One of the most popular sectors of the global industry is the hospitality sector. It is a prospective and progressive industry branch and it is no wonder that every year thousands of startups launch with the hope to survive the challenges and establish themselves on the market. However, not all succeed. In fact, a great deal of the new hospitality businesses fail irreversibly. To avoid such a failure, your approach should not only be innovative but also it must attend to the fundamental rules. Whether it is a restaurant that you are starting or a new hotel, motel or hostel, there are several key factors that must be considered. Let’s go over them.
Setting the Basics
The first step is deciding the type of structure your hospitality business will be. For example, regardless of you planning it to be a limited company, a partnership or other business setup, you must follow the specific rules and regulations. The different business setups have their own pros and cons, so listing all of them and discussing them with a professional who offers hospitality business consulting services is a recommended reasonable action. Once you decide the setup, you move to step two.
Writing a Business Plan
The business plan is both the next and the final step in the process of establishing a hospitality business. It is the accumulative document that holds in-depth analyses and predictions as well as financial plans about the launch of the business and its development in the first few years. Inside you need to write about the business’ mission, vision, target audience and organisation as well as the budget and funding of the business.
If your goal is to attract investors with the business plan, you should write it specifically for them, explaining the organisation and the functional structure of the business. Sometimes, a one page business plan will suffice if everything is on point. However, a long version of the business plan is always recommended to have apart from the short one, because it is not only a document but a guide for working.
Sorting out the investment is vital, especially at the beginning. You must be aware how big your budget is and how much money you will need for further development. For that purpose, you need to explore all the options of funding including your personal savings, loans from institutions like banks and third-party investors. While you are in the clear about your personal savings, and the loans from the banks (as they come with strictly regulated conditions), third-party funding might be the trickiest one of the options because every investor has different terms of collaboration. In order to ensure that you will collaborate well with an investor, both of you must establish a smooth relationship based on clear conditions and rules. And of course, all of this must be written down and notarized.
Conceptualize the Brand
Building a brand does not happen overnight. It takes time, energy, persistence and money. However, in order to build a brand, you need to have a concept for it in the first place. You mustn’t use slogans, logos, names, or other branding ideas from other businesses. If you do so, you would be breaching their branding rights and you will probably end up being penalised or sued. The same way, once you have your concept, be fast and register it so that you can protect your business from others stealing your ideas. You need to be original, creative and offer something unique to the market because, as mentioned before, the hospitality business is very competitive as it is.
Location, Property and Licenses
The next step is finding the best location for your hospitality business and getting it ready. This is actually the easy part. The hard part is acquiring all of the licenses, making sure that you don’t skip any including the liquor or music licenses. Then, make sure you plan some time to negotiate possible leases or rental arrangements with the location owners. You should carefully do this part because no misunderstanding should arise once you launch the business. Any problems that come from the misunderstanding between you and the location owner might prove to be fatal to the business in future.
Marketing Strategies
In order to grow successfully, your hospitality business needs to be advertised properly. For that reason, you must have a plan for marketing activities that will put you in front of your ideal clients. Social media and Google maps with reviews are one of the best ways to promote your business and you should dive deeper into how it all works. If you can’t do it by yourself, hire an expert who knows digital marketing as the back of their hand.
Contracts and Partners
Once your business starts functioning, you would have to find partners to work with in terms of supplying the goods necessary for your business’ streamlined work. You would have to sign contracts with those suppliers at the beginning of the collaboration so that you can avoid potential problems later on.
Once your business starts functioning, you would have to find partners to work with in terms of supplying the goods necessary for your business’ streamlined work. You would have to sign contracts with those suppliers at the beginning of the collaboration so that you can avoid potential problems later on.
Finally, you don’t stop here. You plan how your business will grow even before it is launched. Yes, a lot, if not the whole energy will be directed at the launch of the business, however, including a long-term plan consisting of future positioning and development is something that you must add to your business plan. Again, it is a wise idea to consult an expert offering hospitality business consulting services to make sure you are moving in the right direction. They will help you plan your strategy minimising the chances of failure and it can be an incredibly rewarding achievement if you overcome all the challenges you had foreseen.
