Entrepreneurial Skills and Business Plan for Travel and Tourism

This report delves into the realm of travel and tourism entrepreneurship, outlining the essential skills required for success, such as managerial, communication, and analytical abilities. It includes a self-appraisal of the author's entrepreneurial traits and skills, highlighting strengths and areas for improvement. Furthermore, the report examines the business development strategies of Thomas Cook, a prominent figure in the UK travel industry, analyzing his entrepreneurial process and contributions to the sector. A detailed business plan for a new travel agency in London is presented, covering financial sources, product/service concepts, and business objectives, including financial projections, customer acquisition strategies, and expansion plans. The report also explores various funding options, both internal and external, to support the proposed business venture, providing a comprehensive overview of the key elements for launching and sustaining a successful travel and tourism enterprise.

Travel and Tourism Entrepreneur
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Own skill needed to became a successful entrepreneur
for starting-up business in the travel and tourism sector............................................................3
1.2 My Self-appraisal in terms of
entrepreneurial traits and skills...................................................................................................5
TASK 2............................................................................................................................................7
2.1 Successful travel and tourism entrepreneur of Thomas cook and his business
development strategy..................................................................................................................7
2.2 The entrepreneurial process adopted by the chosen entrepreneur and
evaluate the success of entrepreneur’s business.........................................................................7
TASK 3............................................................................................................................................8
3.1 Sources of funds for proposed travel and tourism
business.......................................................................................................................................8
3.2 Specific product/service concept
and justify its potential for success.............................................................................................9
3.3 Business plan.......................................................................................................................10
CONCLUSION .............................................................................................................................12
REFERENCES .............................................................................................................................14
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INTRODUCTION
The success of an entrepreneur depends upon skills and competences of an individual
working in the specific field. Tourism and travel industry is the leading sector of an economy
however an individual must possess specific skills so as to become the leading entrepreneur of
Travel & Tourism Industry (Fullen and Brown, 2004). This report is going to deal with skills of
an individual to become a successful entrepreneur for starting-up business in the travel and
tourism sector. Further, the report discusses about a successful travel and tourism entrepreneur of
United Kingdom along with the success of entrepreneur’s business. A business plan for starting
up a new business in travel and tourism field is designed in the following sections. This report is
going to represent the available sources of funds for a newly proposed travel and tourism
business well as the Specific product/service concept with potential success factors.
TASK 1
1.1 Own skill needed to became a successful entrepreneur for starting-up business in the travel
and tourism sector
Starting a business is not an easier task however; entrepreneur is required to have number
of skills to successfully commence a new business within travel and tourism sector. However,
the important thing is to develop an idea for generating a profitable business. The business
developed by new entrepreneur should contribute in the growth and development of travel and
tourism sector economy (Hair and et.al., 2015). Being a post graduate form MBA, I have chosen
travel and tourism management business therefore; I have good knowledge in respect with this
field. Now, I am looking for opening my own travel agency with the aim of providing various
kinds of travel and tourism products and related services to the customers of London. For
becoming a successful entrepreneur, I require to have some skills that will be helpful in business
development in the selected industry.
The required skills are shown in the following points:
Managerial and Leadership skill: To successfully start-up a business and to run such
business in the most effective manner I require effective leadership skills. As I am going to
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become an entrepreneur and probably I will have to handle a team therefore, I require good
leadership and managerial skills.
Communication skills: Communication skills are must to make an effective
communication with internal and external customers of the business. Having sound
communication skills, I can attract customer towards products and can make my team understand
the vision and mission of my new business and all this will be effective in attaining
organizational success (Spenceley, 2012)
Planning and organizing skills: The major role of a travel operator is to design and plan
the best trips for the customers and my responsibility will be managing business affairs. Hence, I
am required ti have good planning and organizing skills.
Time management skills: Time management skills are required that will help me in
completing my activities and task on time and meeting the expectation of my clients.
Decision making skills: For being a successful entrepreneur, it is required to have
perfect skills of taking best alternatives among various decisions. These skills will support me in
success of my new business (Hollick and Braun, 2005).
Research and analytical skills: Before starting a new business, it is required to conduct
a proper market research for available competitors as well as to grab business opportunities.
Knowledge pertaining to Travel and tourism field: I should have knowledge in regard
to travel and tourism industry as well as the regular updates of the market. For being successful
in existing business, I am required to continue research in the field so that I can be aware with
the demand of market and then deliver services according to the same (Ateljevic and Page,
2009).
