Need a consultation? Call now:
Talk to our experts:
- Strategic Planning
- E1 Treaty Trader Visa
- E2 Treaty Investor Visa
- Innovator Founder Visa
- UK Start-Up Visa
- UK Expansion Worker Visa
- Manitoba MPNP Visa
- Start-Up Visa
- Nova Scotia NSNP Visa
- British Columbia BC PNP Visa
- Self-Employed Visa
- OINP Entrepreneur Stream
- LMIA Owner Operator
- ICT Work Permit
- LMIA Mobility Program – C11 Entrepreneur
- USMCA (ex-NAFTA)
- Online Boutique
- Mobile Application
- Food Delivery
- Real Estate
- Business Continuity Plan
- Buy Side Due Diligence Services
- ICO whitepaper
- ICO consulting services
- Confidential Information Memorandum
- Private Placement Memorandum
- Feasibility study
- Fractional CFO
- Business Valuation
- How it works
- Business Plan Templates
How To Write A Hostel Business Plan
Published May.08, 2023
Updated Sep.14, 2024
By: Jakub Babkins
Average rating 5 / 5. Vote count: 3
No votes so far! Be the first to rate this post.
Table of Content
1. Private Hostel Business Plan Sample and Template
A hostel business plan is an important document that outlines the strategy and objectives of how to open a hostel business plan. It provides the roadmap for business operations and financial projections. The plan should include the hostel’s budget, marketing plan, and operational plans.
It should also include the hostel’s goals and objectives, including potential revenue sources and potential partnerships. A well-crafted Hotsel Business Plan will help ensure the business’s success.
2. Executive Summary
Business overview.
The business plan for building a private hostel outlines our vision to become a leader in the hostel industry by providing a safe and comfortable environment for travelers. We aim to provide a variety of lodging and services that enhance the traveler’s experience. Our services will include dorm-style rooms, private rooms, recreational areas, and an on-site café.
Similar to the Hotel Business Plan Sample , we plan to target backpackers, budget travelers, and other young professionals who are looking for a cost-effective place to stay. We will offer clean and comfortable rooms at competitive rates and will also offer additional amenities such as free Wi-Fi and laundry services. We will provide a safe and secure environment with on-site security personnel at all times.
We plan to build a strong reputation in the industry by offering excellent customer service and providing a unique atmosphere for our guests. We will also invest in marketing and advertising to increase our visibility and attract new customers. We believe that with our quality services, competitive price points, and customer-oriented business strategy, we will be successful in gaining a loyal customer base and gain a strong foothold in the hostel industry.
The business plan hostel example is a comprehensive strategy that seeks to provide a safe, comfortable, and homely environment for travelers at an affordable price. Our products and services include:
- Convenient and comfortable beds and bunk beds
- Fully equipped kitchen and dining area
- Clean and spacious bathrooms and showers
- High-speed Wi-Fi
- 24-hour reception desk
- Entertainment area with TV, exercise equipment, and ping pong table
- Laundry service
- Tour and excursion packages
- Free shuttle service to local attractions and airports
- Secure storage for luggage and personal items
Customer Focus
This sample of business plan for hostel business focuses on providing a comfortable and affordable travel experience for our customers, who are mainly young travelers looking for a safe and convenient place to stay. Compared to the Motel Business Plan , we will achieve this by offering various services, such as free Wi-Fi, laundry facilities, a well-stocked kitchen, and a friendly and knowledgeable staff that can provide helpful advice on local attractions. We aim to create a unique and enjoyable experience that will leave our customers satisfied, relaxed, and eager to return to our hostel.
Management Team
Our hostel business, The Adventurers Inn, is run by a team of experienced professionals in the hospitality industry. Our team consists of a General Manager, a Manager of Operations, a Sales and Marketing Manager, and a Financial Controller. Our team members have extensive knowledge in their respective fields and strive to provide our guests with the best possible experience. We are passionate about providing unique and quality services to our customers and are committed to being the best hostel business in the area. With our expertise and dedication to customer satisfaction, we believe The Adventurers Inn will be a successful and profitable venture.
Success Factors
The youth hostel business plan focuses on providing affordable, comfortable, and safe accommodations for travelers worldwide. We will differentiate ourselves from the competition by providing unique amenities and services that will make our hostel stand out by learning Hotel Feasibility Studies . Our success will be based on our ability to provide a superior customer experience, a convenient location, and a reliable and secure facility. We will also strive to create a unique, fun atmosphere that will attract and retain guests. Furthermore, we will focus on creating a strong online presence and utilizing digital marketing strategies to reach our target customers. By leveraging these strategies, we are confident that our hostel business will become a success.
Financial Highlights
The Adventurers Inn is a unique hostel concept that will provide travelers with an affordable and comfortable place to stay while exploring the city. With this business plan, we are seeking $500,000 in capital to create our first hostel in the city’s heart.
- Projected sales of $1.6 million in Year 3
- Gross profit margins of 70%
- 10% of profits reinvested into hostel growth
- Year 1 ROI of 17.3%
- Year 3 ROI of 29.1%
3. Company Overview
Who is the adventurers inn hostel, highly efficient service.
Highly Efficient Service! I am incredibly happy with the outcome; Alex and his team are highly efficient professionals with a diverse bank of knowledge.
