How to Start a Small Hotel or Guesthouse Business

More and more people these days are leaving their city jobs, often changing countries and opening small tourist businesses such as a hotel. If you are currently sitting in an office and opening your hotel is a dream for you then be wary of any romantic ideas, running a small touristic hotel is fun, it is great but it is also hard work.

Steps

1.Capital/Finance - Small family run hotels are often purchased on the proceeds of a house sale topped up with a bank loan. Decide whether you really should do this, because you're going to have to pay the house loan as well as the loanfor the business. Unless you live on site.

2.Location - If you want to get into tourism then this should be one of the first things in your mind. The region needs to have something special for you and your clients. If it hasn't got something really special then you may not get a lot of clients.

3.Campsites - The inexperienced need to be careful here. There is a huge difference between owning a campsite and owning a field. The beguiling thing is that it looks like an easy start up because all you need is a field but it simply isn't so and competition can be fierce. If you have sea, rivers, lakes, mountains or similar at your disposal then you may find things run well but be wary of buying a campsite in a "nice" rural area which is non-descript.

4.Living Abroad - If you emigrate to a country with a different language or culture then be very wary of relying only on trade from your native country, this can be disastrous in a poor season. The name of the game is learn the language and fully integrate. In countries like France, 80 to 90 percent of your potential clients are domestic - you cannot afford to ignore this sector. If you do enter a new country or even just a new part of your own country then one quick way to be accepted is to use local suppliers for everything, nothing will ingratiate you more to the local community than your commitment to the local economy; you may often be accepted more readily as a business owner than a private individual for this very reason.

5.Business Type - B&B's, Gites and Guesthouses can be a very attractive option because you are not expected to be on duty 24 hours a day, even low star hotels are still expected to have desk staff on duty 12 hours a day. Be aware of the staffing implications of different business types. There is no right or wrong here but you should be thinking about whether you will need to hire anyone and how many hours a day you might be working in season. Check out local employment laws, seasonal workers are often protected by legislation which means you have to pay an additional sum towards their social security.

6.Seasons - Many hotels are seasonal, some have one season, some have two. One season can be nice if you can generate enough income, two seasons mean more months working, possibly more revenue and maybe more security. Once again there is no right or wrong but it is important to think through the issues and determine what suits you.

7.Local Economy - Some owners used to earn quite a lot of money when they worked in a city, but now they earn a fraction of what they used to. However, their pension may be good and they save more money a year now than they did before, this is because everything is cheaper and they don't need to spend money cheering themselves up after a bad week at work. It may take them a year or so to realise how much their needs depended on the society, the values and the economy they were surrounded by. Being able to walk in beautiful mountains with waterfalls and lakes has meant that they just don't use much money trying to amuse themselves - life is high quality and cheap. Your experiences could differ, you may be thinking of moving to a place where everything will be more expensive - it depends, so just be aware of this factor.

8.Guests - Well, now we come to the most important thing of all - the guests, these are the people you need to attract to your establishment and who, hopefully, will come back again. There are many ways to please guests, I can't advise you about 5 star hotels, but I can say something about small family run hotels etc. Its all about whether you genuinely like helping and pleasing people. In our hotel for instance we keep a few disco lights in the restaurant because we know that every so often, when we have large extended family groups that there may be an occasion where a little impromptu "family disco" with parents and children can absolutely make it for some families. This is just one tiny thing that we have done, there are 101 others but I always remember one little girl being asked what she liked about the holiday and she said "my birthday disco". This is what it is really all about - kids families laughter fun and smiles - if you like seeing people smile and like making it happen then you have a head start.

9.Are you practical? You may find yourself with up to five or six months a year with few or no clients. The cost of repair work or new works can be a large part of your outgoings - how much you can claw back into your profit margin depends on your practical skills. DIY bodgers will not do, you cannot have forty guests waiting for a hot shower whilst you fumble with a fitting, on the other hand if you can gain genuine competence then you can save a fortune.

10.Buy An Existing Business? - My advice if you have not run a touristic business before simply is yes, especially if you are moving to another country. Some people do pull off miracles but personally I would say buy your first business with clients, goodwill and all the infrastructure ready to go, then perhaps if you feel more adventurous at a later date you might consider selling and starting a new business from scratch.

11.Can you see what is under your nose are you intelligent? A lot of people will be surprised to find out that intelligence is a requirement of running a successful hotel or tourist business.It is very true that the day to day running of a hotel is not rocket science but there are two things you should always be thinking. The first is whether you can find ways to do what you are currently doing more efficiently, this is about ergonomics, work flows, work scheduling, investment in proper equipment and being able to constantly spot the inefficient parts of each task and being able to reason out a better method. The second is that you need to be able to see what is under your nose, most hotels see a flurry of improvement ( decor fittings facilities ) when a new owner takes over - this usually lasts for a few months and then nothing more happens until the next owner comes along. It is extraordinarily difficult when you live day in and day out with the same situation to be able to still see what needs improving to the benefit of your guests or yourself. A program of continual improvement takes a mind that can spot potential and opportunity as a matter of course.

Tips and Warnings

• ·  Check out the Small Business Administration (SBA). They have many free tools for those interested in launching their own hotel business.

• ·  Don't forget to write a business plan. These plans cover business essentials such as marketing, financing and daily operations of your hotel. There are free online templates on business plans (see Resources).

• ·   It is generally better to borrow as little money as possible, family-run tourist businesses aren't really expensive and the less you owe the better.

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