Individual Business Plan for Short-Term Renting of Houses and Apartments

Individual Business
Plan

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Business idea summary................................................................................................................1
Analysis of risk that business will be facing...............................................................................2
Source of initial funding for business..........................................................................................2
Outline and discuss key fixed and variable costs........................................................................3
Profit forecast...............................................................................................................................3
Budgeted cash flow......................................................................................................................4
Breakeven point and MOS...........................................................................................................4
Key performance indicators (KPIs) to monitor progress towards business goals.......................6
Recommendations based on the results.......................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business plan can be defined as a written document that helps in explaining main
business aim, objectives and plan though which those objectives can be achieved (Ferreras-
Garcia, Hernández-Lara and Serradell-López, 2019). Development of business plan directly help
in management of finances of business, helps in achievement of desired goals and objectives in
an appropriate manner. It is extremely important to develop business plan for launching a new
business or for expansion of existing business for management of business finance, activities,
operations etc. This report will lay emphasis upon summary of business idea, risk associated with
business, funding of business, key fixed and variable costs, budgeted profit forecast for the first
year of operation, budgeted cash flow for the first year of operation, break- even point and
margin of safety, Key performance indicators (KPIs) for monitoring process towards business
goals. This report will focus upon a business idea of short- term renting of houses and
apartments.
MAIN BODY
Business idea summary
Business idea chosen for is from hospitality industry and is of short- term house renting
where customers will be able to rent houses as per the places they want to rent. Not only this,
provision of shipment containers for developing a place to rent will also be provided as a service.
Business owner already has family houses or apartments ready to be rented and want to use it as
an opportunity for developing business in this sector. Due to this requirement of building houses
will not be required. Initially all the family members would be working for providing services to
customers such as provision of house or apartments on rent, provision of breakfast and other kind
of services. This is because cost of building and decorating houses can be minimized and with
the help of short- term renting. Business owner will be running the business as a sole trader but
for future expansion might operate as partners for business expansion. This business will be
based in UK and main customers will be people who want to rent a place for short term.
Competition in this in industry is high as there are already existing competitors providing similar
services such as showhop is one of the already existing competitors who provide climatic places
for rent.
1

Analysis of risk that business will be facing
There are many different kinds of risk that are associated with the business that can work
as a barrier in expansion and suitability of business in the market in which they operate. Some of
the main type of risk associated with this short- term house renting business plan are as follows:
 Compliance risk: Exposure to legal penalties, legislation and failing to act in accordance
with legislation in this industry is one of the main types of risk associated with this
business (Broekhuizen, Bakker and Postma, 2018). Privacy breach is one of the main
types of risk associated with this business because in order to monitor safety and security
of customers and property cameras will be installed. Due to this breach in privacy of
customers issue can arise. In order to provide high quality service to customers
environmental law breaching issue can arise such as distribution of natural habitat for
expansion of business etc.
 Competitive risk: Current competition in this industry is one of the main types of risk
associated with this business (Akaeze and Akaeze, 2020). This is because, in order to
sustain and gain competitive advantage it is extremely important for business to cost and
quality of products and services provided by them as per current competition in the
market because quality and costing is not according to the competitors then it can make it
a bit difficult for business to sustain within the market.
Source of initial funding for business
There are three main sources of funding business that can be focused upon for stating this
new venture successfully:
 Self-financing or family financing: As there is already available family houses or apartments
ready to be rented so for stating this business either personal investment will be done or loan
from family such as from parents, grandparents will be asked for (Atarah and et. al., 2021). It
is one of the most appropriate source of funding business through which initial funding for
business can be obtained.
 Bank loan: Loan from bank is second priority source of initial funding of business because it
is one of the most reliable and safe source of funding business (Obeid and et. al., 2017).
Almost every private and public bank offer loan to business or start-ups but interest rate, loan
amount, repayment tenure different from bank to bank due to which selection of appropriate
bank for loan will be identified.
2