The Adventurers Inn Hostel is a modern hostel located in Florida, offering both short and long-term accommodations for travelers. We aim to provide a safe, welcoming, and affordable place for travelers from all walks of life while creating a unique atmosphere to explore the city and meet other travelers.
Our hostel is run by a team of experienced professionals with a combined experience of over 30 years in the hospitality industry. We are passionate about creating an environment conducive to a great experience for all our guests.
At the Adventurers Inn Hostel, we offer our guests a full range of amenities, including a fully-stocked kitchen, laundry facilities, and a common area. We also have a 24-hour front desk, where our helpful staff can assist with any queries or questions.
Our hostel is also designed to be a hub for travelers and local residents alike. We provide a space for travelers to meet and share their experiences and a place for local businesses to promote their services and products.
The Adventurers Inn Hostel is committed to providing an exceptional experience for our guests. Our goal is to create a place where travelers can explore the city while feeling at home and making lifelong memories with their newfound friends.
The Adventurers Inn Hostel History
The Adventurers Inn Hostel was founded by two close friends, David and Sarah, who wanted to create a unique accommodation experience for travelers. The two were inspired by their travels worldwide and wanted to create a place where travelers could feel at home and make new friends.
David and Sarah opened the first Adventurers Inn Hostel in 2017 in a charming Victorian building in the heart of Florida. The hostel quickly became a popular spot for travelers, offering a unique and homey atmosphere in addition to free Wi-Fi, private rooms, and shared spaces.
Since then, the Adventurers Inn Hostel has grown to have multiple locations in the United States and Canada. Each hostel offers a unique experience, from cozy rooms to vibrant common spaces and activities like barbecues and movie nights. The Adventurers Inn Hostel is dedicated to providing a comfortable and memorable stay for all its guests.
David and Sarah have been working hard to ensure that each location maintains its unique character but also offers consistent service and amenities. The Adventurers Inn Hostel is dedicated to providing travelers with a unique and memorable experience, and the team is passionate about creating a welcoming and safe atmosphere for everyone.
4. Industry Analysis
The hostel industry is an ever-growing and profitable industry. The global hostels market size will grow from $6.04 billion in 2022 to $6.35 billion in 2023 at a compound annual growth rate (CAGR) of 5.2%. This growth is driven by the increasing popularity of budget travel and the growing number of young people who are looking for affordable accommodation options.
Source: https://www.thebusinessresearchcompany.com/report/hostels-global-market-report
The hostel industry is highly competitive, with several large companies such as Hostelworld, Hostelling International, and YHA dominating the market. To succeed in this industry, businesses must provide quality services, competitive prices, and a great customer experience.
It is important to analyze the industry trends to understand the current market dynamics. The most important trend in the hostel industry is the increasing demand for private rooms. This trend is driven by the growing number of travelers looking for more privacy and comfort during their travels. Additionally, hostels are increasingly catering to business travelers by providing amenities such as Wi-Fi and in-room dining services.
It is important to understand the target market to gain a competitive edge in the market. The hostel industry is primarily focused on the budget traveler market, with most guests between the ages of 18-35. Additionally, there has been a rise in the number of families using hostels to accommodate their travel needs.
Finally, it is important to consider the impact of technology on the hostel industry. Hostels are increasingly using online technologies to facilitate bookings and improve customer experience. Additionally, social media is becoming an important tool for hostels to build brand awareness and reach out to potential customers.
Ultimately, the hostel industry is growing and profitable. To succeed in this market, businesses must focus on providing quality services, competitive prices, and a great customer experience. Additionally, understanding the target market and utilizing technology will help businesses gain a competitive edge.
5. Customer Analysis
Demographic profile of target market.
The target market for how to start a hostel in the USA includes budget-minded travelers seeking affordable accommodations. These travelers are typically younger adults aged 18-40, with a median age of 25-30. The demographic profile of the target market includes the following:
- Predominantly singles or couples
- Predominantly from the United States and Europe
- Predominantly college-educated
- Predominantly students, interns, digital nomads, backpackers, and other budget travelers
- Predominantly seeking a short-term stay of less than one week
- Predominantly seeking basic, shared accommodations with access to local amenities
Customer Segmentation
- Backpackers and Adventurers : This segment consists of people who are looking for the adventure of staying in a hostel and who are willing to pay for the experience. This group of customers tends to be young travelers and usually has limited budgets. They enjoy exploring new places and are usually looking for a place to stay that offers a unique, exciting experience.
- Budget Travelers: This segment includes people who are looking to save money when traveling. They tend to be more cost-conscious and prefer to stay in a hostel due to the lower cost. They are often seeking a place to stay that offers basic amenities and services at an affordable price.
- Business Travelers: This segment includes those traveling for work and needing to stay in a hostel due to the lower cost. They tend to be looking for a place to stay that offers basic amenities but also has more modern amenities such as Wi-Fi and laundry services.
- Families: This segment includes families who are looking for a place to stay that is both affordable and family-friendly. They may be looking for a hostel that offers private family rooms and amenities such as a playground or a pool.
- Groups: This segment includes groups of friends or families looking to stay together in one location. They usually seek a hostel that offers private rooms or large dorms to accommodate their group.
6. Competitive Analysis
A competitive analysis allows an entrepreneur to assess their potential competitors’ strengths and weaknesses and understand the market they are entering. The following is a brief competitive analysis of the hostel business plan.
