Travel and Tourism Entrepreneurship: Skills and Finance Analysis

This report delves into the realm of travel and tourism entrepreneurship, examining the essential skills, traits, and financial aspects crucial for success. It begins with a self-assessment of entrepreneurial characteristics and skills, including research abilities, risk-taking, and goal-setting, alongside a skills audit using SWOT analysis. The report then explores the development of an entrepreneurial enterprise, using Thomas Cook as a case study, highlighting factors that contributed to its success, such as initiative, service offerings, and legal agreements. Finally, it investigates sources of finance and support available to enterprises in the travel and tourism sector, offering insights into potential factors leading to enterprise success. The report is a comprehensive overview of the key elements required for thriving in the competitive travel and tourism industry.

Travel and Tourism
Entrepreneur
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Self-assessment of entrepreneurial trait (Characteristics) and skills required in the travel and
tourism entrepreneur....................................................................................................................3
Skills and trait audit for analysing strength and weaknesses.......................................................4
TASK 2............................................................................................................................................6
Development of an entrepreneurial enterprise and factors that have lead to the success of an
enterprise......................................................................................................................................6
TASK 3............................................................................................................................................8
Sources of finance and support available to enterprises in travel and tourism sector.................8
Potential factors which leads to the enterprise.............................................................................9
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
Entrepreneur is the one who initiates setting up the business by taking all the
financial risks with the main aim of earning profits (Charypar and Nagel, 2005). However,
they are the only one that generally take all the crucial decisions of the organization and
business. The present report generally focuses on assessing and understanding the key skills as
well as characteristics that are required by the entrepreneur within travel and tourism industry so
that he or she can become a successful entrepreneur. Furthermore, the study will also evaluate
different sources of finance and supports available to enterprises in the travel and tourism sector.
TASK 1
Self-assessment of entrepreneurial traits (Characteristics) and skills required in the travel
and tourism sector
Travel and tourism industry is considered as a highly volatile sector in the modern
scenario which requires highly effective and skilled entrepreneurs in order to conduct business
operations successfully. The main purpose of enterprise within the travel and tourism sector is to
render tour and travel services to the visitors as well as tourists and attain higher profit within the
industry. However, there are different entrepreneurial traits and skills that I require within the
travel and tourism industry so that I can satisfy the requirements of tourists effectively.
Different characteristics that are being required by the individual to render successful
activities and services within the travel and tourism sector include- Ability to research: The foremost characteristics that I must require for establishing the
enterprise within travel and tourism industry include ability to research the market, needs
and wants of customers, competitor’s pricing and travel services that they provide to their
visitors and travellers etc. so that business can easily create and design their travel
packages for attracting more customers. It is essential for entrepreneur to possess the
characteristics related with researching and investigating the overall marketplace (Hall
and Page, 2014). Risk taking: Another characteristic and skill that I must require for enabling successful
entrepreneurship is that I must possess risk taking ability that support me in taking risk so
that I can successfully lead in the market. For enabling successful entrepreneurship, risk
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taking is the key trait that is required by the individual so that they can result in growth of
the business organization.
 Goal setting: Another entrepreneurship trait that is needed for successful
entrepreneurship includes enabling proper setting of goals so that business within travel
and tourism sector can sustain in the competitive environment (Mancini, 2012).
Despite of the entrepreneurial traits (characteristics), there are different entrepreneurial
skills that are required by the entrepreneur within travel and tourism sector. These are as follows: Communication skills- It is considered as a key skill that is required by the individual for
enabling successful entrepreneurship. Communication is generally termed as two way
process that exchanges ideas and information from one person to another. With the help
of effective communication skills, I can easily communicate to the customers and visitors
in order to attract them towards packages. Within travel and tourism sector, verbal
communication plays an effective role for the business as it requires to be in touch with
the customers (Peters and Schuckert, 2014).
 Management skill- Another skill that is needed for successful entrepreneurship is
effective management skills. With the help of these skills, entrepreneur can easily
manage and allocate resources within the business. However, with the help of
management skills, I can also focus on managing the customer’s data and information as
well as financial management of the business.
