The Winners and Rockers Hotel Entering the Hospitality and Tourism Industry - Example

Winners and Rockers Hotel Business Feasibility Report Executive Summary This feasibility test preposition has been established to present the plan for developing the Winners and Rockers Hotel plan to prospective investors and to raise capital needed to see its expansion. The feasibility test preposition also analyses the proposed ventures’ capacity to be a success. Winners & Rockers hotel is a private firm aimed at providing guests with an unforgettable experience with its wide range of products and top notch services. The hotel will offer lodging services, food and drinks and entertainment to its clients. The Winners and Rockers Hotel will enter the hospitality and tourism industry with a unique approach, separating it from its competitors. The hotel will focus on customer satisfaction to ensure that it acquires a predominant share of the market. This proposal is designed to provide step-by-step strategies for attaining sales, profits and development of this venture. Table of Contents Introduction We intent to offer first class hotel experience with the aim of becoming a leader in the hospitality and tourism industry as well as popularise Winners and Rockers hotel with the aim of making profits. This will be achieved by ensuring 100% customer satisfaction. We will treat every guest splendidly as if they are our only customer, thereby securing the customer favour as noted by Nash and Nash (2000, p. 34) and Reidenbach and Goeke (2006, p. 38). By focusing on hiring qualified and motivated employees, we will be sure of giving our customers a delightful experience that will keep them coming back. Our unique, innovative and contemporary fine dining will ensure a distinction from our competitors. Our Mission Our mission is to be an inspiring hotel combining an electric atmosphere with exciting and interesting food. This enterprise will vary the needs of its customers as it tries to cultivate a long term relationship with them. We will ensure that customer satisfaction remains our paramount objective. We aim to make the hotel a choice for anyone looking for ambiance, entertainment, comfort and variety. The hotel business proposal is rooted on industry facts and not mere speculations or optimism as a plan based on facts is a recipe for success (Timmons, Spinelli & Zacharakis, 2004, p. 45). Our products i.e. foods, drinks and lodging services prices are based on vast industry and practical experience of our management as they have been in similar positions in other ventures. A collective look on all figures has been taken to fix solid business estimates in our prices. The business concept for the hotel is derived from a detailed market analysis and not from a preconceived concept. This means that our hotel concept is built on unmet consumers wants. In place is a strong mitigation plan as we have evaluated traditional and non traditional risks associated with hotel failure and accounted for them. Hotel’s Summary The hall mark to our unique style of doing activities will be characterised by an open display kitchen where guests can enjoy seeing their meals prepared especially during the night. The hotel will feature a twofold system where we will have a cosmopolitan bar that will offer customers drinks in comfort. We shall also be having a full service dining where our customers can enjoy their meals as they socialise. This model presents the guests with variety by offering multiple dining and entertainment options within the premises. The establishment will be in a 1000 square feet area and will be capable of accommodating 200 patrons. Consideration to provide zoning, parking and accessibility issues will be reviewed as a key criterion. The main office will be at the entrance of the hotel and a reception desk at the next building adjacent to the main office. This building will host 200 rooms and will also have a swimming pool at the middle of the building. A kitchen will be positioned at the far end of the field. Between the kitchen and the building with rooms, there will be an open sitting area where guests can mingle as they enjoy their meals. The design may be modified accordingly depending on later needs. This is based on the point that hotel development is a high risk and high reward enterprise (O'Fallon & Rutherford, 2010, p. 14). Objectives Focus will be emphasised on: 1. Achieving a large market and penetrate it. In place is a qualified marketing team that will be concerned with advertising and popularising this establishment. Our location will also serve as an advantage for us as most of our customers are close to the hotel’s location. 2. Educating the customer on services offered within our premises. Through this, we hope to achieve customer loyalty and favour. 