Direct and Indirect Competitors
Direct Competitors
- Hostels.com: Hostels.com is a top hostel booking website that offers competitive prices on a wide range of hostels in various locations worldwide. They offer budget-friendly rates with access to amenities like free Wi-Fi, kitchenettes, and bike rentals.
- Airbnb: Airbnb is an online platform that allows travelers to find short-term accommodations in various locations worldwide. They offer a variety of different types of accommodations, including private rooms and entire homes.
- Hostelworld: Hostelworld is an online booking platform for hostels in over 170 countries. They offer many amenities, such as free Wi-Fi, bike rentals, and kitchenettes.
- HostelBookers: HostelBookers is an online booking platform for hostels in over 170 countries.
Indirect Competitors
- Hotels: Hotels offer a wide range of accommodations in various locations worldwide. They offer amenities such as swimming pools, fitness centers, and spas.
- Bed and Breakfasts: Bed and breakfasts offer a more intimate, home-like experience than a hotel. They are often located in quaint, rural areas and offer amenities such as home-cooked meals and access to outdoor activities.
- Guest Houses: Guest houses are typically smaller than hotels and offer a more personal experience. They offer free Wi-Fi, private bathrooms, and access to local activities.
- Vacation Rentals: Vacation rentals are typically private homes that are available for short-term rental. They offer amenities such as private pools, hot tubs, and access to beaches and other outdoor activities.
Competitive Advantage
The competitive advantage of our hostel business plan is that it provides a unique and affordable accommodation experience for domestic and international travelers and you can start your own hostel by taking help from this business plan. It will offer a unique atmosphere of comfort and relaxation that is not found in other hostels or hotels. It will also offer a variety of amenities and services, such as free Wi-Fi, cable TV, and laundry facilities. Additionally, it will feature an on-site restaurant and bar, providing an opportunity to socialize with other travelers and make the most of their visit. It will also be conveniently located in a major city, providing easy access to all the city’s attractions and activities. Finally, our hostel will provide excellent value for its price, offering more amenities and services than other hostels in the area.
7. Marketing Plan
The marketing plan of a hostel should focus on its competitive advantages, such as its convenient location, affordable prices, and unique amenities. To ensure that potential guests are aware of these advantages, the hostel should employ various promotional tactics to reach them. These tactics should include online advertising, direct mail, and local advertising.
- Online Advertising: Online advertising is a great way to reach a wide range of potential guests. The hostel should advertise on websites that cater to the type of guests they are targeting. This could include travel websites, student websites, and budget-travel websites. Additionally, the hostel should create its own website and social media accounts to reach potential guests. All accounts should be regularly updated with promotions, discounts, and new amenities.
- Direct Mail: Direct mail is another great way to reach potential guests. The hostel should create a mailer that contains information about the hostel and its advantages. The mailer should include photos, contact information, and a call to action. The hostel should target students, budget travelers, and other potential guests in their area with their mailers.
- Local Advertising: Local advertising is important for reaching potential guests in the immediate area. The hostel should create flyers, distribute them to local businesses, and create ads in local publications. Additionally, the hostel should create relationships with local businesses to promote their offerings. These businesses could include restaurants, attractions, and transportation options.
Promotions Strategy
Social Media: Utilize social media platforms such as Facebook, Instagram, and Twitter to promote the hostel. Post engaging content, such as pictures and videos of the hostel and its amenities, as well as discounts and special offers. Utilize influencers to reach a wider audience and create a buzz around the hostel.
Advertising: Create ads in newspapers, magazines, and online to reach potential customers. Focus on targeting young adults who are seeking a unique and affordable accommodation option.
Events: Plan events such as art shows, movie nights, or music festivals to draw in more customers. Partner with local businesses to provide discounts to hostel guests.
Referral Program: Create a referral program to incentivize existing customers to spread the word about the hostel. Offer rewards such as discounts or free stays for referring friends and family.
Word-of-Mouth: Encourage customers to share their experiences at the hostel with their friends and family. To do this, provide an exceptional experience to ensure customers are excited to share their positive experiences.
The pricing strategy for the hostel should be competitive and value-oriented in how to start and manage a hostel business. Offer discounts for extended stays, group bookings, students, and other categories of guests. Consider offering membership discounts to encourage loyalty and reward frequent customers. Additionally, consider offering package deals that include meals, tours, and transportation. This will help draw in more customers looking for an all-inclusive experience.
8. Operations Plan
Operation functions.
Maintenance: The hostel will have a dedicated maintenance team responsible for the upkeep of the facility. This includes regular inspections of the hostel’s interior and exterior, addressing any maintenance issues such as plumbing, electrical, and structural repairs, and general cleaning.
Security: The hostel will have a security team in place to ensure the safety of guests and staff. This includes installing a CCTV system, regular patrols of the premises, and enforcing security guidelines.
Guest Services: The hostel will have a team of staff dedicated to providing excellent customer service. This includes managing bookings and reservations, processing payments, and providing any necessary information about the hostel and the local area.
Food Services: The hostel will also have a food services team responsible for preparing and serving meals to guests. This includes purchasing food supplies, preparing meals, and cleaning up after meals.
