Venture Development Proposal: Airport Capsule Hotel

This venture development proposal discusses the concept of opening an airport capsule hotel at Heathrow Airport, providing affordable and luxurious accommodation services to low-cost and international passengers. The proposal includes a customer value proposition, lean business model canvas, financial analysis, and more.

Venture development proposal:
Airport Capsule Hotel

Table of Contents
INTRODUCTION...........................................................................................................................1
PART B...........................................................................................................................................1
Introduction..................................................................................................................................1
Customer value proposition.........................................................................................................2
Lean Business model canvas.......................................................................................................4
Specialist contribution.................................................................................................................7
Financial and financial plan.........................................................................................................8
Summary....................................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business planning can be defined as process of making plan before starting any new
business (Bursik, Jackson and Cyr, 2017). Lean start-up needs huge investment and without
having proper plan entrepreneur might can get to run business successfully in the market. Present
study is based on Capsule hotel. Entrepreneur is planning to open this hotel at Heathrow airport
where low cost and internal passengers both come. Business plan will explain the business
profile and will prepare canvas model of it. Furthermore, financial analyses will be done and
customer value proposition map will be prepared.
PART B
Introduction
Lean startups can be described as process of developing a business. It generally contains
such products that have shorten product development cycle. Most of the entrepreneurs work on
lean startup by using business hypotheses driven experimentation method (WYRED Consortium,
2018). The main concept of such kind of business is to invest in such projects that are able to
generate profit. Companies work on such kind of projects that are able to meet needs of
consumers so that market risk can be minimised.
Entrepreneur is planning to open Airport Capsule hotel which is going to be work on
busiest terminal of Heathrow Airport. The main idea in this business is that hotel will offer
accommodation services to all the passengers that come to airport. It will ensure offering
accessible boxes room to them alone with bathroom facilities. The price which will charged from
customers will be affordable hence all range of consumers can take interest in products and
services of this hotel (Kidambi, 2017). Capsule hotel will provide short term accommodation
facilities to the people those who are travelling through international connection flights and low
cost flights. As hotel is charging nominal cost from consumers hence people can get luxurious
facilities when flight is delay or late. They can get a comfortable place where they can take
proper rest and can enjoy their time easily. This hotel will be placed at Heathrow terminal 3 at
ground level (Rimm, 2016).
Entrepreneur is planning to generate more profit by investing capital in right direction.
As there are many hotels available but all they are very costly because many international
travellers come to the Heathrow Airport, they want luxurious services and they do not really take
care about cost. If they are getting satisfactory services, then they are ready to pay high cost for
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the same. But the concept of offering affordable launches and accommodations facilities to the
travellers will attract more consumers hence profitability of company can be raised in significant
manner in next three years (Cant, 2016).
Profit margin of company for next three years of operations
Particulars year 1 Year 2 year 3
Cash inflows
Opening cash inflow 300000 345000 396750
Sales revenue 150000 170000 185000
Other income 40000 50000 60000
Total cash inflows 490000 565000 641750
Cash outflows
Material 100000 70000 120000
Labour 150000 165000 180000
Other expenses 30000 32000 35000
Administration
expenses 65000 65000 65000
Total cash outflows 345000 332000 400000
cash balance 145000 233000 241750
Customer value proposition
Customer value proposition is the tool that describes the value which is being provided to
consumers by business. This is very important for Capsule hotel to ensure needs of consumers
and offer them products that can satisfy needs of buyers to great extent. Each company wants to
serve its consumers well, it always wants to meet expectation of buyers so that they feel happy
and retain in business for longer duration. If companies fail to serve them well then it may create
problem for firm only (Antunes, 2016). Capsule hotel is going to provide luxurious services to its
potential buyers hence company always ensures that target users always feel happy after
experiencing products of hotel. The main target customer of Capsule hotel are travellers those
who use low cost or international flights frequently.
Customer value proposition has two major elements: customer profile and value
proposition.
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Customer profile
 Gains: This is the benefit that always prefer by target consumers, if people are getting
satisfactory accommodation facilities in Capsule hotel then their likelihood of buying
such services will be increased. Hence enterprise is planning to take care of this element
so that people can get great valuable products against their paid money (Anastas and
et.al., 2017).