However, for commencing a successful business in such field, I should have traits related
to the new business. First of all, I have to become risk taker as a new business comes with a huge
risk of becoming losses. The UK travel industry is too competitive and there are various small
and big travellers in London that pushes me for being risk taker for succeeding in the business.
On the other hand, it is not easier to start up a new business and I am going to face many issues
in the initial level of business. In this situation, I have to become a motivator for my team and
support them to face the risk and challenges faced during initial stages. I am also required to give
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time and efforts for running a successful business. I must put hard-work in the news business and
should become ambitious for my work (Kotler, Bowen and Makens, 2003).
1.2 My Self-appraisal in terms of entrepreneurial traits and skills
I am going to open a travel agency and to successfully commence the business I require
to have good stuff of skills that I explained in the above points. However, I am having many of
skills and some of them are to be improved for having the best results. In the particular section, I
am going to analyze my skills in terms of being a successful entrepreneur. In this respect, I have
rated my existing level of skills:
Skill Analysis
Skills required Rank/Rating (Between 1 to 10)
Managerial and Leadership skill 8
Communication skills 9
Planning and organizing skills 7
Time management skills 6
Decision making skills 9
Research and analytical skills 8
Knowledge pertaining to Travel and tourism
field
10
From My skills assessment, it was identified that I possess knowledge in relation to
Travel and tourism field and I am good at communicating and decision making skills. In addition
I found that I have to improve my planning and organizing skills and should put efforts for
acquiring research and analytical skills.
Trait Analysis
Skills required Rank/Rating (Between 1 to 10)
Risk taking 7
Motivator 9
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Ambitious 10
Hard -worker 10
From my trait analysis, I have found that I am lacking behind in taking risk in respect
with new business, it is because, this is my first business and I have to prepare myself. However,
from, I found that I am a Hard -worker and ambitions for my new business and its success. I can
also motivate my team for hard working to attain the goals of new business.
The following table represents my core strengths and weaknesses in respect with being an
entrepreneur.
Strengths
 My sound knowledge in respect with
the travel and tourism field is my core
strength
 I possess good leadership and
managerial skills and I am a good
communicator so I can easily manage
and lead my team
 Being a MBA students, I have practical
acted for a business entrepreneurs in
which I proved to be good motivator
for my team that surly will help me in
attaining success
 My academic knowledge in the
management of tour and travel business
is also a my biggest strength
Weakness
 I am lacking behind in good analytical
skills as well as time management skills
that could be a weakness for my new
business.
 I do not have practical knowledge and
experience in travel business that might
be a weakness of my new business
 Existing competition and the absence of
negotiation power can be a weakness
for my new business.
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TASK 2
2.1 Successful travel and tourism entrepreneur of Thomas cook and his business development
strategy
Thomas Cook is the UK based leading travel and tourism operator who has successfully
captured the market share. Thomas Cook is the founder of business who has a long success story.
. At the age of three years his father died. When he was of 10 Years, he worked in local market
gardener as an assistant and he has also provided services as a cabinet maker. From the initial
days, he was a hard-worker and ambitions for success. The man has always promoted education
and put efforts for improving the lives of people (Garrod, B2005).
Thomas Cook has been once walking alongside Leicester and he has an idea in his mind
of merging the power of locomotion and railways so as to create social reform. He came up with
the business Idea of arranging a special train to carry supporters of Leicester to Loughborough in
a meeting. The people sitting in the meeting have supported his business idea hence, the train
was arranged. This was the first stage of Thomas ways to success after which he has not looked
back. In the year 1845, he has started a commercial venture and he has arranged a trip to
Liverpool (Thomas cook. 2015).
2.2 The entrepreneurial process adopted by the chosen entrepreneur and evaluate the success of
entrepreneur’s business
The efforts made by Thomas cook for the success of his business were tremendous. He
has all required skills to become a successful entrepreneur. After commencing 10 years of
establishment, Thomas Cook Company was seen growing and it expanded its business in Britain
with a good speed. The owner was witnessed for increasing its operation in Europe. This became
a major reason for the success to the company and entrepreneurs. In 1888, Thomas tried to grab
this opportunities of international exhibition which was held in Pairs by trying to convince
companies for allowing him concessions. However, the option was rejected by companies and
Thomas remained with a single route between Antewerp and Harwich (Thomas cook, 2015).
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Thomas Cook has sponsored London 2012 Olympic Games. As being a UK's biggest holiday
package provider.