3/15/202X – Develop a comprehensive business plan
3/22/202X – Research current market conditions and industry trends
4/1/202X – Secure a suitable location
4/8/202X – Recruit and hire a management team
4/15/202X –Acquire necessary licenses, permits, and insurance
4/22/202X – Purchase furniture and equipment
5/1/202X – Market and advertise the hostel
5/8/202X – Open for business
5/15/202X – Launch Third Product Line
5/22/202X – Monitor performance and adjust operations as needed
Licensing organization in the Hostel Business industry: https://www.sba.gov/business-guide/launch-your-business/apply-licenses-permits
9. Management Team
The hostel business plan’s management team comprises individuals with backgrounds in hospitality, tourism, and business.
- The Hostel Manager: The Hostel Manager is responsible for the day-to-day operations of the hostel. They will be responsible for managing the staff and providing customer service to the guests. They will also oversee the hostel’s marketing, advertising, and budgeting.
- The Operations Manager: The Operations Manager ensures that the hostel runs efficiently. They will be in charge of the facility maintenance and housekeeping staff, as well as ensuring that all necessary supplies and equipment are stocked and readily available.
- The Marketing and Advertising Manager: The Marketing and Advertising Manager will create and implement marketing and advertising campaigns for the hostel. They will also be responsible for developing relationships with travel agents and tour operators to increase occupancy rates.
- The Financial Manager: The Financial Manager is responsible for the financial health of the hostel. They will be in charge of bookkeeping, budgeting, and financial analysis. They will also be responsible for setting up payment processing systems and managing accounts receivable.
- The Sales Manager: The Sales Manager will be responsible for developing relationships with tour operators, travel agents, and other companies in order to increase occupancy rates. They will also be responsible for creating and managing sales campaigns and promotions.
10. Financial Plan
Startup Costs: The estimated startup costs for the hostel business are estimated to be $200,000. This includes the cost of purchasing the building, renovations, furnishings, and other miscellaneous expenses.
Fixed Costs: The fixed costs for the hostel business include rent, utilities, insurance, staff wages, and other miscellaneous expenses. These costs are estimated to be $25,000 per month.
Variable Costs: The variable costs for the hostel business include food, beverages, and supplies. These costs are estimated to be $2,000 per month.
Key Revenue & Costs
Key Revenue
- Room rentals: $30,000/month
- Food and beverage sales: $10,000/month
- Miscellaneous services: $10,000/month
- Rent: $10,000/month
- Utilities: $5,000/month
- Insurance: $2,000/month
- Staff wages: $6,000/month
- Miscellaneous expenses: $2,000/month
Variable Costs
- Food: $1,000/month
- Beverages: $500/month
- Supplies: $500/month
Funding Requirements and Use of Funds
Funding Requirements
- $250,000 for the purchase of the building and land
- $200,000 for renovations and repairs to the building
- $50,000 for furnishings, fixtures, and equipment
- $50,000 for business start-up costs
- $100,000 for working capital
Use of Funds
- Purchase of the building and land
- Renovations and repairs to the building
- Furnishings, fixtures and equipment
- Business start-up costs
- Marketing, advertising and promotion
- Payroll expenses
- Insurance
- Technology infrastructure
- Legal and accounting fees
- Working capital
Key Assumptions
Target market size: 5 million college and university students
Starting occupancy rate: 40%
Room rental rate: $30/night
Market occupancy rate: 60%
Annual capital expenditures: $100,000
The average growth rate of the target market: 2%
The number of hostel rooms: 100
Total operating expenses: $200,000
Average personnel costs: $50,000
Average marketing costs: $20,000
Financial Projections
All tables in Hostel Business Plan PDF .
11. Unlock the Keys to Your Hostel’s Success: Let OGS Show You the Way!
The OGS Capital team is highly experienced when it comes to helping entrepreneurs and business owners launch their dream hostel.
Our team has years of experience in the hospitality industry, and we are experts in designing and executing hostel business plans tailored to each client’s needs. We understand the unique challenges of the hostel industry and can create a comprehensive plan that includes everything from market analysis and financial planning to marketing and operations.
Our experience ensures that your hostel will have the best chance of success. We can provide the guidance you need to make sure your hostel is profitable and successful.
So if you’re looking to start a hostel, don’t hesitate to contact us today for a free consultation, and find out how much it costs to start a hostel with OGS Capital.
Is it profitable to run a hostel?
Yes, it can be profitable to run a hostel. Hostels can offer travelers budget-friendly accommodations and can be highly profitable if managed correctly. Many hostels have found success by offering amenities like free Wi-Fi, complimentary breakfast, and organized activities for guests. Additionally, hostels can benefit from leveraging social media to promote their business and attract customers.
What makes a hostel successful?
Successful hostels provide a unique combination of a comfortable and clean atmosphere, friendly staff, and a great range of amenities and activities that appeal to guests. They offer a convenient and affordable accommodation option, as well as a community atmosphere that encourages guests to socialize and explore the area. Successful hostels are usually well-equipped with modern amenities, such as free Wi-Fi, laundry facilities, and a shared kitchen and lounge area. They often provide activities and events that help guests to connect with each other and the local culture. They also have a variety of room types, from private rooms to shared dorms, to accommodate different budgets and expectations. In addition, successful hostels typically have a helpful and friendly staff that can provide information and advice on local attractions, transportation, and other services, as well as answer any questions guests may have.
Download Hostel Business Plan Sample in PDF
OGSCapital’s team has assisted thousands of entrepreneurs with top-rated document, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.
Any questions? Get in Touch!
We have been mentioned in the press:
Leave a Reply Cancel reply
Your email address will not be published. Required fields are marked *
Save my name, email, and website in this browser for the next time I comment.