 Pain: Capsule hotel will always take care of negative experiences of potential buyer, if
any person has any quarry related to products and services then there is requirement to
resolve that problem as soon as possible so that such issues do not affect performance of
business unit. Capsule hotel will take care of emotions of all passengers and will allot
them work by considering their needs and budget (Middleton, 2017).
 Customer job: this is another important part of customer profile; company will ensure
that emotional task related to buyers get completed within stipulated period of time so
that no complications take place.
Figure 1: Value proposition
(Source: What is the Value Proposition Canvas, 2019)
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Value map
This is another important aspect of business unit that always pay attention on providing
values to customers.
 Gain creators: this is the element that ensures that products and services of Capsule hotel
create gain for customers and people feel it valuable (Enriquez, 2017).
 Pain relievers: This is the aspect that ensures that pain of buyers can be resolved on time.
 Product and services: Capsule hotel will ensure that which kind of products are like by
people and which does not, hence there should be clear description of products so that it
always create gain for the target people and resolve pain issues.
Capsule hotel will work hard to keep its consumers satisfied hence it will continuously
identify need of consumers and will ensure that people get best accommodation facilities in this
hotel. This will be helpful in managing the work in significant manner and getting positive
results in business unit (Silva, 2017).
Lean Business model canvas
This is the ,model or process that help entrepreneur to design outline of its business plan
and communicate this idea to all stakeholder in significant manner so that they take interest in
this business (Saito, 2018). This is the tool that is entrepreneur focused. It majorly concentrates
on risk associated with the firm and scope of this business idea. By preparing canvas model
enterprise can get to know about future of this firm and can take necessary action on time to
minimise the loss.
Key
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 Su
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 Co
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 Goo
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 Safe
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Key
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 H
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 So
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Channels
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 Tra
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 Out
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Capsule hotel has made the great planning so that it can gain attention of its target audience.
Company has planned to offer satisfactory services to its consumers so that they feel great and
come again to experience this services. Prices is the major benefit which is going to be provided
by Capsule hotel (Gordon, 2016). As firm is planning to offer low cost services to its all guests.
Whenever travellers come to buy accommodation facilities of Capsule hotel then firm will offer
them luxurious services but will charge minimum amount for the same. Hence travellers can
enjoy their time till their next flight.
Key partners of Capsule hotel will be its suppliers those who will provide the firm
laundry, stationary etc. . Apart from this, airline companies and tour operators will be important
key partner of Capsule hotel, tour operator will suggest travellers about this hotel so that they can
buy this service as well (Bursik, Jackson and Cyr, 2017). In addition, airline companies also will
suggest passengers about Capsule hotel so that at the time of delay in flight people can enjoy
their time here. This will help Capsule hotel in raising sales to great extent and managing its cost
as well.
Capsule hotel will provide computer, WIFI facilities to its all guests, this will help in
making them positive towards the brand. Many business class people travel regularly and while
traveling they need computer kind of facilities. By offering them this facility entity would be
able to attract more people, as travers will prefer to go to such place where they can get such
computer items so that they can complete their work while travelling (Kidambi, 2017).
Value proposition of v Capsule hotel will be its cheaper products. As there are many
other hotels at Heathrow airport but they are charring high cost from consumers. Plan of offering
low cost products will create value for consumers and they will defiantly try to experience such
cheaper but luxurious products. Another value proposition of this hotel would be its safety and
immediate facilities. As staff of Capsule hotel will ensure that all passengers those who are
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coming her get safer environment. There would be facilities of camera and security guard. Hence
they can keep their important documents and other items safely. In addition, employees of
Capsule hotel will response to their consumers immediately, whenever customer ask for any
quarry it will be resolved as soon as possible (Cant, 2016). This value proposition will influence
mind of consumers and they will suggest others to experience services of Capsule hotel.
Customer relationship will be built by using social networking sites, Capsule hotel will
coordinate with its target consumers through Facebook, Twitter, YouTube etc. Company will
promote this hotel on Youtube. Each consumers will get all the relevant information about hotel
on its fakebook, Twitter pages. This will help in making immediate connection with them and
knowing more about their needs (Antunes, 2016). Social media is the cost effective platform that
help companies in making connection with mass audience and spreading the news of firm across
the world. Company will not have to spend too much amount for using social platforms.