TASK 3
Goal and objectives of new travel and tourism business
My goal is to start up a travel agency in London that will serve the need regarding travel
business of Customers within the region. My individual goal is to become a leading travel agent
with in London region. The core objectives of my business are:
 To render world class services to the customers
 To offer reasonable trips and holiday packages as well as related services to the
customers
 To attain 20% of profitability in the 1st year of business commencement
 To provide a high degree of customer satisfaction and gain customers loyalty
 To attain annual growth rate of 10%
 To start-up online services within 3 years of opening physical store
 To secure a customer base of 800 people in the first year of my business
 To expand my operations in the part of Europe and Asia within next 2 months
3.1 Sources of funds for proposed travel and tourism business
Financial sources are required so as to start-up a new business in the London as well as to
successfully commence the business. However, I can acquire finance from internal and external
sources, the following points represents various sources available for getting funds for new travel
business.
Personal capital: The best internal source of finance from getting fund for the new
business is personal or owner's capital (Abrams, 2003). The saving of owner can be used to fund
the business that will be less costly source; However, I can also borrow funds from my friends
and family members. The major advantage of such sources is that I do not have to anyone and do
not have to pay interest however; the risk of losing money is also there in the business.
Loan from financial institutions: For rising sufficient for the business, I can take loans
from financial institutions of United Kingdom. However, this will be easier sources to get funds
against secured assets from banks. However, I have to pay interest against the amount used for
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the purpose of raising funds. The interest can be paid at fixed or floating rates. In addition, I have
to repay the amount after a certain period of time. This will be the easiest and safer way to get
funds.
Venture capitals- Venture capital can also be a source to rise for the business operations
(Gergen and Vanourek, 2011). There are number of venture capital firms who can invest in the
new business idea, I can take help of them. These companies provide funds for innovative
business idea.
For, the respective business plan I decided to use two major sources of finance such as
bank long and my own savings as both the sources will be the best and cost effective sources to
start-up may new business.
3.2 Specific product/service concept and justify its potential for success
From my Business plan, I have decided to open a new travel agency in London in which I
am going to provide range of travel services and products to the customers. My business services
will include booking of air tickets, railway tickets and the tickets will be considered as a product
of my business. Furthermore, the services include arrangements of tours including domestic and
international for which the reasonable tours package will be designed. However, initially I am
going to provide services over physical store but will start an online offering within 3 months of
business. I will promote my products and services over online sites by using social media sites. I
will open up an online website and will provide online services to my customers. The
advertisement will be conducted using internet, newspapers and Television etc. for providing the
best services to the customers and to satisfy the needs of people, I am going to tie up with hotels,
agencies, and food providers so proper arrangements for food, accommodation and
transportation facilities can be done. The unique concept of my business is that the people can
have option over the websites “make your own tour” in which the customers can plan their tours
as per their budgets. This unique feature will assist business in getting competitive advantages.
For seeking the products and travel services, my business is going to target students, business
class people and people who love travelling. This business includes the potential for success as I
have observed that travellers in United Kingdom have increased from 2 million to 3.48 million in
the year 2014. There have been seen huge opportunities for growth and development in the travel
and tourism sector in UK. In the recent previous year, approx 73% growth is evident in online
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booking of tours that is a positive sign for potential success of business (UK TOURISM
STATISTICS, 2015).
3.3 Business plan
Description of niche travel and tourism business concept
As per my idea of new travel agency, I am going to open a travel agency that will offer
services and products related to travel and tourism. The chosen target population is UK’s
customers including students, business class people and people who love travelling. The services
are going to be fast accurate and of high quality.
Product/service characteristics
The major services include ticket bookings and arrangements of tours, room
accommodation, transportation and other facilities will be provided. The services will be
provided over online site (after 3 months) and physical stores (Spenceley, 2012).
Market potential and business analysis
From the secondary, investigation, it has been identified that travel and tourism market of
UK is very potential and contributes around 9% in country's GDP. The total revenues earned by
UK travel industry were £125.7bn in 2013. In addition, UK is the eight largest international
tourism destinations (UK TOURISM STATISTICS, 2015). As per 2014, potential average spend
per visit is £624 and total of international student are going to be increased to £25bn by 2020.
Operational plan: The first stage of operational plan is to identify needs and wants of
customers in regard to destination, food choices, accommodations, budget and so on.
 The prices of travel products and services could be matched with the budgets of clients
otherwise they will switch the business
 To update the information that is going to be provided at the online sites
 Planning for national and international tour and booking tickets
 Communicating rules and policies of tour to the clients (Lordkipanidze, Brezet and
Backman, 2005)
Financial projection and a brief cash-flow analysis
Financial assumptions
 Startup capital:
Owner’s capital £30000 -
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Bank loan - £120000
 The revenue growth is assumed 10% p.a.