Search the site:
A Sample Student Accommodation Business Plan Template
By: Author Tony Martins Ajaero
The real estate industry is a very vast industry and new businesses keep unraveling in the industry from time to time. There is a wide range of businesses with good turnover that an aspiring entrepreneur who is looking towards starting a business in the real estate industry can successfully start. One of such businesses is a student accommodation rental business.
This business requires minimal startup capital and minimal manpower and can be started from a home office especially if you are not going to raise money to develop the properties yourself. If you have decided to start a student accommodation business, then you need to write your own business plan.
The essence of writing a business plan before starting any business is for you to have a blueprint of how you would setup, manage and expand your business. Below is a sample student accommodation rental company business plan template that will help you successfully write yours with little or no stress.
Suggested for You
- How to Write a Car Wash Business Plan [Sample Template]
- How to Write a Taxi Business Plan [Sample Template]
- How to Write a Butchery Business Plan [Sample Template]
- A Sample Property Development Business Plan Template
- How to Write a Cleaning Business Plan [Sample Template]
How to Write a Student Accommodation Business Plan [Sample Template]
1. industry overview.
Student accommodation business is classified under the real estate industry and the real estate industry is one of the many industries that is a major contributor to the growth of the economy of many nations of the world. As a matter of fact, a real estate agent can become a millionaire ‘overnight’ from just one real estate deal; little wonder the industry is responsible for making many instant millionaires in South Africa, as well as the rest of the world.
The Bureau of Labor Statistics projects 11.1 percent job growth for real estate sales agents between 2012 and 2022, which is about as fast as average. During that time, an additional 38,000 jobs will open up.
south africa is attracting a good number of foreign students and the latest research by Jones Lang LaSalle (JLL) has found that the number of young adults aged 18-25 will increase to almost 100 million by 2022, and that the demand for new, purpose-built student accommodation is set to top 500, 000 beds in the next five years.
Current accommodation arrangements can accommodate fewer than one in five students who apply for residency, and student numbers are growing annually as increasing numbers of young people complete their secondary schooling.
The real estate industry involves the buying, the selling, or the renting of lands, buildings or housing facility. Real estate agency or a real estate agent (broker) is a person who acts as a middleman between the sellers and buyers of real estate. They are involved in searching for sellers who sell properties and buyers who to buy properties.
A real estate agency (brokerage firm) usually receives a payment called a commission for successfully matching a seller’s real estate with a buyer’s real estate need such that a sale or rent/lease can be made. In most cases, the commission generated is shared with other real estate brokers or agents who played their parts in ensuring that the property is sold or rented out as the case may be.
It is important to state that in South Africa, each province has its own unique laws that clearly define the types of relationships that can exist between real estate agencies (professionals) and property owners (clients). Nonetheless, it is always a win – win for both real estate agencies and owners of properties because real estate brokers and their salespersons (commonly called “real estate agents” or “brokers”) usually assist sellers in marketing their property and selling it for the highest possible price under the best terms.
The real estate industry is highly regulated in South Africa and anyone who aspires to become a real estate agent or start a real estate agency must apply and obtain a license before they can legally receive remuneration for services rendered as a real estate agency or real estate broker. But as a lawyer, you can handle real estate deals in South Africa and make your commission without operating as a licensed real estate agent.
The practice is that a real estate licensed agent is required to disclose to prospective buyers and sellers the nature of their relationship within the transaction and with the parties involved in the deal. It is the practice for most standard student accommodation rental companies to also engage in other forms of rental businesses as it relates to properties . Some even go as far as engaging in property development.
Service delivery for a student accommodation rental company is simple and straight forward, especially if they are not involved in other complimentary services within the scope of their business.
2. Executive Summary
Oliver Tambo & Co® Real Estate Agency, LLP is a real estate agency that will operate in all the Province in South Africa but will be headquartered in Cape Town close to the University of Cape Town which happens to be the oldest University with the highest enrollment in South Africa.
We intend to become specialists in owning, developing, acquiring, managing, selling and renting/leasing students’ accommodation, office apartments and hall facilities. This can generally be summed up as clean, safe accommodation within easy reach of campus at an affordable price, and in our experience, the most consistent demand is for newly-built and pre-owned one and two-bedroom sectional title apartments with high tech security, parking and good access to shops and other amenities as well as the campus.
Part of our goal as a real estate agency is to grow to become one of the top 5 largest real estate companies in the whole of South Africa and to rent and manage properties across university campuses in South Africa.
Oliver Tambo & Co® Real Estate Agency, LLP will be committed when it comes to maintaining a diverse portfolio of high quality students’ apartment, office structures and hall facilities. We will also focus on providing a dynamic, proactive and vibrant work environment for all our employees such as discounted rentals for all our student agents and caretakers, and mouthwatering bonus for every deal that comes through any of the staff.
Oliver Tambo & Co® Real Estate Agency, LLP is going to be a self-administered real estate investment trust (REIT). We will engage in a wide range of student accommodation rental services. We will work towards becoming one of the largest student accommodation rental companies in South Africa.
As part of our plans to make our customers our number one priority and to become one of the leading student accommodation rental companies in South Africa, we have perfected plans to adopt international best practices that can favorable compete with the best in the industry. Oliver Tambo & Co® Real Estate Agency, LLP has overtime perfected plans that will help us to become a specialist in our area of business.
