Airbnb Business Plan

How to Write Up an Airbnb Business Plan: Free PDF Template

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Having a well-crafted Airbnb business plan is the best way to set your business up for success from the get-go. It outlines your business goals, operations plan, and the timeline for accomplishing all of this.

After all, you don’t want to be flying blind when it comes to the vacation rental industry.

Try not to get too overwhelmed: it’s easier to write a business plan than you might think. In this article, we explain why having a business plan for Airbnb hosting is important, offer best practices for writing an effective one, and provide a free Airbnb business plan template to download.

Don’t see the form to download our Airbnb Business Plan? Click here .

First, what is an Airbnb business plan?

An Airbnb business plan is a living document that outlines the direction you want your business to go in and strategies for getting it there. It will include details such as your target market and customers, financial plan, and goals and milestones.

You’ll be referring to your business plan often as you work to open your Airbnb , so be sure to be as detailed as possible.

Airbnb business proposal vs. business plan

We sometimes see people get confused between Airbnb proposals and business plans.

To be clear, a business proposal is a document that explains how a company’s product or service can meet a specific customer’s needs. Its goal is to attract customers.

You might need an Airbnb business proposal if you were, say, trying to get investors for your Airbnb business. However, chances are that what you’re really looking for is a business plan.

Why do you need a business plan for Airbnb hosting?

A well-thought-out business plan for Airbnb is the roadmap you’ll use to steer your business into the future. Here are just a few reasons why you should consider writing a business plan for your short-term rental property.

Helps you meet your goals

It’s easy to get sidetracked while trying to grow your business.

Of course, entertaining new ideas is never a bad thing. But having your original vision in writing

will ensure you don’t deviate too far from what you truly want to achieve. It motivates you to move forward and gives you something to measure progress against, too.

Airbnb Business Plan Goals

Prompts you to make important decisions

You’re going to have to reflect on your operations strategy, competition, future guests, and more when you sit down to write your business plan.

You may find some of the difficult decisions you’ve been putting off coming up in this process. Now is the time to face them head-on.

Don’t sweat this too much. Remember that you can always come back to your business plan and adjust as you go. It’s an ever-evolving document!

Gives you the framework to communicate your business to others

We all like to think we can handle things on our own. However, the time will come when you’ll need help to run your business, be it from a business partner, investor, or assistant.

When that time comes, you need to be able to clearly and confidently communicate what you’re doing and where your business is headed. It wouldn’t make any sense to order an Uber and not tell the driver where to go, right?

Not to mention that an Airbnb business plan saves you the headache of having to explain every nuance of the business to the person you’re bringing on board. Forward the document and let it speak for itself.

How to write a business plan for Airbnb: best practices

Now you know why having a business plan for Airbnb hosting is so important. But how do you go about writing one?

Grab a cup of coffee and pull up a chair. Let’s go over some best practices.

Brainstorm a mission statement

Contrary to popular belief, mission statements are not reserved for major corporations. Before you even start writing the business plan itself, consider writing an Airbnb mission statement for your business.

Airbnb Business Plan Ideas

A mission statement is simply a concise explanation of the business.

Think about how you would explain what you’re doing to a friend at a cocktail party without losing their attention. What vision do you have for the business? Why is this important to you? What value do you provide to your customers?

Take some time to reflect, but keep in mind that mission statements are meant to be quick and to the point.

Airbnb mission statement examples

Here are some examples of Airbnb mission statements for inspiration:

  • “The Cozy Cottage provides budget-friendly accommodations to travelers seeking to enjoy the natural beauty of our neighboring national park.”
  • “The Little Apple is an eco-conscious studio that gives guests unparalleled access to downtown Manhattan at competitive rates.”
  • “The Malibu Oasis offers the ultimate in luxury with a beachfront property, high-end amenities, and services tailored to our guests’ specific needs.”

Recognize your audience

Who will be reading your business plan?

The language you would use with one audience may not be appropriate for another. You might even consider writing different versions of your business plan for different audiences.

For example, a version geared toward investors might use more formal terminology. A version created for a future business partner, on the other hand, might be more casual.

Tap into the power of self-reflection

Starting an Airbnb business is a huge undertaking! Making sure you are ready to take it on is just as important as having a sound business plan.

Take inventory of what skills you already bring to the table and what things you will have to learn along the way. Are there things you should outsource to lighten your load? Do you feel prepared to take the next step with your Airbnb business?

Acknowledge any uncertainties now before you get started. It’s a great way to be honest with yourself and boost your confidence!

Be realistic

Should you push yourself to think big? Absolutely!

Should you set unrealistic and unattainable business goals? Not so much.

It’s all about striking a balance between dreaming big and keeping your feet on the ground. Take into account anything that might go wrong so you aren’t blindsided later on.

What to include in your Airbnb business plan

When it comes to writing a business plan, Airbnb is just like any other business. That’s to say, there are certain things you absolutely must include!

Take a look at our list and stay tuned for our free downloadable business plan template for Airbnb.

Executive summary

An Airbnb executive summary consists of a short description of your Airbnb business. People should be able to read your executive summary and know, at a glance, what your business entails.

Airbnb Business Plan Template

To begin, ask yourself the famous five Ws to ensure you cover all the key information:

  • Who is my Airbnb for (groups of friends, families, couples, etc.)?
  • What is it (family holiday home, beachside condo, bachelor pad, etc.)?
  • When is it best to stay at my Airbnb (summer, winter, weekends, etc.)?
  • Where is my Airbnb located?
  • Why should guests book my property?

Once you have these answers, you can rewrite them into a suitable executive summary.

Operations plan

Your operations plan outlines how you are going to run your Airbnb on a day-to-day basis.

This is one of the most straightforward parts of your business plan. Chances are, you’ve already thought through most of the details.

Here are just a few helpful prompts in case you get stuck:

  • Am I going to hire any staff or run the business myself?
  • How will I manage inventory ?
  • Who is going to clean the rentals between guests?
  • Do I need to hire an accountant to manage my finances?
  • Who will deal with bookings and customer complaints ?

Business goals

You broadly detailed where your business is going with your executive summary. Now, you need to further solidify your vision in your goals section.

Are you satisfied with a couple of bookings a month? Or are you expecting a full reservation calendar by the end of the year? You’ll need to set goals to help pin this down.

It might sound elementary, but setting S.M.A.R.T. goals will help your business make progress. Is your business goal specific, measurable, attainable, relevant, and timely ?

Setting good goals is the basis for any successful Airbnb business plan.

Unique selling points

As with any business, you’ll need to detail the unique selling points (USPs) your Airbnb will bring to the existing market. That is, why are customers going to choose your Airbnb over the competition?

Airbnb Unique Selling Points

Thankfully, finding your USPs is much easier than you might think. Simply analyze your business and consider how your Airbnb provides a better guest experience than other properties in your area. Ask questions such as:

  • Is it better than others because of its location?
  • Is the price of your accommodation better?
  • Are the interiors of your property different or better than the rest?

