The travel and tourism industry is one of the fastest-growing industries that is becoming increasingly attractive to emerging entrepreneurs. The industry has a wide range of opportunities for dedicated and passionate persons (Vasudevan, 2017). Among the subsectors in the industry include accommodation, transportation, restaurant, and entertainment; an entrepreneur can choose any of these fields when starting their business (Vasudevan, 2017). However, despite the abundance of opportunities in the sector, it also requires skills since customers are on the lookout for a rich experience that can only be provided with creativity.
Skills and Characteristics Required in the Tourism Industry
One skill that an entrepreneur in the industry needs is creative thinking; as mentioned, customers are looking for a unique experience that is different from their mundane lives. Therefore, an entrepreneur will need to channel their creative thinking skills to create the most fulfilling experience for their customers. The industry also requires information-seeking skills. It is a highly dynamic industry ridden with obsolescence pitfalls. Entrepreneurs must be curious to update their products and find new marketing methods (Vasudevan, 2017). Systematic planning is another vital skill that the travel industry demands. There are so many components in the industry that a little laxity can lead to massive losses or a bad experience for the customers. An entrepreneur must be able and willing to navigate these challenges.
Goal-setting is another critical skill that an entrepreneur in the travel and tourism industry must have. One must be able to set goals for the entire business and for the various teams, whether it is in terms of financial management or quality (Vasudevan, 2017). It is also essential for the tourism businessperson to strive for influence. It is a business that requires persuasion and is subtle in requirements. Soft skills are essential to convince customers about the attractiveness of the services offered. Management skills are also necessary in the industry since there are many staff involved; for instance, a hotel will need valets, chefs, managers, engineers, accountants, salespeople, and waitresses; the list is all over the place, illustrating the importance of management skills.
Self-Appraisal of Entrepreneurial Skills
The above section has dealt with the most critical skills and characteristics for an entrepreneur in the tourism and travel industry. In line with this, I will rate myself on these skills to see if I possess what it takes to survive in the industry. The skills will be out of an arbitrary scale of 0 to 10, where 0 means non-existent and ten is for a perfect score.
|Creative Thinking||8||I participated in a recent expo in college and was part of a team with highly capable teammates|
|Systematic Planning||9||I have worked part-time when in college in the past semester and still managed to get good grades all through efficient planning|
|Information Seeking||7||I had planned to start an Airbnb before the pandemic hit; all this comes from my curiosity about current trends|
|Goal Setting||8||I set a goal for my GPA last semester and was able to achieve it|
|Problem Solving||9||I helped my father decide on a business dilemma he was having, and it was a success.|
|Influence||5||I do not possess a lot of influence yet, but it is something I am working on|
|Interpersonal Skills||7||I communicate and relate well with my fellow students and professors. I ask questions during forums, and I am not shy|
|Managerial Skills||8||In high school, I was the chairperson of business club|
The Process of Developing an Enterprise in the Tourism Sector
The travel and tourism industry is diverse, with hundreds of ideas one could implement. The opportunities range from transportation enterprise, travel agency, tour operator, destination management, tour guide, hospitality, and accommodation. Therefore, the first step in establishing a business in this sector is deciding what to invest in (Vasudevan, 2017). After selecting the subsector to venture in, the next step is choosing the geographical location. Tourism opportunities are not uniformly distributed geographically, and some businesses would only thrive in certain areas. For instance, if an area has many game reserves and parks, it would be good to establish guided game tours, bed and breakfasts, transportation services, or even conservancies.
The next step is to estimate the competition since some sectors may already be too saturated and hostile for start-ups. However, fierce competition should not be a disqualifying factor; it only means that one needs the right strategy to overcome the challenge. The next step is to write a business plan. The business plan is the blueprint that will guide the founding of the enterprise and should include such details as the executive summary, which stipulates the name, purpose location, workforce needs, tourism management personnel, market sector, marketing plans, competition, and financial projections (Vasudevan, 2017). The next item of the plan is a business summary with details about the distribution of ownership and requirements such as assets, funding, and location. The plan must also include the products and services that the intended business will provide for customers. The next item on the plan is to conduct an analysis of the market.