Oliver Tambo & Co® Real Estate Agency, LLP will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible. We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.
Oliver Tambo & Co® Real Estate Agency, LLP is founded by Rowland Oliver Tambo, Sean Mbeki and Sarah Zuma. They are the major financiers of the company. R. Oliver Tambo is the company’s president and CEO. Rowland Oliver Tambo has over 10 years of real estate experience in significant senior management positions in the areas of sales, marketing, new technologies and franchise management.
3. Our Products and Services
Oliver Tambo & Co® Real Estate Agency, LLP is going to offer varieties of services within the scope of the real estate industry in South Africa. Our intention of starting our student accommodation rental company is to favorably compete with leading players in the student accommodation rental industry in South Africa.
We are well prepared to make profits from the industry and we will do all that is permitted by the law in South Africa to achieve our business goals and objectives. Our business offerings are listed below;
- Rental of one-unit student accommodation structures
- Rental of two- to four-unit student accommodation structures
- Rental of five- to nine-unit student accommodation structures
- Rental of 10- to 19-unit student accommodation structures
- Rental of 20- to 49-unit student accommodation structures
- Rental of 50- or more unit student accommodation structures
- Rental of manufactured student homes, mobile homes or trailers
- Real estate consultancy and advisory services
4. Our Mission and Vision Statement
- Our vision is to become one of the top 5 student accommodation rental companies in South Africa within the first 10 years of starting R. Oliver Tambo & Co® Real Estate Agency, LLP.
- Our mission of starting a student accommodation rental business is to grow the business beyond the city where we are going to be operating from to become a national and international brand by opening offices all across key cities in South Africa and franchising .
Our Business Structure
Our company’s structure is not entirely different from what is obtainable in the real estate industry, as a matter of priority, we have decided to create a structure that will allow for easy growth for our business, and we have created platforms that will enable us attract some of the best hands in the industry.
We are quite aware that the success of any business lies in the foundation on which the business is built on, which is why we have decided to build our student accommodation rental company on the right business foundation. We will ensure that we only hire people that are qualified, honest, hardworking, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders.
As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more depending how fast we meet our set target.
Oliver Tambo & Co® Real Estate Agency, LLP is aware of the modus operandi in the student accommodation rental line of business, hence adequate provision and competitive packages has been prepared for independent real estate agents. Our marketing department will be responsible for managing this aspect of our business.
Below is the business structure we will build R. Oliver Tambo & Co® Real Estate Agency, LLP on;
- Chief Executive Officer
- Company’s Lawyer / Secretary
Admin and HR Manager
Real Estate Agents
- Business Developer/Sales and Marketing
- Customer Service Executive / Front Desk Officer
5. Job Roles and Responsibilities
Chief Executive Officer – CEO (President):
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
Company’s Lawyer/Secretary/Legal Counsel
- Responsible for drawing up contracts and other legal documents for the company
- Consult and handle all corporate legal processes (e.g. intellectual property, mergers & acquisitions, financial/securities offerings, compliance issues, transactions, agreements, lawsuits and patents et al)
- Develops company policy and position on legal issues
- Researches, anticipates and guards company against legal risks
- Represents company in legal proceedings (administrative boards, court trials et al)
- Play a part in business deals negotiation and take minutes of meetings
- Responsible for analyzing legal documents on behalf of the company
- Prepares annual reports for the company
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Designs job descriptions with KPI to drive performance management for clients
- Regularly hold meetings with key stakeholders to review the effectiveness of HR Policies, Procedures and Processes
- Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
- Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
- Defines job positions for recruitment and managing interviewing process
- Carries out induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Oversees the smooth running of the daily office activities
- In charge of leasing and renting out student accommodations and other properties under our list
- In charge of inspecting and reporting on the structural attributes of a building
- Evaluates the component systems of a building (electrical, fire, roofing and plumbing)
- Assesses compliance with building, electrical, plumbing and fire codes
- Evaluates building plans and permits
- Reviews and approves plans that meet building codes, local ordinances and zoning regulations
- Keeps daily logs, including photographs taken during inspection
Marketing and Sales Executive/Business Developer
- Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
- Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
- Responsible for supervising implementation, advocate for the customer’s need s, and communicate with clients
- Finds and qualifies land for development based on company’s land requirements; maintains a land search database; initiates discussions with property owners about the possible sale of property
- Develops, executes and evaluates new plans for expanding sales
- Documents all customer contact and information
- Represents the company in strategic meetings
- Helps to increase sales and growth for the company
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managers with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting for one or more properties.
- Responsible for developing and managing financial systems and policies
- Accountable for administering payrolls
- Ensures compliance with taxation legislation
- Handles all financial transactions for the company
- Serves as internal auditor for the company
Front Desk/Customer’s Service Officer
- Receives Visitors/clients on behalf of the organization
- Receives parcels/documents for the company
- Handles enquiries via e-mail and phone calls for the organization
- Distributes mails in the organization
- Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
- Manages administrative duties assigned by the line manager in an effective and timely manner
- Consistently stays abreast of any new information on the company’s properties that are put up for sale to ensure accurate and helpful information is supplied to clients when they make inquiries.
6. SWOT Analysis
Starting a student accommodation rental business in South Africa comes with its own fair share of challenges, you would have to abide by the law and also compete with loads of other entrepreneurs in the real estate business value chain who also are interested in making a living and building a business in Cape Town – South Africa.