After all, once you are confident in your strengths, your guests will be, too!

Target customers

Your guests are how you are ultimately going to make your money. So, it’s incredibly important to understand and target them properly.

This starts with creating buyer personas to outline the types of guests you want to attract. As profiles of your ideal customers, buyer personas should be as detailed as possible to help your business grow down the road.

When considering your ideal guests, ask yourself questions such as:

  • What’s their name?
  • What do they do for work?
  • How old are they?
  • Do they have a family?

Understanding and visualizing your ideal guests enables you to prepare for their specific needs and pain points.

For example, if you’re tailoring to young digital nomads , you’ll want to offer fast and reliable Wi-Fi, a designated work area, and suggestions for laptop-friendly cafes in the area. If your ideal guests are families with young children, on the other hand, you’ll want to make sure your property is child-safe .

Competitor analysis

It’s not all about your own business. No business plan is complete without some competitor research as well.

Take a look at the market to find your direct competitors (these are the properties that might win bookings over you). Then, analyze them to see how you can put your own Airbnb on top .

For example, ask:

  • How much are my competitors charging per night?
  • What standard of accommodation do they offer?
  • Do they offer airport transfers/pickup services?
  • Do they offer a wide range of amenities in the house?

Marketing plan

Explain which marketing strategies you will use to target your key markets and achieve bookings. Think about both offline and online marketing , as well as any campaigns or promotions you plan to run externally.

This is when the buyer personas you created earlier will come in handy. If you know the people you’re trying to target, you’ll know what type of marketing will be suitable for them.

Airbnb Marketing Plan

Here are some questions that can help you sketch out your marketing plan:

  • What methods of online marketing should I use?
  • What methods of offline marketing should I use?
  • Do I have a direct booking website ?
  • Do I have business cards ?

Financial plan

How are you going to finance your Airbnb ? You’ve probably given this lots of thought by this point (or even stayed up at night stressing about it).

But now it’s time to get serious. Will you self-finance your Airbnb or take out a loan ? Is financing unnecessary because you’re simply renting out a spare bedroom?

These questions form your financial plan . As we all know, money doesn’t grow on trees—so you need to know where yours will be coming from. To that end, estimate your expenditures and projected income for the first five years.

So, what kind of information makes up a financial plan?

  • Will I need to take out a loan?
  • What will the interest rates be?
  • Do I have savings I’m ready to invest into it?
  • What level of monthly loan payments can I manage?

Milestones and goals

When you start any project—whether it’s going back to school, losing weight, or starting a business—tracking your progress is essential.

So, outline your plans and goals for your business, plus what key milestones will help you achieve these targets. You can refer back to this section later on to ensure you’re on the right track.

Here are some good milestones to use for your Airbnb business:

  • How much do I want to make each month?
  • How many guests do I want in the first quarter?
  • What rate of growth do I want in my bookings year-over-year?
  • How many returning clients do I want each year?

Mistakes to avoid when writing an Airbnb business plan

Like we mentioned above, your business plan is a living document. So, you don’t need to worry about making it perfect on the first try. And you will have to update it over time.

That being said, you’d do well to avoid these common mistakes the first time around.

Don’t be too vague

Avoid making big, vague claims that you can’t quantifiably measure. Claims like this will only make it harder to see where you’ve succeeded and where you can improve.

After all, the point of a business plan is to give your business a sense of direction. Your future self will thank you for being specific about your goals and plans.

Airbnb Business Plan Mistakes

Also, don’t be too specific

We know—we just told you the exact opposite. But hear us out.

If you get too specific in your plan, you don’t leave yourself very much wiggle room. Yes, you want to have a clear direction of where your business is going. But you don’t want to close yourself off to other possibilities.

Be firm about the destination (your business goals) but flexible about the journey (how you will achieve those goals). There’s a sweet spot in there somewhere.

Airbnb business plan example

Sometimes the easiest way to get started is to see examples of others’ work. We’re also providing an Airbnb business plan template you can follow below. But in case it helps, here’s a sample business plan for Airbnb, based on the fictional business of “the Cozy Cottage”:

  • Executive summary: The Cozy Cottage is a cottage located in the small town of Green Meadows. The Cozy Cottage is perfect for couples and small families looking to enjoy the natural beauty of the greater Green Meadows area.
  • Operations plan: I will be able to manage guest communications and turnover myself, as I am semi-retired and live on the property adjacent to the Cozy Cottage. I’ve contracted a local accountant to handle my finances.
  • Business goals: We intend to have every weekend booked by the end of the year, and a full reservation calendar within six months of opening.
  • Unique selling points: The Cozy Cottage’s location (equidistant between the historic downtown and the nearby national park) is especially attractive to visitors. The property also provides a fully stocked kitchen, making it ideal for longer stays.
  • Target customers: The Cozy Cottage has one bedroom with a queen bed, as well as a sofa bed in the living room. The space’s size and offerings make it perfect for small families or couples.
  • Competitor analysis: Green Meadows has only recently become a popular tourist destination, meaning that competition is still scarce. Most existing Airbnbs in the area have higher price points and cater to larger groups. We plan to differentiate ourselves by catering to smaller groups and offering similar amenities at lower prices.
  • Marketing plan: Our initial marketing plan consists of tapping into Airbnb’s customer base, posting on Facebook and Instagram , and distributing print materials in local businesses .
  • Financial plan: The property on which the Cozy Cottage sits is already paid off, as it was part of a family estate. The initial investment for furnishing , decorating, and stocking the Airbnb will come out of my personal savings. According to my projections, the Airbnb should be paying for itself within one year of opening.
  • Milestones and goals: We hope to be booked every weekend by the end of the year and self-sustaining within one year of opening.

Your own business plan will likely be longer, much more detailed, and backed by real data. However, this Airbnb business plan sample should give you an idea of what your own document might look like.

Download our free Airbnb business plan template

We’ve created a free Airbnb business plan PDF that you can download and customize to get started. This business plan template for Airbnb was designed with three specific pain points in mind:

  • Why do I need a business plan in the first place?
  • What do I need to do before I can start creating my business plan?
  • What should I include?

Fill in the form below to download our Airbnb business plan template free of charge!

Disclaimer: Lodgify is an Airbnb Preferred Software Partner. This post, including any claims or statements within, is solely from Lodgify and is not endorsed by, directly affiliated with, authorized, or sponsored by Airbnb in any way.

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How to Start a Homestay Business If you love hosting and have spare space in your house, monetise it by starting a bed and breakfast business

By Shipra Singh • Jan 6, 2020

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

In 2018, Shivam Chaudhary enlisted a spare bedroom in his Dehradun flat on AirBnb to make some extra money. Two years later, the entire three-BHK apartment is on the online marketplace platform with each room priced at INR 1,400 per night. "Initial income from one room listing was 5 times more than what I had anticipated. The potential business model prompted me to list the entire apartment," says Chaudhary.

