Month: June 2017

Start-up costs for an accommodation business

Start-up costs for an accommodation business

After much soul-searching, you’ve decided that you want to open your own guest house, boutique hotel or B&B. There are many factors to consider, such as where your business will be and who your target market is, but much of these decisions will be based on your budget, so that may be a good place to start.

Here are just some of the costs associated with setting up a new accommodation business:

  • The cost of building or buying a new premises
  • The size of the entire property and its location (rural or urban) will influence the building costs. For example, the cost of transporting equipment, furniture, etc. will be higher if one is further away from an urban area
  • The level of refurbishment, renovation or upgrades needed; including landscaping the garden and building/maintaining the pool
  • Room: Beds, TV, linen, furniture, towels, curtains, bathroom mats, lamps, coffee sets, décor
  • Dining Room: tables, chairs, table-cloths, cutlery, crockery and glassware, décor.
  • Kitchen: Appliances (perhaps industrial sized) like fridges, stoves and coffee machines, cooking utensils, bains maries, hot-plates, etc.
  • Public areas: Furniture, mirrors, décor and other fixtures
  • Consumable stock for the kitchens and bedrooms
  • Office: Computers, printers, copiers, booking systems, furniture, office supplies (guest register, purchase orders, letterheads, etc.), switchboard
  • Licenses and levies: there are various documents you will have to apply for, such as a zoning certificate, trading license and perhaps a liquor license. These cost money, so it must be included in the budget
  • Marketing: A professional website, ads, business cards and brochures will be needed
  • Other modern conveniences, such as Internet access/wifi, DSTV, air-conditioning
  • Hiring employees is a significant start-up and on-going cost. In the beginning, employees will have to be trained and provided with uniforms

The extent of these costs will depend on the type of establishment and its target market – perhaps the star grading you hope to get – as this will dictate the quality or luxury of the materials that need to be purchased.

Financing your start-up

Any financial institution you approach to finance your business will expect you to have an own cash contribution and an asset you can use as security. This means that you will need a smaller loan, which will help when it comes to having enough monthly cash flow to service the debt. In order to cover any finance repayments and to keep your business viable, you should not have more than 50% of the value of your business being debt.

Create Your Marketing Plan

Create Your Marketing Plan

Your marketing plan should be a clear, concise, and well thought out document that guides you through your marketing program. Using a marketing plan template will help you focus on the objective of your marketing and how you intend to accomplish that objective. Whether your company provides products or services, your marketing plan is essential to your success.

The six major elements to creating a successful marketing plan are listed below. Creating a marketing plan template from these points can help you stay on track. You may only need only a sentence or two per section… or you might want to break each down into a few succinct bullet points.

  1. The Purpose
  2. Your Target Customer
  3. The Benefits of Your Product or Service
  4. Your Positioning
  5. Your Marketing Tactics
  6. Your Marketing Budget

As you go through each section, keep the following tips and hints in mind:

Keep your marketing plan simple.

Many small business owners get so involved in details that they lose sight of their goals. By keeping your plan simple, you will create a clear roadmap that focuses on what you need to accomplish.

Write your marketing plan down (as opposed to thinking about it and keeping it in your head).

It is important to have a document that will remind you what you are trying to accomplish. A marketing plan template is an excellent place to start.

Be direct and be clear.

If you’re not sure, ask a friend, relative, colleague or employee to read your plan. They should immediately grasp your goals.

Don’t build in too much flexibility.

You may be tempted to plan for various market contingencies. If your market changes that quickly, then you should incorporate that into your plan. But create a strategy you can keep to – that’s the purpose of having a plan in the first place.

Review your marketing plan often – quarterly or even monthly.

That doesn’t mean you have to revise it every month. But take some time to evaluate it and make sure you’re on track.

Finally….never stop marketing!

Once you have your plan in place, you need to take action. Commit yourself to your marketing program. Don’t let yourself stagnate. Keep at it, and you’ll be giving your business the opportunity to flourish.