In order to compete favorably in the student accommodation rental line of business, we have been able to hire the services of a tested and trusted HR consultant to help us conduct our SWOT analysis. Here is a summary from the result of the SWOT analysis that was conducted on behalf of R. Oliver Tambo & Co® Real Estate Agency, LLP.
Some of the strengths that we will be bringing to the table in the student accommodation rental industry are our robust relations with student accommodation owners in the whole of South Africa. Also, we have a team of experts that have cut their teeth in the real estate industry cum student accommodation line of business. Our commission structure and relationship with freelance real estate agents in Cape Town and other Provinces in South Africa will also count towards our advantage.
As a newbie in the student accommodation rental line of business, we might have some challenges competing with big time realtors and other student accommodation rental companies that have been in the industry for many years; that perhaps is part of our weakness.
- Opportunities:
The opportunities in the real estate industry especially as a student accommodation rental company is massive considering the rapid growth of university enrollments in South Africa, this trend has been bolstered by highly favorable demographics. We are well – positioned and ready to take advantage of any opportunity that comes our way.
Some of the threats that we are likely going to face as a student accommodation company are unfavorable government and university governing board policies, and global economic downturn. Global economic downturn usually affects spending power and the real estate industry is known to encounter decline in sales and profits during this period.
There is hardly anything we could do as regards these threats other than to be optimistic that things will continue to work for our good.
7. MARKET ANALYSIS
- Market Trends
The market trends in the student accommodation line of business in South Africa is such that international students are targeted since they are the ones who are willing to pay more to get secured and decent students’ apartment. As a matter of fact, security is a key factor when it comes to renting a student apartment in South Africa and next to security is closeness to the campus.
Another obvious trend that is common with student accommodation rental companies in South Africa is that most of them are improvising on more means of making money in the real estate industry and as matter of fact they are also acting as property developers and home staging agents amongst many other functions.
One thing is certain for every student accommodation rental company; if they are hardworking, creative and proactive, they will always generate enough income to meet all their overhead and operational costs, keep their business going without struggle and make reasonable profits from their business deals.
8. Our Target Market
As a student accommodation rental company, our target market cuts across students of different classes and cultures. We are coming into the student accommodation rental industry with a business concept that will enable us work with local and international students who are interested in renting student apartments at an affordable price.
Our Competitive Advantage
The availability of competent and reliable real estate agents under our payroll, our business process, the financial structure of the company, management of a high-quality asset portfolio, superior financial and debt management and of course our pricing model, are part of our competitive advantage.
Another possible competitive strategy for winning our competitors in this particular industry is to build a robust clientele base and ensure that our student apartments are trendy. Our organization is well positioned, key members of our team are highly reliable and competent and can favorably compete with the some of the best in the student accommodation rental industry.
Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry. It will enable them to be more than willing to build the business with us and help deliver our set goals and objectives. We will also engage freelance marketing agents on a commission to help us market our services.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Oliver Tambo & Co® Real Estate Agency, LLP is established with the aim of maximizing profits in the student accommodation rental industry. Below are the sources we intend exploring to generate income for R. Oliver Tambo & Co® Real Estate Agency, LLP;
10. Sales Forecast
It is a known fact that as long as there are students in University campuses in South Africa, there will always be need to for them to hire the services of student accommodation rental companies from time to time.
We are well positioned to take on the challenges that are synonymous to student accommodation rental businesses in South Africa, and we are quite optimistic that we will meet out set target of generating enough profits from our first month of operation and grow the business beyond Cape Town to other Provinces in South Africa within record time.
We have been able to critically examine the student accommodation rental line of business, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions peculiar to similar start – ups in Cape Town – South Africa;
- First Fiscal Year: R200,000
- Second Fiscal Year: R500,000
- Third Fiscal Year: R800,000
N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and any major competitor offering same services as we do within the locations we have strong business presence. Please note that the above projection might be lower and at the same time it might be higher since some factors are beyond our control.
- Marketing Strategy and Sales Strategy
We quite mindful of the fact that there are competitions in the student accommodation rental market in South Africa, hence we have been able to hire some of the best business developers to handle our sales and marketing.
Our sales and marketing team will be recruited based on their vast experience in the industry and they will be trained on a regular basis to meet their targets and the overall goal of the organization. The training is not restricted to only our full – time employees but also all our freelance brokers that are scattered all over university campuses in South Africa.
Our goal is to become one of the leading student accommodation rental companies in South Africa which is why we have mapped out strategies that will help us take advantage of the available market and grow to become a major force in the industry.
Oliver Tambo & Co® Real Estate Agency, LLP is set to make use of the following marketing and sales strategies;
- Introduce our student accommodation rental company by sending introductory letters alongside your brochure to students and other key stake holders throughout the city where our company is located.
- Print out fliers (list of accommodations for rent) and business cards and strategically drop them in offices, car parks, libraries, public facilities and train stations et al.
- Use friends and family to spread word about our business
- Post information about our company and the services we offer on bulletin boards in places like car parks, schools, libraries, and local coffee shops et al
- Place classified advertisements in the newspaper, or local publication about our company and the services we offers
- Leverage on referral networks such as agencies that will attract clients (students) who would need our student apartments
- Advertise our student accommodation rental services company in relevant real estate magazines, newspapers, TV and radio stations.