Homestays, bed and breakfast (B&B) or guesthouses—the concept of B&B lodging is fast becoming a popular business model for homeowners who have extra space in their property to spare. As of February 2019, Airbnb alone has about 45,000 listings in India, as announced by the platform's co-founder and chief strategy officer, Nathan Blecharczyk during a summit.

The concept of homestays is quite simple. You rent out your unused property for short spans to guests travelling in your city. It is different than a hotel as you as a host share the house with your guest and do not have to provide round the clock room or restaurant service, as is the case with a hotel. It does not require heavy infrastructure either and, hence is easy on your pocket.

So, if you love hosting and want to start your own homestay business, here's a guide on how to go about it.

Also Read: 20 Business Ideas for Stay-at-Home Parents

List on Online Platforms

The easiest way to start is to list your house on platforms such as Airbnb, Booking.com , Trip Advisor and Homestays.com. Alternatively, you can also post ads directly on Facebook, Instagram and Google to save on the commission charged on such platforms.

As part of the signing up process, you need to upload identification and property-related documents. You don't have to pay anything for listing yourself on these portals but they charge a commission of 3-6 per cent for each booking.

There are no restrictions on how much space can be let out. From a single room to an entire floor to a villa, you can let out as much space as you want. Take the case of Goa-based couple Latika Singh and Rahul Singh, who are full-time hosts to a three-story homestay. The duo has let out two floors in their house, keeping the ground floor for their use.

Platforms such as Airbnb let you set your own rate. To begin with, check prices of listings in your area to get an idea about how much can you charge for your space.

Rates are not sacrosanct and can be changed by the owner depending on demand and season. Singhs lower price of their homestay during May-August, as that's the off season in Goa. Whereas during Christmas and New Year week, they mark-up their prices by 15-20 per cent because of higher demand due to the Sunburn festival.

Chaudhary, on the contrary, doesn't tinker much with his apartment's rates. "I get bookings all year round as Dehradun is both a travel destination and a business hub. Bookings drop barely 10-15 per cent during winters, so I don't usually reset price of my listings," says the 30-year-old businessman.

If you need the space for your personal use, you can block those dates on the platforms in advance.

Most importantly, before you enlist, figure out the permissions, registration process and other legal requirements of a homestay business in your city. The concept of Airbnb in India is fairly new and so there are no defined rules on whether a homestay qualifies as a commercial business or not. The rules vary across states so it is recommended that you visit the nearest district tourism office to understand the regulations.

Costs of Setting up

Setting up a homestay can cost you anywhere between INR 30,000-50,000. Here's a breakdown of all the costs involved:

One-time Costs

  • Furnishing: To begin with, you will have to set up the space with basic furniture such as bed, table, a pack table, a chair and linens like curtains, bed sheet, bed cover, etc. Furnishing can cost you INR 10,00015,000, depending on how much you want to decorate your space.
  • Basic amenities : Water kettle, towels, basic cutlery are basic amenities, which is another INR 3,0004,000.
  • Optional amenities: Additional facilities such as airconditioner, cooler, geyser, air-purifiers, etc., can further cost you upwards of INR 20,000.

Recurring Monthly Costs

  • Bills: Electricity and Internet bills will be INR 5,0006,000.
  • Cleaning: Laundry (bedsheets, towels) and cleaning is another INR 6,0007,000.
  • Grocery and Utilities : Groceries for breakfast and basic items to include in the room such as toiletries, tea and coffee pouches, milk pouches, salt and pepper, etc., will cost you INR 1,5002,000 per month.
  • Staff: You can hire an assistant for help with smaller tasks or managing the homestay. For instance, Chaudhary has hired a fulltime assistant who hosts guests as he himself doesn't stay in the apartment. He is paid INR 15,000.

Earning Potential

Income from homestay business will typically depend on how much space you have let out, amenities provided and location of your house. A single room with all basic amenities can be priced anywhere between INR 1,500-2,000.

Bigger spaces like a villa or an entire floor will obviously be priced higher, but gets fewer bookings compared to single rooms. "We have two listings—two rooms on second floor for INR 1,700 each and third floor apartment for INR 3,800. But, we get more bookings for single rooms," points out Latika. During full season, she gets an average 20 bookings every month for the bedrooms and 10 bookings for entire floor, earning the Singhs INR 40,000-80,000 a month.

If your property is close to tourist spots and gives easy access to public transport, you can price it higher. Also, added amenities such as air-conditioning, running hot water, air-purifier and a functional kitchen usually attract more tourists as opposed to a basic lodging option.

Delhi-based Anmol Bagga has installed air-purifiers in his homestay to tackle air pollution. "I have seen an increase in bookings from foreign tourists ever since I've installed air purifiers," says Bagga, who has listed a two-BHK on Airbnb for INR 3,200 per night.

To give you a ballpark figure, an average booking of 15 days per month of a single room can fetch you INR 18,000-20,000, after removing operational costs and commission of online platforms.

Your can have lean periods depending on the tourist season of your city. For instance, if you are in Rajasthan, you will get very few guests during summers. On the other hand, homestays in Shimla will get few travelers during winters.

For this reason, if your sole income depends on this business be prepared to plan your yearly finances accordingly.

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How To Start A Homestay Business? Homestay Business Model.

Table of Contents:

1. Homestay Business Plan

2. what is homestay in india, 3. how to start a homestay business, 4. homestay business ideas, 5. risks in homestay business plan, 6. is homestay business model profitable, faqs on how to start a homestay business.

Are you interested in earning a good income by starting a homestay business? Then you are at the right place! In this article, we will provide you with all the pros and cons of running a homestay business. While planning a holiday, the first thing you need to decide is accommodation. You need to choose between a hotel, hostel, or a homestay. Those who are travelling solo, prefer to stay in a hostel. Those who are travelling with their families, usually want to stay either in a hotel or a homestay.

A homestay is a form of hospitality where guests share the home with a resident of the city or village where they are travelling. Less crowd and a taste of rural life are making homestays the most preferred choice of tourists in India. Many homestays are located in beautiful locations, in places that are often outside the normal tourist’s radar. It can be in the mountains, or a village, or near forts or forests. A homestay offers several benefits than a normal hotel like a glimpse into the everyday life of the residents and a lower carbon footprint.

Many homestays are fully furnished with smart TVs, refrigerators, washing machines, etc. One disadvantage of home-stays is that many of them don’t offer Wi-Fi internet services. Another point is that there is a fixed time-table for foodservice and room cleaning. Himachal Pradesh is emerging as an attractive market for homestays.

According to sources in the Tourism Department, the number of homestays in the state till the end of 2019 was 2305. Other places that are seeing increasing interest from tourists are North Bengal and Kerala. It is an excellent low investment business that can also support local tourism.

homestay business plan pdf

You can start a homestay business with minimum investment and earn some passive rental income. The three main factors contributing to the success of this business are the layout, cleanliness, and hospitality. Here is a guide on how you can begin a homestay business:

You can partner with a friend to hire a cottage or a house in your chosen location. It need not be very large-even a spare bedroom in your flat can serve the purpose. From a minimum of one room to a maximum of six rooms without a restaurant, can be utilised for one homestay.