The next step in the process is to procure funds for the business. One can present their idea to financiers and investors to obtain the necessary capital. After procuring funding, one must then select a location in order to operate their business from. After choosing a site, it is now time to obtain the requisite licenses for the business chosen. The final step is to market the company in line with the goals set.
Factors Contributing to Development of a and Implementation of a Successful Business Plan
The first factor that determines a good business plan is if it meets a business need. This is because all plans are not generic, and each is designed to achieve a different business purpose. A plan that could be good at selling the company to outsiders could be deficient in supporting and managing the company. The second factor is the realism aspect and ease of implementation. It is always essential to develop a plan that does not require millions of dollars for investment which could be a hurdle to raise, making it ineffective.
The third factor that makes a good business plan is its specificity and how easy it is to track the results against the plan. Every business plan should include objectives, tasks, deadlines, and future expectations that are measurable. Another factor that determines a good business plan is clarity on how it defines the responsibilities for implementation (Vasudevan, 2017). Every task in the plan should be assigned to a specific person to ensure it is implemented. Clear identification of assumptions is another factor for a good business plan. Assumptions could be the expected future goals that sometimes do not materialize and have to be identified in the next planning process.
The sixth factor that would make a good business plan is communication with the people who will run it. At this point, the management of the plan is the key. The people in charge of the plan implementation should be communicated to and should clearly understand the plan. Another factor to a good business plan is getting people committed. It is at this point that the business plan is put into action, and everyone has to commit to their roles in order to see the plan effective. The final factor is the follow-up and planning process; this ensures that the plan is kept alive by providing regular corrections and reviews. This is because a good business plan should be flexible and dynamic.
Bed and Breakfasts Online Market Place
Main Concepts of Developing a Startup Business Plan
Bed and Breakfast(B&B) typically provides two types of services to customers: overnight accommodation and a breakfast meal the following morning. The industry has been revolutionized by the emergence of online marketplaces where owners of premises can list their services and be connected to potential customers. An example of these online marketplaces is Airbnb; it provides services for homestays for holiday rentals and tourism services (Adamiak, 2019). The services can be accessed through their website or a mobile app. Through these apps, rental owners can register their premises and be connected to customers. Airbnb does not own any of the premises listed on their platforms; instead, they make profits from a commission on each reservation (Adamiak, 2019). The Airbnb business is a fierce competitor of the hotel business and has come under intense criticism for the correlation between the rise of the business and rent increase in neighborhoods (Adamiak, 2019). This section will provide a business plan to be a competitor for Airbnb
Sources of Funds for Travel and Tourism Businesses
There are many sources of funding in the travel and tourism industry. The type of business to be established will affect the amount of capital needed. Some ideas such as Airbnb accommodations do not require a huge capital footprint and can be financed using personal finances. Another source of funds for businesses in the industry is love money such as inheritance or from spouses. For promising start-ups with plans for public listing in the future, one can also use venture capital funding who will typically invest in the project to sell later when the business has taken off. Another source of financing is angels, who are wealthy individuals who invest in promising ideas, much like VC but individuals (Bellavitis et al., 2017). Business incubators are also sources of funds for start-ups; incubators provide fledgling businesses with premises and other facilities until they can stand on their own (Bellavitis et al., 2017). Other sources of funding include government subsidies and grants, and bank loans.
Choice of Funding and Justification
Firefly City B&B Limited is an online platform for businesses to register their accommodations so that they can be connected with customers. The business has been founded by astute and capable individuals with the know-how to run world-class disruptive software solution companies. The company will have headquarters in Lagos, Nigeria. Nigeria is a relatively virgin market for a solution like this. Moreover, Nigeria has a massive population and a growing local tourism scene buoyed by a rising middle class and a vibrant expat community. Nigerians are also hungry for homegrown solutions (Ogbonna et al., 2020). For this reason, Firefly City has the potential to become a multibillion-dollar company.
It is being projected that the COVID-19 pandemic may change the world forever; it has already changed the world with all the restrictions to travel. There is a possibility that people will resort to local destinations for tourism, especially in light of the dangers of globe-rotting that the pandemic has exposed. The best solution for such a company with such massive potential is venture capital funding; no VC would turn down a company with such potential.