Individual Business
Plan

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Business idea summary................................................................................................................1
Analysis of risk that business will be facing...............................................................................2
Source of initial funding for business..........................................................................................2
Outline and discuss key fixed and variable costs........................................................................3
Profit forecast...............................................................................................................................3
Budgeted cash flow......................................................................................................................4
Breakeven point and MOS...........................................................................................................4
Key performance indicators (KPIs) to monitor progress towards business goals.......................6
Recommendations based on the results.......................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business plan can be defined as a written document that helps in explaining main
business aim, objectives and plan though which those objectives can be achieved (Ferreras-
Garcia, Hernández-Lara and Serradell-López, 2019). Development of business plan directly help
in management of finances of business, helps in achievement of desired goals and objectives in
an appropriate manner. It is extremely important to develop business plan for launching a new
business or for expansion of existing business for management of business finance, activities,
operations etc. This report will lay emphasis upon summary of business idea, risk associated with
business, funding of business, key fixed and variable costs, budgeted profit forecast for the first
year of operation, budgeted cash flow for the first year of operation, break- even point and
margin of safety, Key performance indicators (KPIs) for monitoring process towards business
goals. This report will focus upon a business idea of short- term renting of houses and
apartments.
MAIN BODY
Business idea summary
Business idea chosen for is from hospitality industry and is of short- term house renting
where customers will be able to rent houses as per the places they want to rent. Not only this,
provision of shipment containers for developing a place to rent will also be provided as a service.
Business owner already has family houses or apartments ready to be rented and want to use it as
an opportunity for developing business in this sector. Due to this requirement of building houses
will not be required. Initially all the family members would be working for providing services to
customers such as provision of house or apartments on rent, provision of breakfast and other kind
of services. This is because cost of building and decorating houses can be minimized and with
the help of short- term renting. Business owner will be running the business as a sole trader but
for future expansion might operate as partners for business expansion. This business will be
based in UK and main customers will be people who want to rent a place for short term.
Competition in this in industry is high as there are already existing competitors providing similar
services such as showhop is one of the already existing competitors who provide climatic places
for rent.
1

Analysis of risk that business will be facing
There are many different kinds of risk that are associated with the business that can work
as a barrier in expansion and suitability of business in the market in which they operate. Some of
the main type of risk associated with this short- term house renting business plan are as follows:
 Compliance risk: Exposure to legal penalties, legislation and failing to act in accordance
with legislation in this industry is one of the main types of risk associated with this
business (Broekhuizen, Bakker and Postma, 2018). Privacy breach is one of the main
types of risk associated with this business because in order to monitor safety and security
of customers and property cameras will be installed. Due to this breach in privacy of
customers issue can arise. In order to provide high quality service to customers
environmental law breaching issue can arise such as distribution of natural habitat for
expansion of business etc.
 Competitive risk: Current competition in this industry is one of the main types of risk
associated with this business (Akaeze and Akaeze, 2020). This is because, in order to
sustain and gain competitive advantage it is extremely important for business to cost and
quality of products and services provided by them as per current competition in the
market because quality and costing is not according to the competitors then it can make it
a bit difficult for business to sustain within the market.
Source of initial funding for business
There are three main sources of funding business that can be focused upon for stating this
new venture successfully:
 Self-financing or family financing: As there is already available family houses or apartments
ready to be rented so for stating this business either personal investment will be done or loan
from family such as from parents, grandparents will be asked for (Atarah and et. al., 2021). It
is one of the most appropriate source of funding business through which initial funding for
business can be obtained.
 Bank loan: Loan from bank is second priority source of initial funding of business because it
is one of the most reliable and safe source of funding business (Obeid and et. al., 2017).
Almost every private and public bank offer loan to business or start-ups but interest rate, loan
amount, repayment tenure different from bank to bank due to which selection of appropriate
bank for loan will be identified.
2