You can easily run this business from a home-office. All you will need is a laptop with an internet connection and a mobile. The Facebook Business page is another tool to help you in this.

licensed tag on white background

Getting a homestay license for your home or property should be one of your top priorities. You have to register with the tourism department by filling up and submitting an application form. You also have to take permission from the local panchayats and the police. Each state tourism board has its standards for basic amenities, room dimensions, safety protocols, etc. as a basis for granting licenses to home stays. Another important criterion for a license is that the owner of the homestay should himself live there with his family. If the property is rented, you have to inform the landlord about the sub-leasing and get his approval.

4. How To Promote Homestay?

Construct an active marketing plan. Know who your customers are and how and where to reach them. If you provide good service your customers will recommend your homestay to others, and you will get repeat business. You should post the feedback and reviews of your guests on your home page. Think about your competitive advantage.

Find what makes your homestay unique, or create exciting activities, and use this to attract guests. You can advertise your homestay on online travel portals and get clients through the booking platforms. However, you have to pay some homestay commission to these tour operators. An online presence is very important and you have to create a unique brand name for yourself. It will be good to create a website and provide details such as prices and photographs in it.

5. Keep Systems In Place

Your homestay should be clean, organised, safe, and well-stocked. Provide the cleaning staff with a checklist to ensure that everything is spick-and-span. It should provide a healthy and hygienic environment for the guests, and maintain the proper standards as laid down by the regulatory authorities. Fire safety is very important, and so is security. Since home-stays are often located in remote locations, you should have a vehicle and driver on standby for any eventualities, a guest falling ill for instance.

6. Customer Service

Look for ways to continuously improve your customer service and solve any problems guests may have. Try to look at things from your guest’s perspective. For most guests, high-speed internet is a must, and you must provide this facility. It is best, to be honest with your guests. For example, if they have to climb some stairs to reach the apartment, it is best to give them this information beforehand.

7. Cost Control

There are several costs in running a homestay. You have to keep proper records of income and expenditure. Once you know how much it costs you to host guests, you will form an idea about how much to charge for the services. Also, try to find out what other similar accommodations are charging before you set your price.

8. Precautions

You should carefully select the guests before allowing them to use your premises. Unruly guests who party hard, and those with alcohol or drug addiction, can mar your reputation. Small families and groups from a company will be your ideal guests.

If your homestay is located in a hilly area, you can offer trekking services to your guests, to break the monotony. Other offbeat activities that the tourists might find interesting are apple picking, growing organic vegetables, etc. You have to involve the family members of the local resident whose accommodations you will be using for the homestay. The guest has to be made to feel like he is an extended member of the host’s family and experience how they actually live and learn about a foreign culture. You need to build a house that has double functions, one as a private home, and second, that can be also used as a lodging.

Running a homestay business is not always a smooth affair; you might have to face some problems. There are no telecommunications signals in several villages in India. Internet is very crucial for homestay owners to market and promote their business. So, you should find a good service provider for this. Since this business is highly competitive, some of your competitors might give ‘bad’ or ‘false’ reviews in the guise of guests. Some of their associates can post remarks on forums about your homestay stating it to be ‘expensive’ or, having ‘poor service’.

You can counter these claims by giving your replies on these forums, and asking for proof. Lack of proper marketing is another problem from which this business suffers. Homestay owners lack the big marketing budgets of large hotel chains to advertise their products. To promote this business, you have to employ cost-effective and innovative tools. Posting high-quality pictures on Facebook and Instagram of happy guests can beat any costly ad campaign.

Homestays are transforming the way people take vacations, and India is no exception. Against the backdrop of the pandemic, people have become more aware of the benefits of healthy living. They are beginning to prefer homestays over traditional hotels because being close to nature would boost their immunity. The Ministry of Tourism has promoted homestays as “ Incredible India-Bed and Breakfast/Homestay establishments” for both domestic and foreign visitors. Unlike hotels, which have huge overheads due to high salaries and taxes, the costs of running a homestay are quite low.

homestay icon on white background

Changing Trends In Hospitality Industry

A good homestay business decision would be to charge 50 percent of the total amount at the time of booking. This will protect you from the risk of a guest cancelling his reservation at the last moment. Guests have been given importance in India since ancient times, and there is a popular saying called “Atithi Devo Bhava” , meaning guest is God. Homestays are fast becoming a popular business option for owners who have extra space in their properties to accommodate travellers. It is a profitable and low investment business idea for any smart entrepreneur.

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homestay business plan pdf

Q. Is homestay business profitable?

Ans- Homestays are fast becoming a popular business option for owners who have extra space in their properties to accommodate travellers. It is a profitable and low investment business idea for any smart entrepreneur.

Q. How do you make money from homestay?

Ans- Some of the best ways to make money with your Homestay Business Model are:

  • Low investment and high returns
  • You don't need to hire too many people
  • You don't have to share the profits
  • Maintenance charges are closer to the ground
  • No bougies expense
  • Registration is easy and affordable

Q. How much does it cost to make a homestay?

Ans- In a general Homestay Business Plan it takes around 10 to 20 if you are building upon an existing house. But if you're building a home from scratch it can easily cost you over 2 crores depending on the type of location and size of house you pick.

Q. Is homestay legal in India?

Ans- The permission for Incredible India Homestay Establishment is given only in cases where the owner or the promoter of the establishment along with their family is physically residing in the same establishment and letting out a minimum of one room and a maximum of six rooms.

Q. Is homestay income taxable?

Ans- Homestay is generally considered a private or domestic arrangement with no taxation implications in the same manner the students are taken in by a family and treated in the same way. For example, a guest may be asked to clean their room or be required to help with household duties.

Utpala Ghosh

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How To Start Your Own Homestay Business and Make a Recurring Passive Income for Your Travels

How To Start A Profitable Homestay Business in 2022 To Fund My Travels

Most people think starting a homestay business is an excellent way to get ahead – make money and use that “passive income” for their vacations.

Sometimes, when I travel with a group, we will stay in an apartment homestay rather than a hotel, which is excellent as we work online.

Plus, we chill out late at night to watch a game or Netflix.

Sometimes, we get an hour or two of work in as well.

For most guests, high-speed internet is a must, and this is one of the requirements that I look for when I book.

If you’re thinking of partnering up with a friend to host an apartment, holiday home, guest house, or even a homestay – I’d like to share some ideas that will make you a great host and repeat business from travelers.

So, if you love hosting and want to start your own homestay business, here’s a quick guide on how to go about it.

If you want to make a passive rental income, you’ve come to the right platform.