3. Creating a serene environment for development of the facility. A serene environment will create an atmosphere that is only found in our hotel, thus guests will be coming back Winners and Rockers hotel has a clear understanding of what is required for it to be a success. By prioritising the above three objectives, the firm will undoubtedly attain success. Ownership Winners and Rockers Hotel is a private business entity and majority of ownership is by me as its founder. There are 4 other co-owners who are the investors. The above mentioned are the internal shareholders. The firm has external shareholders too. They are 3 in total. These shareholders are the sole financiers of the business. Management & Staff Management will be headed by a CEO. Under the CEO will be a team of 4 departmental managers. The four will be heads of the various departments and will assist the CEO in running the hotel. The four qualify as they have adequate credentials for their respective positions. Management of the enterprise will be separated from its owners to avoid conflict of interest among the owners and also ensure professionalism. Employees of the company will be evaluated according to their qualifications and merit. The selected employees will be trained on their specific fields ranging from cooking, customer handling, cleaning and lodge rooms maintenance and so on. Employees will be allocated in the different departments. There will be a security team of 10 trained guards who will be tasked with ensuring the guests are comfortable and secure within our premises. All our employees will be permanently employed to ensure their cooperation. The employees work will be constantly evaluated from time to time and non-performing individuals will have to be relieved off their positions, evaluation will be done through scrutinising performance of individuals as this way, it is easier to distinguish non-performing workers. Employee remuneration will range depending on position with all of them earning at least $5000 which is the minimal pay for a subordinate employee. We will focus on ensuring qualified employees are rewarded for their hard work as this will motivate them according to Williams (2006, p. 432) and Morris, Kuratiko and Covin (2010). Framework of activities The flow of activities within the hotel will be simple to enhance efficiency. A framework of activities is shown below. The hotel will be run on a daily basis including weekends. We will be interchanging the staff with some doing the day and others working during the night. This shows the need for a committed employee team. According to Anderson and Kerr (2001, p. 235) and Urquhart-Brown (2008, p. 8), there is need to work for long hours during the start of a business as this provides an opportunity to be available to the customer. Daytime employees will resume work from 8 am to 6 pm and the night time employees will relieve the daytime employees from 6 pm till 8 am the following morning. Swot Analysis Strengths There will be tools to improve human resource activities such as interview guide and manuals. The firm has dedicated employees with a team of qualified managers. We are able to respond fast to customers as our firm is not huge thus allowing immediate feedback to our customers. Our location provides us with an excellent chance to perform and cater for our clients. There is high availability of trained workers looking for employment within the hospitality industry. Deep management experience gives us a chance to excel in the market. Weaknesses As of now, the firm does not have market presence or reputation. We lack diversity in goods that we offer as all the hotels specialise in food and drinks. Opportunities There is raw talent in the market comprising of innovative and hardworking jobseekers. Our market is expanding thus more future opportunities for success. Threats There is a possibility that many of our customers will take time to familiarise with our different menus. There is probability that our employees will not remain loyal to us, thus denying us a chance to carry out an employee retention programme. Location We will be stationed in the central Australian region. Location determines the trading area from which a business gets its customers and should thus be assessed meticulously (Pride & Ferrell, 2006, p. 465). With this fact, we intend to maximise the potential of the market full of youths looking for fun and a social place to interact. Winners and Rockers Hotel will be targeting mainly the youth aged between 10 years and 35 years. This age bracket is the most active and probably, the most likely to keep the venture rolling. The proposed venture is therefore aiming at providing the youth with a venue for socialising. Convenience is essential to the hotel’s development and we aim to achieve this through being located close to our customers. The company’s total coverage area is 1000 square feet, on 74 Todd Street, close to Alice Springs. Electricity is easily accessible and runs to about $50 a month. Gas is available and estimated to be $1000 annually. Transportation within the location is also favourable to us as. By maintaining an appealing image, we are assured of a steady progression between businesses close to us and those that are far. Targeted Market Analysis Identifying the suitable market is critical to implementing a viable marketing strategy, and failure to do this can lead to poor sales, high operating costs as well as enormous financial losses (Pride & Ferrell, 2008, p. 176). Our sales and marketing team have performed an extensive research activity and findings have backed this plan’s viability. Our target market is large and will include the following: Youths There are several academic institutions i.e. colleges and universities within Central Australia Examples include Charles Darwin University and Centralian Senior Secondary College among others that will provide a good market for us. Most of the