Facebook, Twitter etc. applications are used by large number of people now a days, if firm
promotes its brand through this platform then it would be able to make connection with large
audience which will help generating more profit in organisation (Anastas and et.al., 2017).
Customer segment of Capsule hotel are low cost passengers and international travellers.
As Heathrow airport is the place where many passengers come on regularly. Many low cost
airlines and international airlines are here. Many foreigner travellers come to this place , they
want luxurious facilities because they do not compromise with quality. Capsule hotel will full fill
this need and they can get best accommodation facilities here. Apart from this, low cost
passengers need facilities at affordable prices, this requirement will also fulfil by Capsule hotel,
as products of Capsule hotel are available at affordable rates. Hence this target consumers will
support the firm in generating sales and meeting the objective of high profit (Enriquez, 2017).
It will use its website as channel to promote the brand, consumers will be able to book
their tickets through its website. Apart from this, they can get information about Capsule hotel
through airline companies as well. these channels are easy to make interaction with potential
buyers.
Key resources of the firm will be its human capital, as staff are experienced and they will
be devoted towards consumers. Hence employees will serve them best and will work hard to
raising brand image of Capsule hotel to great extent (Bursik, Jackson and Cyr, 2017). Capsule
hotel will generate revenues through selling its products and services to all range of consumers.
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Apart from this, it will advertise its hotel and will earn through it. In addition to this, commission
will be other source of income for Capsule hotel. All these revenue streams will support the firm
in meeting its target (WYRED Consortium, 2018).
But to do well in the market, it will have to spend amount in certain thing such as there
will be investment on employees. As company will have to hire skilled and experienced people.
Apart from this, renovation will another expenses of firm. It will spend money in maintenance as
well. All these cost will be managed in systematic manner so that Capsule hotel can generate
profit and can gain competitive advantage as well (Kidambi, 2017).
Specialist contribution
This is very important for Capsule hotel to involve specialist while making business plan,
they are expert of their field hence they can give best advice through which firm can generate
profit in stipulated period of time.
 Chief executive officer (CEO): he is the person who will supervise all the activities of
business plan, if any kind of issues is taking place then CEO will take immediate action
so that no complications take place in the future (Rimm, 2016).
 Chief marketing officer(CMO): Individual is the person who have great knowledge of
market, hence individual can understand more about market demand and needs of
consumers. CMO can guide the entrepreneur about price setting and specify products that
can gain attention of target consumers. If CMO is not there then entrepreneur can face
issues in understanding the actual demand of different type of consumers which may
affect future profit of the organisation to great extent. CMO helps in understanding
competitor’s strategy and taking appropriate action to gain competitive advantage in this
market (Antunes, 2016).
 Chief production and development manager: he is the person who is responsible for
providing all input which are necessary for business plan. Individual guides the owner
about lead time in which new product must be developed, machinery requirements,
material needs of the firm. If this person gives expert advice to business then it would be
beneficial in producing best quality products that can help in satisfying consumers in
significant manner (Middleton, 2017).
 Financial manager: This is another important person in business which, contribution of
financial manager is great (Enriquez, 2017). Individual analyses the fund management
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activities of firm. It helps in analysing financial requirement of Capsule hotel and
investment needs. By this way firm can be able to manage its cost well and generating
more profit to the business. Financial manager helps in making connection with financial
institutes so that enterprise can get sufficient amount to invest in this business plan.
Financial and financial plan
Start-up expenses
Legal 120000
Kitchen inventory 60000
Insurance 15000
Rent 20000
Promotion 25000
Other equipment expenses 30000
Permits 15000
Supplier cost 60000
Total cost 345000
It is projected that hotel will have to spend huge capital in various things. One of the
major investment will be in legal process, as enterprise will have to take permission from
government to open hotel at airport. Insurance will need 15000 investment. Hotel will have to
spend in promotional activities. If there is improper promotion then it will not be able to enhance
awareness among passengers hence it will require 25000 investment. Overall expenses will be
345000.