The easiest way to start a profitable homestay business is to list your property on platforms like Airbnb, Booking.com, Trip Advisor, and Homestays.com.

Alternatively, you can post ads directly on Facebook, Instagram, and Google to save on the commission charged on such platforms.

If you love hosting, you can start monetizing that spare room in your house by creating a bed and breakfast business.

REGISTER TO MAKE PASSIVE RENTAL INCOME

How To Start Your Own Homestay Business?

As a host, you will want good, quiet tenants who don’t cook up a storm, flood the bathroom, and party in the pool area.

Business people and entrepreneurs are good guests to have . We don’t touch your “stuff,” and it’s’s more comfortable to run homestay experience this way.

Some of my friends, who have run an Apartment for over three years, tell me it is a good investment.

You will reap the rewards if you do it right.

Some of them run their business from Facebook business pages.

Here are the tips on how to be not just a good homestay host but a great one.

Be Honest With Guests if You Want to  Start Your Homestay

While your apartment homestay may not be brimming with ideas nor be the most beautiful apartment ever, you will do well to manage your guests” expectations.

People are happiest when you price it accordingly.

If there are stairs, show these. Using a poetic license (Photoshop) to patch that hole in the wall, clean up pipes, etc., doesn’t work in your favor.

Be upfront about the condition of your rental.

If it has the world’s smallest bathroom and a shower that doesn’t drain properly, please fix the shower.

Please don’t magically make the bathroom bigger or worse; still, use another photo from “elsewhere.” Be open about the condition of your apartment.

State clearly if you provide cooking facilities and describe the equipment and utensils in the kitchen.

As a business owner, you must ensure that the photos you upload show the room just like described.

If you price the rent low, you will attract budget travelers and backpackers who want a cheap, clean room to rest i

Ideas: Remember, the reviews make or break your listing on Airbnb.

Familiarize Yourself with the Local Laws as a Homestay Owner

If you rent an apartment, the Management Cooperation has rules and conditions you must adhere to – some states explicitly state that you CAN NOT let others occupy your unit.

Even though many others are hosting their rooms and apartments without letting their landlords know, they have gone against their lease agreements.

They are subletting, and if your landlord or neighbors find out about it, there may be consequences.

Find out about the local laws and zoning so you can have a plan or even buying your own space to list.

You can also try finding a landlord who doesn’t mind, which might be challenging as noisy occupants will cause the neighbors to complain.

Be flexible with check-in and check-out times.

Sometimes the best vacation plans fall short due to a flight or car delay your guests might encounter.

You need to be contactable either by phone, WhatsApp or Messanger.

Find out their flight schedule, and text to enquire if it works in your favor.

Your guests will know that they can count on you to have a smooth vacation, no matter what.

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HOW TO START A HOMESTAY BUSINESS?

Eight things you need to know to run a homestay business.

Photo of Shivangi Srivastava

WHAT IS A HOMESTAY BUSINESS?

Merits of a homestay business, how to get the license, documents required for applying for licence.

D o you own a house with some spare rooms? Does this make you wonder how you can make money from the extra rooms? Homestay is what you are looking for. Homestays contribute 13 percent of the total accommodations of the top travel destinations in around the globe. This shows how good of a business homestay can be. However if this is new to your ears and eyes, we will try to make you understand things related to Homestay via this blog. We will discuss everything from what exactly is a homestay to how to start a homestay business of your own. Stay tuned.

To put it simply homestay is a form of accommodation in which the host i.e., the owner and his family provides lodging to the visitors in their own home. The room rented out for the visitors is either a spare room in the owner’s home or a quarter nearby. As a host you can either offer meals or can give them a separate kitchen to cook their own food. The concept is somewhat similar to bed and breakfast . The investment cost and labor is low as you already have the space and all you have to do is to renovate it and give it an appreciative look. 

Chair, Cottage, Country Style

Choosing a homestay can be a win-win situation for both the host and the visitor. If we talk about the visitors homestay is advantageous to them in following ways:

  • They get homely accommodation for a reasonable price.
  • When moving to a new city they won’t find it very difficult to adjust if they are living with the locals of that city.
  • The visitors get to know the culture of that place in a better way.
  • The services offered are not only professional but they are also driven by emotions that gives the visitors a nostalgic feel.

Now before knowing how to start a homestay business I’m sure you must want to know how it will benefit you. So here it is:

Packing for a Homestay Stay

  • The first and most attractive point according to me is the low investment cost.
  • Renovating your house is like hitting two birds with one stone. It will give your house a makeover and at the same time the initials for your startup.
  • As the travellers while choosing homestay over hotel look for natural, unfabricated ambience they don’t expect you to give them too much luxury. 
  • Once you get going in this business you will get more visitors and hence greater profits wait for you.

Free photos of Arm

To start a homestay business you have to keep a few things in your mind and the most important of them all is the license. We shall talk about the license in detail later in this blog. But before that I’ve prepared a 8 step guide on how to start a homestay business.

Step 1: Give your spare rooms an aesthetic makeover. Don’t overdo it. Sophistication is what we are looking for here.

Step 2: Get your homestay registered with the ministry of tourism. You will get a license after that. Now you are ready to roll.

Step 3: Make sure to register yourself with some popular websites providing info about homestays to the travellers. This will get you your first customers.

Step 4: Basic amenities like- good internet connection, clear drinking water, good electricity supply, clean and hygienic room and toilet, facility of proper disposal of garbage and other should be included in your homestay.

Step 5:   Charge reasonable fees, make your homestay venture affordable, provide itemized billing system guarantees cost clarity, charging only for chosen services. Experience a budget-friendly journey into starting your homestay business with confidence and ease.

Step 6: Ask the visitors to give honest feedback.

Step 7: Follow up with the feedback and make changes in your homestay accordingly.

Step 8: Do promotions on social media and other platforms. Click eye catchy pictures of the homestay and post it. 

Paper, Contract, License, Signature, Seal, Document

  • The Ministry of Tourism is the legal authority for the homestay business. It classifies the homestay establishments as gold or silver. In some states a third category, diamond is also there. The classification is based on the services and accommodation you offer.
  • The Regional Classification Committee checks the services and facilities.
  • Once approved by the Ministry of Tourism, a short term training on hospitality is also patronised.
  • The owner has to reside with his family in the same establishment to get the license.
  • There are certain set standards that the host has to follow. If not then the ministry is allowed to take any action, cancellation of classification included.
  • If you make any changes in the facilities then you should inform the ministry within 30 days.
  • After all this the owner gets a recognition certificate.
  • Proof of ownership or lease of the building.
  • Location plan that shows access to the building from the major roads.
  • Plan and elevation of the establishment.
  • The photographs of the building including the interiors.
  • Police Clearance Certificate.
  • Permission from the local authority.

I hope through this I was able to answer how to start a homestay business. Homestay business can be a great option if you own a big house and have fewer family members residing in that house. With low investment cost and good remuneration this is certainly a lucrative startup. Another merit of this is that you don’t have to leave your home to make money. Instead you are making money from your home.