students are looking for a social place to relax and this hotel will be an excellent choice for them. Families Households are also major potential customer for our services especially on holidays. We are assured that a major proportion of our profits will be from the households within the state as most of them are high end families. Our extensive six-month research involved questionnaires. Residents were asked what they think of a hotel within their reach and responses were positive. Major organisations Many organisations are likely to be customer bases for our hotel. Most of these organisations organise team building activities and our hotel will provide them with a venue to carry out their activities. Moreover, most of the employees are seeking a place to relax and relieve themselves after work and our spice of life meals will attract them, hence more revenue capability for the hotel. The list above does not comprise the full potential market for our hotel. We are anticipating tourists who will be a major boost for the hotel as they account for at least 45 percent of the projected profits. Price The asking price for our foods will be based on many factors. Key among them is profit (Stone, 2001, p. 77). We will set our prices to ensure a high profit margin for the company. However, we will ensure that consumers get value for their money as this will strengthen our relationship with them. We shall also have the following policies to increase our sales. 5 percent discount on our loyal clientele. Delivery of foods and drinks to households will be free of charge to all customers within a radius of 5 km from our premises. Lodge rooms booked for more than 5 days will attract a 5 percent discount. Such offers attract customers by helping them to manage their resources and time by reducing their cost of thinking (Tybout & Calder, 2010, p. 178). Operations The hotel operations are unique as we are in pursuit of being a different entity from the rest. Uniqueness is a major component for any business (Shimasaki, 2009, p. 176) and therefore we aim to be unique in our operations. The hotel’s operations will be concerned with risk management. With such an entity there come lots of challenges. In place is a legal counsel that will be solely responsible with legal matters concerning the hotel. Being a private limited company, it is a separate legal entity. Therefore, the council will be dealing in its legal matters. The hotel is insured by AON. Seasonal variations in demand have been adequately assessed with the holidays being our busiest and most profitable times. This time will see an increase in non-permanent employees as this way; we will be able to cater for the rising demand. During our low economic periods, we will be forced to relieve the contracted employees to cut on expenses associated with labour costs. Our suppliers are flexible and capable of reducing and increasing the quantity of supplies that we may need at any particular time. Our supplies will come from well established suppliers as we aim to avoid doing business with unqualified persons/businesses. Most orders will be done in the morning before 5 am to ensure that all requirements are ready before the start of a day’s activities. Safety of the stock i.e. food and drinks will be done by ensuring that the store is constantly locked and the chief cateress will be answerable for any losses in the kitchen. Any new assets to the hotel will be accounted for as inventory records will be updated constantly to avoid thefts. The company’ cash system is to be fully automated. Credit cards will be accepted as the technology will be high quality. The cash system is to be run by a software platform for processing credit and debit cards Growth and development of the complex is based on the demography, low operating costs, wide range of services to be offered. Low operation costs will ensure that targeted profit goals are achieved. Financial analysis This plan aims at estimating the start up costs and costs of running the firm. It is also aimed at identifying the revenue streams and forecasting cash flows and profitability. The venture will be fully funded through capital contributions by the shareholders. The initial start up cost is estimated to be $1000000. Another $400000 will be acquired as loan from the Barclays Bank. Research has already been carried for an extensive period and conclusions have been made that this amount is sufficient. All the premises will be built and nothing will be rented. The remaining amount will serve as our working capital. The following is a breakdown of the start up costs/expenses. Start up expenses Amount Legal reservation/ paper work $5000 Consulting fees $10000 Modern kitchen uniforms $3700 Modern staff serving uniforms $4000 Liquor expenses $100000 Advertising of hotel $30000 Opening celebration/ party $10000 Computers, computer software $45000 Electric appliances $30000 Lodging requirements $30000 Food and beverages stocking $50000 Contingency/ milestones/ other $20000 Expense account for food, fuel and beverages $2300 Fire & alarm installation/ security measures $6700 Start up for labour costs (first 2 months) $100000 Kitchen supplies $40000 Emergency expenses $200000 Total expenses $687700 Start up assets Amount Buildings $200000 Land $250000 Machinery $100000 Vehicles for transportation $200000 Outside landscaping and buildings $50000 Total assets $800000 Revenue and profit projections On commencement of business, the management is to maintain a net gross profit margin of 40 percent. Monthly net profits are expected to reach $50000 during the first year with an increase thereafter. The period of June 2013 will see the start of activities with a first year sales goal of reaching $475,000 and double that in the second year. This will result to an annual growth rate of 15 percent by the third year. The company will commence with no liabilities in its name. Dividends are to be paid to shareholders according to their capital contribution on a semi-annual basis. Profits distributed to the shareholders are to be 20 percent of the net profit. The hotel will have a website to advertise its products and services online. Strategy and implementation Our strategy is entirely based on the findings of our research and development team and the sales and marketing team. These teams have performed a 2-month research and they have come up with results that make this venture an exciting and lucrative one. The research and development team has researched on the feasibility of this plan and results are positive. In place is a sales and marketing team tasked with promotion process. It is important to consider advertising and promotion in the initial plan of a business to attract new or additional customers (Rogoff & Bezos, 2007, p. 34). The hotel will undergo a series of promotions to popularise it. This team will be aimed at establishing a loyal client base. Our services will be different from those of other businesses. Exceptional service delivery should be a major priority as posited by Harvey (2006, p. 346). We will focus on interacting with our customers in quest of a unique business facility. Focus will also be emphasised on target markets. The team will market us in various ways including a proposed website, radio and television advertising, in store promotions and face to face marketing. A grand opening event will also be held as it will help popularise the new business. Thereafter, the sales and marketing team will carry out aggressive marketing campaigns and this will assist in creating awareness. Campaigns will begin in June all through to December 2013. This strategy assures the shareholders that our sales revenue target is attainable. Brochures will also add up to our marketing strategy with every visitor receiving a copy. Brochures will be containing particular items in our hotel and up-to-date prices. Our competitive edge remains our high profile location, dedicated workforce, ability to cope with emerging competition and our strong marketing team. Each revenue stream will be managed by departmental heads that will be responsible for day-to-day activities of their respective departments. Departmental heads will report to the CEO on a daily basis. Shareholders know that such a venture is a high risk one. In case of failure, shareholders’ capital may not be recovered and in case there is need to bring in more capital, it will be upon them to do so. Owner’s capital amounts to $1000000. The company will acquire a $400000 conventional loan payable in the next two years and the tax rate is currently fixed at zero awaiting further analysis. Our projected cash flows are considerably good. This shows that there is very little if any, chance of failure for the business. The ventures revenue will be tracked on a monthly basis to ensure that owners’ equity is safe. In case of failure the owners will be allowed to sell the company’s assets to recover their capital. Capital raised will also be used to settle liability in the event of business failure. References Anderson, K L & Kerr, C J 2001, Customer relationship management, McGraw-Hill, New York. Harvey, J. 2006, Managing service delivery processes: linking strategy to operations, ASQ Quality Press, Milwaukee. Morris, H M, Kuratiko, F D & Covin, G J 2010, Corporate Entrepreneurship & Innovation, Cengage Learning, New York. Nash, S & Nash, D 2000, Delighting your customers: Keep your customers coming back, time and time again, Oxford University Press, New York. O'Fallon, M J & Rutherford D G 2010, Hotel Management and Operations, 5th edn, John Wiley & Sons, Sydney. Pride, W M & Ferrell O C 2006, Marketing: Concepts and Strategies, 13th edn, Cengage Learning, New York. Pride, W M & Ferrell, O C 2008, Marketing, 15th edn, Cengage Learning, New York. Reidenbach, R E & Goeke, R W 2006, Competing for Customers and Winning with Value: Breakthrough Strategies for Market Dominance, ASQ Quality Press, Melbourne. Rogoff, E G & Bezos, J 2007, Bankable Business Plans, 2nd edn, Rowhouse Publishing, London. Shimasaki, C D 2009, The business of bioscience what goes into making a biotechnology product, Springer, New York. Stone, P 2001, Make marketing work for you: boost your profits with proven marketing techniques, Oxford University press, New York. Timmons, J A, Spinelli, S & Zacharakis, A 2004, How to raise capital: Techniques and strategies for financing and valuing your small business, McGraw-Hill, New York. Tybout, A M & Calder, B J, 2010, Kellogg on Marketing, 2nd edn, John Wiley & Sons, New York. Urquhart-Brown, S 2008, The Accidental Entrepreneur: 50 Things I Wish Someone Had Told Me About Starting a Business, AMACOM Div American Mgmt Assn, New York. Williams, C. 2006, Management. Mason press, Ohio. Read More