- Attend relevant real estate expos, seminars, and business fairs et al to market our services
- Engage in direct marketing approach
- Encourage the use of Word of mouth marketing from loyal and satisfied clients
- Join local chambers of commerce and industry to market our product and services.
11. Publicity and Advertising Strategy
We have been able to work with our consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market. We are set to take the student accommodation rental industry by storm which is why we have made provisions for effective publicity and advertisement of our company.
Below are the platforms we intend to leverage on to promote and advertise our student accommodation rental business;
- Place adverts on both print and electronic media platforms
- Maximize our company’s website to promote our business
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, LinkedIn, Google+ and other platforms (real estate online forums) to promote our business and list our properties for sale and for lease.
- Install our billboards in strategic locations in and around the university community in Cape Town
- Distribute our fliers and handbills in targeted areas from time to time
- Attend student association meetings with the aim of networking and introducing our business.
- Ensure that all our workers wear our branded shirts and all our vehicles are branded with our company’s logo
12. Our Pricing Strategy
Part of our business strategy is to ensure that we work within the budget of our potential clients to help them meet their expectations. It is the practice in most parts of the world for properties to be valued by professionals based on the area the facility is located, the type of facility and other factors.
Since we are not directly in control of the pricing system in the real estate industry, we can only abide by what is obtainable when it comes to fixing a price for our accommodations. But one thing is certain, we will ensure that we make available decent and secured accommodation when have we are contracted to do so.
Lastly, we will ensure that we keep our fees below the average market rate for all of our clients by keeping our overhead low. In addition, we will also offer special discounted rates to our clients from time to time especially when they recommend clients to us.
- Payment Options
At R. Oliver Tambo & Co® Real Estate Agency, LLP our payment policy is all inclusive because we are quite aware that different people prefer different payment options as it suits them but at the same time, we will not accept payment by cash because of the volume of cash that will be involved in most of our transactions.
Real estate deals usually involve huge amount of money. Here are the payment options that R. Oliver Tambo & Co® Real Estate Agency, LLP will make available to her clients;
- Payment by via bank transfer
- Payment via online bank transfer
- Payment via check
- Payment via bank draft
In view of the above, we have chosen banking platforms that will help us achieve our plans without any hitches and we will also pay our freelance sales agents with the same platforms. Our bank account numbers will be made available on our website and promotional materials.
Any agent who intends paying with cash will be directed to deposit the money into our corporate account and then present their payment tellers to us.
13. Startup Expenditure (Budget)
From our market survey and feasibility studies , we have been able to come up with a detailed budget on achieving our aim of establishing a standard student accommodation rental company in Cape Town – South Africa and here are the key areas where we will spend our start – up capital;
- The total fee for incorporating the business in South Africa – Name reservation application costs R50 and company registration R125
- The budget for permits and license – R1,000
- The cost for hiring Consultant – R2,500
- The cost for computer software apps (Accounting Software, Payroll Software, CRM Software, Microsoft Office, QuickBooks Pro, drug interaction software, Physician Desk Reference software) – R7,000
- The budget for insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – R5,400.
- Cost of payment of rent for a suitable office facility in Cape Town for 12 months at R1.76 per square feet in the total amount of – R65,600.
- The cost for office remodeling (construction of racks and shelves) – R7,000.
- The cost for equipping the office (computers, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – R15,000
- Other start-up expenses including stationery and phone and utility deposits ( R2,500 ).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – R30,000
- The cost of launching our official website – R600
- Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – R5,000
Going by the report from the market research and feasibility studies conducted, we will need over one hundred and fifty thousand ( R150,000 ) South African Rand to successfully set up a small scale but standard student accommodation rental company in Cape Town – South Africa.
Generating Startup Capital for R. Oliver Tambo & Co® Real Estate Agency, LLP
Oliver Tambo & Co® Real Estate Agency, LLP. is a business that will be owned and managed by Rowland Oliver Tambo, Sean Mbeki and Sarah Zuma. They are the sole financiers of the business which is why they decided to restrict the sourcing of the startup capital for the business to just three major sources.
These are the areas we intend generating our startup capital;
- Generate part of the startup capital from personal savings and sale of his stocks
- Generate part of the startup capital from friends and other extended family members
- Generate a larger chunk of the startup capital from the bank
N.B: We have been able to generate about R50,000 ( Personal savings R30,000 and soft loan from family members R20,000 ) and we are at the final stages of obtaining a loan facility of R100,000 from our bank. All the papers and documents have been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.
14. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all these factors are missing from a business, then it won’t be too long before the business closes shop.
One of our major goals of starting R. Oliver Tambo & Co® Real Estate Agency, LLP is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to rent out standard, and secured student accommodations a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.
Oliver Tambo & Co® Real Estate Agency, LLP will make sure that the right foundation, structures and processes are put in place to ensure that our staff are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.
We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
Check List/Milestone
- Business Name Availability Check: Completed
- Business Incorporation: Completed
- Opening of Corporate Bank Accounts in various banks in South Africa: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Renting of Office Facility and remodeling the facility in Cape Town – South Africa: Completed
- Conducting Feasibility Studies: Completed
- Generating capital from the CEO and Business Partners: Completed
- Applications for Loan from our Bankers: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Promotional Materials: Completed
- Recruitment of employees: In Progress
- Purchase of the needed furniture, office equipment, electronic appliances and facility facelift: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business (Business PR): In Progress
- Health and Safety and Fire Safety Arrangement: In Progress