ALSO READ:  What is Homestay | All About Homestay Business

Q. WHO CAN APPLY FOR A LICENSE?

A. Both an individual or a family.

Q. WHAT IS THE MINIMUM AND MAXIMUM NUMBER OF SPARE ROOMS FOR THE ACCOMODATION?

A. Minimum 2 rooms and maximum 5 rooms.

Q. DO THE FAMILY HAVE TO RESIDE WITH THE OWNER?

A. Yes, it is mandatory for the family to reside with the owner in the same establishment.

Q. CAN ONE GET THE LICENSE EVEN IF HE DOESN’T SPEAKS ENGLISH?

A. One of the family members should know English.

Photo of Shivangi Srivastava

Shivangi Srivastava

What is homestay | all about homestay business, why are homestays more popular, related articles.

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Start a Homestay Business in Nepal

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One comment.

Same formalities to get licence and approval goes for airbnb also? If Im hosting one of my flat in Airbnb then still I need all this licence and clearance? Another query is you have written under PROOFS REQUIRED FOR APPLYING LICENCE – That permission from local authority. (Can you tell who or which department?) And is it necessary if I have a clearance certificate from police. Please help me with this query! Thanks a lot.

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Start a Homestay Business in Nepal

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How To Start Your Own Homestay Business Featured Image

How To Start Your Own Homestay Business

Are you interested in earning some extra income via a homestay business? Assuming you own or rent a house and is looking for ways to turn it into a profit making business. Here is a guide on how you can transform your unoccupied room or house into a homestay.

1. Get necessary permissions

homestay business plan pdf

If you are renting the place, make sure your landlord is well informed about the subleasing and get their approval. Best in black & white.

 2. Furnish the house

homestay business plan pdf

Now that you have gotten permission, you might need to start thinking about how you want the homestay to look like, or even the theme and concept. Taking a trip down to your nearest IKEA (guests love furniture from IKEA) or furniture store could help inspire you with a better idea.

3. Prepare basic amenities

homestay business plan pdf

4. Take good photos

homestay business plan pdf

Picture speaks a thousand words and it’s very applicable in the homestay business. If you’re planning on taking your business online (who doesn’t these days?), it’s important that you don’t slack out in preparing aesthetically pleasing photos of your homestay. Some tips on taking great photos: Take it during day time where you can get adequate natural light. You may consider seeking help from a photographer friend too!

5. Accept online bookings

Now that you have gotten the necessary steps (1 – 4) done, you’re pretty much ready to welcome your first guest but how do you get your homestay discovered? One of the ways is by taking it online and making full use of the traffic of online travel agencies but there are pros and cons. 

Pros: You will be leveraging on their traffic. 

Cons: At the same time, you are also competing with other potential homestays in your neighbourhood.

However, with Let’s Go Holiday , you get best of both worlds. Not only can you leverage on the traffic, you can minimize the competition by installing the booking system on your own website and even Facebook page to start accepting bookings! Find out how to do it here .

6. Creating engaging promotion

Get more bookings by creating engaging promotions to get your guests hooked! One of the most common way of creating promotions is by creating them in accordance to festive seasons and school holidays because these are the peak travelling seasons. However, there are owners who are more inclined to create promotion during the off-peak season in order to increase the booking.

Whichever promotion you may have, did you know that you can also create promotion which comes with promo code when you list your homestay on Let’s Go Holiday ? Find out how you can sign up to create your first ever promotion .

Create a Facebook fanpage

homestay business plan pdf

Prepare a house manual

homestay business plan pdf

To step up your homestay game and to create a better staying experience for your guests, you might consider investing in a house manual. It doesn’t have to be very fancy (but it’s also completely up to your creativity) as long as it provides the basic guide on ways to work around the appliances in the house. Manual could include the WiFi pass, steps to operate electrical appliances (washing machine, stove or microwave), some basic house rules and even a simple travel guide !

Collect security deposit (returnable)

Security deposit is the reasonable amount of money collected from the guest, usually up-front upon check-in and returnable upon check-out. if there’s any damage found in the house during the guest’s period of stay, owner has the right to not return the deposit or to deduct the damage fee from the deposited money. this is to ensure that your property will be well-protected by the guest., respect guests’ privacy.

homestay business plan pdf

Want to learn more about starting your homestay business? Find out how Let's Go Holiday can help you at accepting and managing online bookings here .

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10 Effective Homestay Business Marketing Strategies

Homestay Business Marketing Strategies

  • 8 minutes read

Running a successful homestay business requires more than a cozy place to stay. To stand out in today’s competitive market, effective marketing is essential for attracting guests and ensuring repeat bookings. In this article, we’ll explore ten highly effective marketing strategies that can boost your homestay business and foster positive reviews and referrals.

From leveraging social media and collaborating with influencers to offering special packages and prioritizing excellent customer service, these strategies can enhance your homestay’s visibility and reputation, leading to sustained growth and success in the hospitality industry.

Read this article on Hospitality at Home: How to Start a Profitable Homestay Business to know more in detail.

10 Effective Marketing Strategies For Your Homestay Business

Here are the 10 most effective marketing strategies that help to boost your homestay business:

1. Build an Engaging Website

Build an engaging website for homestay business marketing

Your homestay’s website is your digital storefront. Invest in creating a visually appealing and user-friendly website . Include high-quality images of your property, detailed descriptions, and easy booking options. Ensure that your website is mobile-responsive to cater to a broader audience.

A well-designed website can significantly boost the marketing of your homestay business in the following ways:

  • Online Presence and Visibility: A website establishes your homestay’s online presence and improves visibility through search engine optimization (SEO).
  • Showcasing Your Homestay: Your website acts as a virtual showcase with images, descriptions, amenities, and guest reviews to attract potential guests.
  • Direct Bookings: A website allows guests to book directly, leading to more direct bookings and higher profit margins.
  • Building Trust and Credibility: A professionally designed website builds trust and credibility by showcasing your commitment to guest experience.
  • Marketing and Promotions: Your website is a platform to promote special offers and discounts, reaching past guests and potential customers effectively.

A well-optimized and visually appealing website is a powerful marketing tool for your homestay business. It not only enhances your online presence but also allows you to showcase your property, attract direct bookings, build credibility, and effectively market your services to a wider audience.

2. Leverage Social Media

Social media marketing for homestay business

Social media platforms are powerful tools for promoting your homestay. Create profiles on popular platforms such as Facebook , Instagram , TikTok, and Twitter. Share engaging content, such as pictures and videos of happy guests, local attractions, and events. Engage with your audience by responding to comments and messages promptly.

Utilize social media analytics to track the performance of your posts and identify which content resonates best with your audience. This data-driven approach can help refine your social media strategy and optimize engagement. A efficient use of social media is one of the most effect homestay business marketing strategies among all.

