on how well the market position analysis is researched. It should be done thoroughly.
- Historic Income Statement: Historic income statements are necessary to get the hotel license and the permit.
- Historic Balance Sheets: Historic balance sheets are important for analyzing the growth and development of the company and can be helpful when the company is audited.
Under this section you need to add information on the present industry trends and the present state of the market.
- Present Company Trends: This is really necessary to be successful. If you want to grow, you need to understand the market and its trends. You need to be updated about everything that’s in the news and on the front page.
- Present State of the Market: Market research is critical to making a business plan. If you create this, investors will show interest in your business. They will be 100% sure that you are aware of market fluctuation, and their money won’t be at risk.
Who are your customers and why should they choose your hotel? You need to answer this question under the customer analysis.
- Detail Customer Analysis: The detailed customer analysis should include the target market information, socio-economic, behavioral segmentation, geographic and psychographic details.
- Type of Customers: You also need to analyze the type of customers you will receive at your hotel and how you will meet their needs and desires. This should be analyzed based on the location, amenities and the services provided by the hotel.
A local study of the hotels around you is important to decide the success ratio of your hotel planning and location. Under the competitive analysis comes the SWOT analysis.
- SWOT Analysis: The SWOT analysis is a planning method which involves evaluating Strength, Weakness, Opportunity and Threats, which are involved in any business enterprise. This analysis is very helpful in understanding the internal and external factors that favor and disfavor the objective plan.
- PEST Analysis: Pest analysis implies to Political, Economic, Social and Technological analysis. These macro-environmental factors are needed in the scanning component for management. This was further expanded to PESTEL or PESTLE by adding legal and environmental factors. The PEST analysis is a tool for understanding the growth or decline of the market, potential, position of the business and the direction for operations.
This is the most important part before starting any business plan write up. The plan mainly consists of three parts:
- Promotion: Promotion should be considered before planning any business. How will you attract your customers, and what methods will be used? What message are you going to pass to your various customers, and how will you portray them? Are you planning for any kind of directing marketing work? Are you planning to use guest reviews for viral marketing of your hotel? Are you planning for your hotel websites, SEO, SEM or SMM tactics? Are there any future plans for offline promotion?
- Division and Supply: Are you planning for a third party distribution channel? If yes, how will you manage to do it, and what kind of technology are you planning to use for the supply and distribution?
- Revenue Management: This is the main point in the marketing and the promotion field. Figure out the price and techniques you are going to use. You also need to make policies for the payment and cancellation requests.
Under this point, you need to mention the entire organization of your hotel. How will you manage to run the hotel business? By what manner will you manage the inventory and log it? The below points fall under organizational planning.
- Management and Staff: While writing a hotel business plan, you need to mention the number of staff and the supervisors you will need and you have. Mention their experience and background and their job responsibilities.
- Administrative Management: Setting up administrative management is an important part of the job process. You need to set your service standards, develop a manual and get details about the supplier.
The hotel business is run by the entire management team. Each and every member is responsible for the growth and the development of the business. Thus you need to include the bios of the management team.
Financials should be focused on carefully while writing the hotel business plan because they are the core of the business. You need to mention the start up cost of the hotel, i.e. the capital investment required for the hotel planning. Below are the points that fall under the financials.
- Assumption: First, the owner need to assume the amount required to start the business, the operation expenses and the future projection.
- Budget and Funding: If you are planning to raise the money for your business, you need to figure out the amount of funding required to initiate the project and bring it to completion.
- Capital and Return on the Investment: You also need to figure out the ways you will generate a return on your investments for the investors. You need to decide the amount of time it will take to pay back your lenders.
A hotel business plan is not a small job, and you need to consider many factors while writing the plan. Below are some key factors you need to mention – these are the most important ones.
- Permits and Licenses: Before planning your business, think of getting the permits and licenses required by your location. Whom will you approach, how will you proceed and what are your plans for getting it done quickly?
- Hotel Construction: You need to get an estimate on the hotel construction and the structure. The tentative date of starting the construction, the amount required, the construction engineer required, top qualified professionals needed for the job, etc. should be figured out.
- Training The Staff: You also need to train the staff for their job performance. This can be done by collaborating with a hospitality management institute or any major hotel unit.
- Plan Presentation: After the completion of your plan, you need to find ways to project and present your plan. This is of utmost importance to successful completion.
You may have great ideas but a good write up is very essential for implementing your ideas. Hope this hotel pre-opening checklist will help you in writing a persuasive hotel business plan.
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