 Cost of sales 20%
 Interest rate on business loan = 7.83%.
 Marketing and promotional expenditure= (+) 15% p.a.
 Salary = (+) 7%
 Rent of store will be 5% p.a.
 Loan repayment in 3 years.
 Website development and maintenance charges = £20000 p.a.
 Tax rate =10% of profits
 Insurance = £1500 p.a
 Miscellaneous expenses = 5% p.a.
Cash flow statement
Pre-Operating
Year
Year 1
(GBP)
Year 2
(GBP)
Year 3
(GBP)
CASH INFLOW
Opening Balance 0 72750 409604 796252
Sales 0 600000 660000 726000
Owner's fund 30000
Bank Loan 120000
Total Cash Inflow 150000 672750 1069604 1522252
CASH OUTFLOW
Working Capital 30000 0 0 0
Legal and Registration Charges 5000 0 0 0
Market Research 10000 0 0 0
Marketing and promotional 17250 17250 19838 22814
Rent of warehouse 0 60000 63000 66150
Website development and maintenance
charges 0 20000 20000 20000
Interest on loan 0 9396 6264 3132
Salary 0 100000 107000 114490
Miscellaneous Expenses 15000 15000 15750 16538
Insurance 0 1500 1500 1500
Tax 0 0 0 0
Loan Repayment 0 40000 40000 40000
Total Cash Outflow 77250 263146 273352 284624
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Closing Balance 72750 409604 796252 1237628
Particulars Year 1 (￡) Year 2 (￡) Year 3 (￡)
Revenue 600000 660000 726000
Less: COGS (20%) 120000 132000 145200
Gross Profit 480000 528000 580800
Operating Expenses
Legal and Registration Charges 5000 0 0
Market Research 10000 0 0
Marketing and promotional 17250 19838 22814
Rent of resturant 60000 63000 66150
Website development and maintenance
charges 20000 20000 20000
Insurance 1500 1500 1500
Salary 100000 107000 114490
Interest 9396 6264 3132
Miscellaneous Expenses 15000 15750 16538
Total Operating Expenses 238146 233352 244624
Operating Profit 241854 294648 336176
Less: Interest 9396 6264 3132
PBT 232458 288384 333044
Less: Tax 23245.8 28838.4 33304.4
Net Profit 209212.2 259545.6 299739.6
CONCLUSION
The report represented a business plan for opening a new travel industry in London. The
major reason behind starting up travel business is the large amount of opportunities available for
business in UK travel industry. The business plan includes description of niche travel and
tourism business concept, product/service characteristics, market potential and business analysis,
Operational plan, financial projection and a brief of cash-flow analysis.
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REFERENCES
Books and Journals
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Psychology. 33(2). pp.410-424.
Fullen, L. S. and Brown, R. D., 2004. How to Open a Financially Successful business. Atlantic
Publishing Company.
Garrod, B., 2005. Tourism Marketing: A Collaborative Approach. Channel View Publications.
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lives. John Wiley & Sons.
Hair, J. F. and et.al., 2015. Essentials of business research methods. Routledge.
Hollick, M. and Braun, P., 2005. Lifestyle entrepreneurship: the unusual nature of the tourism
entrepreneur. Proceedings of the Second Annual AGSE International Entrepreneurship
Research Exchange, Swinburne Press, Melbourne, 10-11.
Kotler, P., Bowen, J. and Makens, J., 2003. Marketing for Hospitality and Tourism. Prentice
Hall.
Lordkipanidze, M., Brezet, H. and Backman, M., 2005. The entrepreneurship factor in
sustainable tourism development. Journal of Cleaner Production. 13(8). pp. 787-798.
Pakroo, P. H., 2014. The small business Start-up kit for California. Nolo.
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Revell, A., Stokes, D. and Chen, H., 2010. Small businesses and the environment: turning over a
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Spenceley, A., 2012. Responsible tourism: Critical issues for conservation and development.
Routledge.
Online
Thomas cook. 2015. [Online]. Available through: <https://www.thomascook.com/thomas-cook-
history/>. [Accessed on 2nd Janurary 2015]
UK TOURISM STATISTICS, 2015. [Online]. Available through:
<http://www.tourismalliance.com/downloads/TA_369_395.pdf>. [Accessed on 2nd
Janurary 2015].
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