Benjamin Franklin said “failing to prepare is preparing to fail”. This could not be any truer than when starting a hospitality business. In the past decade, we have seen the industry continuously grow to become one of the more preferred industries for small business owners. It is continuously evolving on both the technological and customer front and the year 2019 promises continued growth on the hospitality front. Increased competition and fluid changes have meant that those getting into the hospitality business should be armed with a few basic essentials to ensure a great start to their venture into the hospitality arena. From recruiting employees with the right skills to getting your numbers rights, here are a few tips to get you going.
Nail Down Your Demographic
Before launching any business, market research is a key part of your preparations. The hospitality sector is all about people; the customers, their wants and what they are willing to pay for the service. So, before anything else, find out what your target market is. It is the founding stone for much of your other business functions. From your target market, you can determine your approach to marketing, your amenities offered and even your after sales service.
Get Familiar with The Numbers
In order to define and measure success in your business operations, you must have a grasp of the numbers in your business. Approximately 82 percent of small businesses fail due to poor cash flow management skills. So knowing the basics behind the numbers can secure your success. This includes profit, turnover, tax implications and of course, interest rates. Having some knowledge of your financing options allows you to be aware of the terms of your financing agreement. Nail down your monetary requirements starting from initial capital outlay to recurring overheads. In a hospitality-oriented startup, it is advisable to budget for higher staff and property maintenance costs. Restaurants and hotels see high daily footfall which means making a good physical impression is a priority. This means regularly restoring your service premises to a pristine condition from the kitchen and serving area to the floor and ceilings.
Being comfortable with your financial accounts as a small business owner is a must. Most small business owners will attest that they often wear many hats in the business from marketer to accountant. A financial plan also allows for provisions if needed. Having in fail-safes in place to mitigate the financial consequences of not meeting predetermined targets, can mean the difference between weathering a bad season or exiting the market altogether.
Focus on The Faces
As a people-oriented industry, it makes sense that one of the first things you should have onboard is a people plan. In a people-oriented role, employees and their skills are paramount to a satisfied customer. Defining the traits and qualities you are looking for in employees is the first step to getting this started. Training and human resource development plans should be derived at the beginning to ensure continuous development of the talent in the business.
Don’t forget to include a customer service plan. Hospitality businesses revolve around brilliant customer service. Reactions to situations such as a dissatisfied customer should also be included. Feedback and word of mouth of your customers can either be the propellers or immobilizers of a small business. Therefore, it is important to address not only the perfect service the first time but also your business’ response to complaints and its plan to convert dissatisfaction to loyalty. Returning customers spend up to 67 percent more than first-time customers and drive around 80 percent of your revenue. Customer loyalty will play a significant part in keeping your business running for years to come