Start-up assets
Cash requirement 100000
Start-up inventory 150000
Current assets 20000
Long term assets 50000
total 320000
Total investments= 345000+320000=665000
Project cash flow
Particulars year 1 Year 2 year 3
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Cash inflows
Opening cash inflow 300000 345000 396750
Sales revenue 150000 170000 185000
Other income 40000 50000 60000
Total cash inflows 490000 565000 641750
Cash outflows
Material 100000 70000 120000
Labour 150000 165000 180000
Other expenses 30000 32000 35000
Administration
expenses 65000 65000 65000
Total cash outflows 345000 332000 400000
cash balance 145000 233000 241750
Project income statement
Year 1 Year 2 Year 3
Revenues
Sales 90000 100000 120000
Direct cost of sales 30000 35000 40000
Other 15000 18000 20000
Total revenue 135000 153000 180000
Expenses
Payroll 23600 30000 32000
Depreciation 0 0 0
Legal fees 2000 2000 2000
Licences and permits 900 1000 1100
Suppliers cost 2500 2500 4800
Insurance 15000 15000 18000
Rent 36000 36000 36000
Total expenses 80000 86500 93900
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Net profit 55000 66500 86100
Company can get funds from banks, as there are many financial institutes those who
provide capital to the entrepreneurs. But for that it is essential to have great business plan alone
with projected cash flow. This would be beneficial in making banks aware with the worth of this
business plan. By this way bank will provide sufficient amount pf fund to invest in this hotel
(Bursik, Jackson and Cyr, 2017).
Company will use finance in proper manner, there will be close monitoring of all
expenses, if there are some wastage then it will be eliminated soon so that enterprise can
generate revenues timely and can sustain in market for longer duration (WYRED Consortium,
2018).
Summary
Hence investment in this Capsule hotel would be profitable for the entrepreneur as it
would be able to get reasonable amount of profit from its first year as well. Entrepreneur will get
opportunity to become the great firm in hospitality industry which is able to fulfil needs of both
low cost and international passengers (Cant, 2016). By working on this project person will be
able to become market leader in the hotel sector because opening Capsule hotel at Heathrow will
be a profitable decision for entrepreneur.
CONCLUSION
Study can be concluded as business planning is essential for any entrepreneur, before
entering into market or before investing huge capital there is requirement to make proper
business plan so that risk and opportunities can be determined in proper manner. In the absence
of it company may get failed to take right action through which it can generate profit. There
should be proper analyses of cost and benefit, this will help in knowing the viability of business .
After that entrepreneur can invest capital into it and can gain success in the market.
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REFERENCES
Books and Journals
Anastas, R. and et.al., 2017. Business Plan.
Antunes, A. L. O., 2016. Innovative business plan: a new hamburguer concept (Doctoral
dissertation).
Bursik, N., Jackson, T. and Cyr, A. K., 2017. PAWS'itive PALS Strategic Business
Plan (Doctoral dissertation, The College of St. Scholastica).
Cant, M. C., 2016. Entrants and Winners of a Business Plan Competition: Does Marketing
Media Play a Role in Success?. Journal of Entrepreneurship Education, 19(2), p.98.
Enriquez, A., 2017. MyMark: A Mobile App Business Plan Proposal. California State University,
Long Beach.
Gordon, J.M., 2016. A Business Plan for the Growth-Based Venture.
Kidambi, S., 2017. WeCare Home Healthcare Support Services Business Plan. California State
University, Long Beach.
Middleton, S., 2017. INPATIENT HOSPICE HOME: A NEEDS ASSESSMENT AND
BUSINESS PLAN.
Rimm, A., 2016. Joy of Strategy: A Business Plan for Life. Routledge.
Saito, Y., 2018. Business plan template for café solopreneurs.
Silva, M., 2017. Book4paws business plan (Doctoral dissertation).
WYRED Consortium, 2018. WYRED Association Business Plan. WP8_D8. 4. Version 2.1.
Grupo GRIAL.
Online
What is the Value Proposition Canvas. 2019. [Online]. Available through <
https://www.b2binternational.com/research/methods/faq/what-is-the-value-proposition-
canvas/ >
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