Executive summary | Bed and breakfast business plan
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EXECUTIVE SUMMARY (continued)
The target market will be composed of local and international tourists as well as small to medium sized corporate clients. The business has an established clientele with Government departments/ municipalities and will therefore continue serving this market. These segments were assessed as lucrative market segments in terms of profitability, growth, growth potential and size. Other factors such as competition and risk factors were also assessed.
Extravagant Luxury Bed and Breakfast will face competition from well established Bed and Breakfasts, Lodges and Hotels. The main competitors are Villa ABXX Exclusive Bed and Breakfast, Rio ABCXX Luxury Bed and Breakfast, The DXXX Relax Bed and Breakfast, Kwa BXX Luxury Relax Bed and Breakfast, Big Relax TXX Bed and Breakfast and a number of Guest houses. However, all the above mentioned competitors do not offer Conference facilities – this will work in favor of Extravagant Luxury Bed and Breakfast. Indirect competition will emanate from various luxury hotels, restaurants, and fast food outlets within Krugersdorp and immediate surrounding areas.
Extravagant Luxury Bed and Breakfast will segment the market and employ a customer centric marketing strategy that will focus on large group clients emanating from both local and international markets. The business will upon expansion make use of various vehicles of marketing i.e. advertising, promotion, and branding. The internet will also play a significant role in attracting international tourists. Local tourists will also be attracted by means of a business website. Ensuring customer satisfaction by upholding hallmarks such as customer intimacy will be imperative to the success of the Bed & Breakfast. The Bed & Breakfast will also establish strategic alliances with local and international travel agents.
The clients shall essentially consist of large groups that wish to host corporate functions, government meetings, general meetings and other conventions. The management will also organize indoor activities for the locals; this will create a continuous flow of income that will eventually offset the seasonality of International Clients.
In order to successfully compete in the market, Extravagant Luxury Bed and Breakfast will need state-of-the-art buildings, equipment, furniture, fixtures and fittings, as well as other requirements. The financial requirements for the expansion of Extravagant Luxury Bed and Breakfast will circa R10.5 million. A detained financial plan is included under item 9.This business plan intends to assist the entrepreneurs to seek funds from external funding providers that offer Commercial Property Finance.
The critical risks will emanate from the market where increased competition is anticipated. Other risks shall also encompass the fluctuation in income, as well as the possibility of event risks – instances pertaining to product or service liability. In general, risk relevant to the business at present is operational in nature has mostly to do with risks associated with health and safety. The business will strive to mitigate these risks so as to ensure smooth business operations.