The Business Plan
Firefly City B&B Limited is an online platform for arranging lodging, primarily homestays and tourism experiences. The company will not be owning any of the premises listed and will not host events but will be acting as a broker by getting commissions from bookings. Firefly’s headquarters will be based in Lagos, Nigeria, in a new facility in the Central Business District. The company has already secured Venture Capital funding from an American firm; the VC firm will own 49% of the company while the rest will be distributed among the founders. Firefly will ensure that the accommodations listed on the platform meet the highest quality with elegance. Three of the founders are computer science graduates from MIT and have extensive knowledge in software development. The author of this paper is a tourism graduate and one of the founders and is involved in branding and advertising.
The company’s services and amenities are a bed and breakfast marketplace located in Lagos, Nigeria. The company has the vision to become a force in the industry and to re-imagine the concept with Africa in mind. The company will aim a listing the most exquisite premises. The services include listing of bed and breakfast accommodation premises on the website and mobile application. The net service will be to inform tourist premises about the website and finally help guests to book the services. The company’s vision and statement is to “aim to be the best bed and breakfast marketplace for all kind of travelers in Africa.” Firefly’s mission statement is “to deliver reliable and quality services superior to our competitors and to ensure an 85% accuracy for all our listings across the calendar year”.
A business’s success is highly dependent on the structure of the organization and the people involved in various roles. Firefly will ensure that all employees explore their potential, inculcate a sense of belonging, and the freedom to integrate their philosophy into the business. The organization will work hard to ensure the recruitment of people with the best skills and mindset to steer the firm into the right path to achieve its goals and objectives. The chief executive officer (CEO) will be the senior-most employee of the company. Their role will be to lead the company in operations, strategy, financing, human resource, company culture, hiring, firing, sales, PR, and sales. The company will also have departmental heads such as operation specialists, software engineering, human resource manager, digital marketers, accountants, and heads of accounting.
Business Plan SWOT Analysis
The Firefly founding team is well aware that the BnB industry is highly competitive and have done a SWOT analysis for the business. The strength of the company is that the partners are people with vast experience in their respective fields. Three of the founders are computer science graduates from MIT and have worked for at least four years as software developers in leading corporations, specifically Google Africa, Microsoft, and Facebook. The organization also intends to employ extensive AI programs to ensure only the best products are featured on the site. The company’s weakness stems from the fact that it’s a start-up entering a highly competitive industry with tech titans such as Airbnb.
Opportunities that lie ahead for the company are that even though Airbnb has existed since 2008, they are only now making inroads into Africa, which means that the market is relatively virgin; none of the competitors have an unassailable head start. The company is therefore poised to employ a cultural advantage in a bid to stave off stiff competition. One of the biggest threats to the business is that at the moment, the government is yet to tax these accommodations; with increasing demand and the growth potential, the government will impose taxes making it more expensive. With increased prices, the industry will lose its competitive edge over hotels. The other threat, specifically to Firefly, is, of course, the competition to industry titans such as Airbnb.
This paper has looked at the entrepreneurial opportunities that exist in the travel and tourism industry. It has been established that the sector is diverse and is teeming with ideas from tour operators to hotel establishments. Many skills are required to survive in the industry since it’s a creative industry. The paper has also looked at various factors affecting the establishment of tourism businesses, such as funding. Finally, the report delved into a real business plan that incorporated software solutions.
Adamiak, C. (2019). Current state and development of Airbnb accommodation offer in 167 countries. Current Issues in Tourism, 1–19. Web.
Bellavitis, C., Filatotchev, I., Kamuriwo, D. S., & Vanacker, T. (2017). Entrepreneurial finance: New frontiers of research and practice: Editorial for the special issue Embracing entrepreneurial funding innovations. Venture Capital, 19(1–2), 1–16. Web.
Ogbonna, O. E., Mobosi, I. A., & Ugwuoke, O. W. (2020). Economic growth in an oil-dominant economy of Nigeria: The role of financial system development. Cogent Economics & Finance, 8(1), 1810390. Web.
Vasudevan, V. (2017). An introduction to the business of tourism. SAGE Publications India.