3. Collaborate with Travel Influencers

Travel Influencers Collaboration for Homestay Business Marketing

Collaborating with travel influencers is a marketing strategy where you partner with individuals who have a significant following and influence in the travel and hospitality niche. These influencers, often active on social media platforms like Instagram, YouTube, and TikTok, have a dedicated audience that trusts their recommendations and opinions.

Collaborating with travel influencers involves leveraging their credibility and reach to promote your homestay. You invite them to experience your property firsthand and they share content like photos, videos, and reviews, showcasing their stay and the unique experiences your homestay offers.

The benefits of collaborating with travel influencers are multi-fold:

  • Increased Visibility: Influencers’ posts and stories about your homestay expose your property to a larger audience, potentially reaching thousands or even millions of followers.
  • Credibility and Trust: Influencers are perceived as trustworthy sources of information, and their positive endorsement of your homestay can boost credibility and trust in the eyes of their followers.
  • Engagement and Interaction: Influencers’ posts often generate high engagement, including likes, comments, and shares, increasing the visibility and reach of your homestay.
  • Authentic Content: Influencers’ content is typically authentic and relatable, resonating well with their audience. This authenticity can make your homestay appear more appealing to potential guests.
  • Influence on Booking Decisions: Many of the influencer’s followers may be inspired to book a stay at your homestay based on the influencer’s positive experience and recommendation.

By collaborating with travel influencers, you can tap into their influence and reach a broader audience, ultimately driving more bookings and enhancing your homestay’s reputation in the competitive hospitality market.

Also read: Host with the Most: 10 Profitable Homestay Business Ideas

4. Offer Special Packages and Discounts

Offering packages and discounts for homestay business marketing

Offering special packages and discounts is a marketing strategy to attract guests. Tailored packages, like family vacation bundles and romantic getaways, add value and entice travelers to choose your homestay.

Discounts, such as early bird offers and loyalty rewards, encourage prompt bookings and build a loyal customer base. The benefits include increased bookings, a competitive advantage, repeat business, word-of-mouth referrals, and marketing opportunities.

By catering to different groups and communicating transparently, this strategy drives bookings, creates memorable experiences, and fosters guest loyalty, contributing to your homestay business’s success and growth.

Also read: Top 10 Freebies Ideas for Small Business

5. Implement SEO Strategies

SEO for Homestay business marketing

Implementing SEO (Search Engine Optimization) strategies involves optimizing your homestay website and content to improve its visibility in search engine results. By using relevant keywords, creating high-quality content, and ensuring mobile responsiveness, you can attract more potential guests and drive bookings for your homestay.

Local SEO is essential for targeting travelers searching for accommodations in specific locations. Overall, effective SEO boosts your online presence, reaching a wider audience and increasing your chances of success in the hospitality industry.

Sure, here are five tips for better SEO for your homestay business:

  • Keyword Research: Find relevant and popular search terms related to your homestay. Use these keywords strategically in your website content and titles to improve search engine ranking.
  • Optimize Website Content: Create valuable content that appeals to your audience. Use identified keywords naturally throughout your content for better visibility.
  • Mobile Responsiveness: Ensure your website works well on mobile devices for a seamless user experience.
  • Local SEO: Include your homestay’s address and nearby attractions to target local travelers in search results.
  • User Experience: Prioritize fast load times, easy navigation, and clear calls-to-action for a positive user experience that pleases search engines.

By implementing these SEO tips, you can enhance your homestay business’s online visibility, attract more potential guests, and increase bookings, ultimately leading to greater success in the hospitality industry.

Also read: Do Google Reviews Help SEO and Search Ranking?

6. Encourage Guest Reviews and Testimonials

Guest Reviews for Marketing of Homestay Business

Responding to positive reviews not only shows appreciation for your guests’ kind words but also demonstrates your commitment to providing excellent service. It also encourages other guests to leave reviews when they see that you actively engage with feedback.

Addressing negative reviews with professionalism and a willingness to resolve issues can turn a negative experience into a positive one, showing potential guests that you care about guest satisfaction and are dedicated to ensuring a pleasant stay for everyone.

7. Host Local Events and Activities

Hosting local events and activities is a marketing strategy that offers unique experiences, showcasing your homestay’s location. By curating cultural workshops, tours, and outdoor adventures, you add value to guests’ stays and differentiate from competitors.

There are many benefits that your homestay business can get from this including enhanced guest satisfaction, a competitive edge, positive reviews, repeat business, and marketing opportunities.

Collaborate with local businesses to create diverse experiences and promote them through your website and social media. This strategy elevates your homestay’s reputation, attracts more guests, and contributes to overall success.

8. Invest in Email Marketing

Implementing an email marketing strategy allows you to build a valuable database of guest contacts, enabling you to reach out to them directly for future promotions and special deals. By segmenting your email lists based on guest preferences and interests, you can tailor your messages to specific groups, increasing the chances of engagement and conversions.

Additionally, email marketing provides a cost-effective means to nurture customer relationships, encourage repeat bookings, and foster guest loyalty over time.

Also read: 10 Free Email Marketing Tools For Small Business

9. Collaborate with Other Local Businesses

Another one of the most effective marketing strategies is doing collaboration with other local businesses. Collaborating with local businesses involves forming partnerships to create promotions and packages that enhance the guest experience and drive more business.

For a homestay, this means teaming up with restaurants for dining packages, tour operators for excursions, and local artisans for unique gifts. By working together, you tap into new audiences, gain exposure, and reinforce authenticity.

Identify like-minded businesses, establish win-win partnerships, and implement joint marketing efforts to foster guest loyalty and attract new customers. This strategy strengthens community ties and positions your homestay as a hub for authentic experiences.

10. Prioritize Excellent Customer Service

Excellent customer service for Homestay business marketing

Prioritizing excellent customer service means delivering exceptional experiences to guests, exceeding expectations at every step. Happy guests lead to satisfaction, loyalty, positive reviews, and word-of-mouth referrals, building your homestay’s reputation. Outstanding service sets you apart from competitors, influencing guests to choose your homestay and return for future stays.

Here are some key aspects of prioritizing excellent customer service:

  • Personalization: Tailor your interactions and services to the specific needs and preferences of each guest. Taking the time to understand their preferences can create a lasting impression.
  • Prompt Communication: Respond to inquiries, requests, and feedback promptly and professionally. Guests appreciate timely and efficient communication.
  • Anticipate Needs: Proactively anticipate and fulfill guest needs. This can include providing recommendations for local attractions, offering extra amenities, or addressing potential issues before they arise.
  • Empathy and Problem Resolution: Show empathy towards guest concerns and resolve any issues promptly and efficiently. Guests will remember how well you handled their concerns and will appreciate your efforts to make things right.
  • Follow-Up: After guests check out, consider following up with a personalized thank-you note or feedback request. This gesture shows that you value their stay and feedback.

Prioritizing excellent customer service creates a welcoming environment, encouraging guest loyalty and referrals. It enhances the guest experience and serves as a powerful marketing tool, driving homestay success and growth.

How to promote your homestay to international travelers?

To promote your homestay to international travelers, utilize online platforms like social media, travel websites, and booking platforms. Offer content in multiple languages, showcase cultural experiences, and highlight nearby attractions. Engage with international audiences through targeted marketing and collaborations with travel influencers.

In the fast-paced and exciting world of hospitality, your homestay business can truly stand out with these ten remarkable marketing strategies in your arsenal. With each strategy, you’ll unlock the secret to attracting a wave of enthusiastic guests, keeping them coming back for more, and crafting unforgettable memories they’ll cherish forever.

So, get ready to unleash the power of marketing magic and watch your homestay thrive in a league of its own! Embrace the adventure, embrace the success – the journey starts here!

FAQs (Frequently Asked Questions)

Address negative reviews professionally and constructively. Acknowledge any issues raised and demonstrate your commitment to improving the guest experience.

While professional photos can enhance the visual appeal of your homestay, you can also take high-quality images with a good camera or smartphone if you have an eye for photography.

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How to Write a Bar Business Plan + Free Sample Plan PDF

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Elon Glucklich

6 min. read

Updated March 17, 2024

Free Downloads: Sample Bar and Brewery Business Plan Templates

From sports bars to neighborhood pubs to upscale cocktail bars—drinking establishments are one of the oldest and most enduring types of businesses.

And the industry is projected to grow nearly 2.5% between 2023 and 2030, leaving plenty of opportunity for new businesses..

But competition in the bar industry can be fierce. You need to know your clientele, competitors, and how you’ll stand out if you want to succeed. Not to mention mapping out all the details of your financials and operations. 

Luckily, you can cover all of that (and more) by writing a business plan.

  • What should you include in a bar business plan?

These are the typical sections to consider including in your bar business plan.

  • Executive Summary
  • Market Analysis
  • Marketing and Sales Strategy 
  • Operations Plan
  • Business Overview

Financial plan

The sections you need will vary depending on why you’re writing a business plan and what you intend to do with it . 

Suppose it’s to manage your operations and not something you expect anyone outside of the business to read. In that case, consider keeping it to a few pages and skipping sections like the executive summary.

If you’re applying for a loan, then you’ll need a more formal plan that includes all the sections listed above.

Check out our step-by-step guide to writing a full business plan for more details.

A sample bar business plan outline.

  • The 6 elements of an effective bar business plan

Executive summary

Your executive summary is a short, high-level overview of your entire plan. 

The summary should give readers a sense of what factors will make your bar successful. That could include securing a high-visibility location, partnering with a chef who will oversee meal preparation, or negotiating deals with brewers to get their beers in your bar.

If you’re seeking a bank loan for your bar, the lender will read your executive summary first. In all likelihood, they won’t read any further unless the executive summary grabs their attention. 

So, make it clear and convincing.

Market analysis

The market analysis may be the most important part of your entire business plan. 

It’s where you carefully research and document:

  • Who your target customers are
  • What they want
  • What other establishments they may consider

Start by identifying the size of your market . Focus on the number of potential customers above the legal drinking age in your area. Then, segment these customers based on demographics such as age, income level, and lifestyle preferences. 

Then look into who you will be competing with. List and research other bars as well as indirect competition from restaurants, clubs, and even grocery stores that sell beer or home entertainment options.

Here are a few examples of what this process will look like:

Bar customer segmentation

If you find there are a lot of college students and younger adults near your bar location, you should cater your offerings to their tastes. But if you’re near office buildings or event venues, you may want to focus on older customers with more disposable income.

Will you offer a more diverse drink menu, better food, or a unique theme? Explain how these factors will set your bar apart and attract customers. Or, if your area lacks a certain type of bar, such as a sports bar or a high-end cocktail lounge, describe how filling this gap in the market will serve as your competitive advantage.

Marketing and sales strategy

Your market analysis gives you insights into potential customers. Your marketing and sales strategy is where you use those insights to get those customers in your door.

As you looked around at your competitive landscape, maybe you gained some insight into how your ideal customers discover new bars — through social media, online reviews, local event listings, or word-of-mouth.

Start by developing marketing strategies that are tailored to those channels . Consider tactics like:

  • Creating engaging social media content showcasing your unique drinks, events and ambiance.
  • Partnering with local businesses or events to increase visibility.
  • Introducing special promotions to encourage repeat visits and attract new customers.
  • Hosting themed nights or events to create buzz and attract specific customer segments.

In your business plan, document how you will implement these efforts and the resources required. 

Operations plan

The operations section of your business plan is where you detail the day-to-day requirements for running the bar smoothly. Start by describing your physical space and key equipment, such as:

  • Beverage dispensing systems
  • Glassware and utensils

Specify the types and number of each that you’ll need. Then you can address staffing needs, describing the roles of bartenders, servers, and support staff. Document in your plan that you’ll have a staffing strategy to cover peak hours.

You should also cover inventory management. Describe how you’ll stock alcoholic and non-alcoholic beverages, ingredients for cocktails and food. Be sure to spend time discussing supply chains for sourcing these ingredients.

Document the types of technology you’re using, like point-of-sale systems, inventory tracking, or customer reservation platforms. 

Finally, ensure that your operations plan demonstrates how you will comply with any licensing, health and safety regulations and that you have a plan for ensuring responsible customer behavior.

Business overview

The overview should fill in any gaps the reader may have, including:

  • The name of your bar
  • When it was founded (if it’s an existing business)
  • The inspiration behind the business

You should include the background and qualifications of key team members here. Include their experience in the bar industry and any other experience that’s relevant to their position.

If you’re running an existing bar, discuss previous achievements like revenue milestones, recognitions, or community events you’ve hosted.

You don’t need a deep financial background to run a successful business. But it’s important to develop projections for how you expect the bar to perform. If you’re starting a new bar, consider that you’ll need to pay upfront costs like equipment, supplies, licenses and rent.

Then there are the ongoing costs like employee salaries, marketing, and continuing to keep your shelves stocked.

Making educated guesses about the future will help you determine what’s working, and where you should make adjustments as you run your business.

Include sales and expense forecasts in your plan. The financial section also should include a cash flow statement , income statement , and balance sheet .

Remember, no one knows exactly how the future will pan out — these projections are your baseline for how you think the business will do, and you’ll adjust them over time as you update your plan with actual results.

  • Bar business plan templates and examples

To see how other bar businesses have created their plans, browse our free library of bar and brewery business plans . You can also check out our full selection of food and beverage business plans , or our entire library of over 550 business plans across industries.

Download as many as you want in PDF or Word format to help you write your own business plan.

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Content Author: Elon Glucklich

Elon is a marketing specialist at Palo Alto Software, working with consultants, accountants, business instructors and others who use LivePlan at scale. He has a bachelor's degree in journalism and an MBA from the University of Oregon.

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