Skills and trait audit for analysing strength and weaknesses
With the help of personal audit, I can easily assess my personal skills and characteristics
that support me in becoming an entrepreneur. Further, it also helps me in identifying the skills
and traits that I don't possess. Therefore, I can easily assess my individual strengths, weaknesses,
opportunities and threats so that I can render effective services and become successful
entrepreneur. The personal SWOT is as follows- Strength- With the help of auditing, I have determined that I possess effective skills and
abilities that support me in becoming successful entrepreneur. For instance; I have
effective communication skills that support me to communicate with different segment
customers effectively. However, I also possess effective management skills that support
me in organizing and managing the resources properly within the travel organization so
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that I can create and design effective plan for the travellers. In addition to this, my major
strength is that I possess risk taking ability that supports me in initiating business within
travel and tourism sector. Weaknesses- With the help of skills audit program, I have also identified that there are
certain weaknesses that impact me in becoming successful entrepreneur. I have lack of
work experience in the field of travel and tourism sector that affects my capability to
perform activities within enterprise. However, I am also ineffective in dealing with the
conflict situation arising within the enterprise. In addition to this, another weakness is
that I have also lack of confidence while dealing with the business travellers and
customers. Furthermore, another weakness that is identified is related with time
management. Along with this, I have lack of stress management skills that results in
affecting business activities and leads to enhance stress. Threats- Certain threats have also been identified that affect me in becoming successful
entrepreneur. The foremost threat is related with the availability of unsupportive
members within the organization. However, another threat that is identified while
enabling self-auditing is that it is very difficult for me to determine the changing
preferences of travellers. Opportunities- However, there are several opportunities that are available for me so that I
can become successful entrepreneur. The opportunity is to amend the weak skills with the
help of personal development plan so that I can enhance the skills that are required to
become successful entrepreneur. Another future opportunity is to expand the business
activities so that I can gain information regarding the new products and services that are
preferred by the customers.
Personal action plan
Current skills Skills to work on Goals Time period
Communication
skills
Conflict
management
skills
My goal is to overcome the
conflict that arises within
the workplace among
customers related with the
2 month
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competitor’s products and
services.
Management
skills
Confidence My goal is to enhance the
confidence level that
supports me in promoting
company's products and
services in the market
(Thomas, Shaw and Page,
2011).
2 months
Risk taking Stress
management
Another goal is to amend
the stress management
skills so that I can easily
manage my stress related
with the customers at the
workplace.
3 month
Individual trait and skills Ranking
Ability to research 5
Goals setting 1
Management skills 2
Risk taking 6
Communication 4
Stress management 8
Confidence 3
Conflict management 7
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TASK 2
Development of an entrepreneurial enterprise and factors that lead to the success of enterprise
In order to set up a large successful organization, it requires an entrepreneur that initiates
to take the risk and make decision regarding to start the enterprise and manage the different
resources so that it may attain success in the competitive marketplace (Sigala, Christou and
Gretzel, 2012). One of the famous entrepreneurs that has changed the scenario of travel and
tourism sector is Thomas Cook who founded a travel agency that is popularly named as Thomas
Cook Group. In the current marketplace, Thomas Cook is a leading travel agency that provides
leisure and luxurious travel services to their customers and visitors. In the year 1841, Thomas
Cook influenced Midland Countries Railway Company to trial the train for the passenger from
Leicester and Loughborough. He has managed relationship with Railways that supports them in
initiating the travel tours for the passengers. However, he has also introduced travel vouchers,
cheques as well as guidebooks that assist in managing and enhancing the activities among the
customers (Zhao, Ritchie and Echtner, 2011). Thomas Cook is a self-made man with the high
confidence level that motivated him to set many ventures and business.
There are different qualities as well as skills that support the entrepreneur to respond to
the external changes that mainly results the business to sustain in the competitive scenario. For
example, common quality of a developing entrepreneur that is also of Thomas Cook is that he
has strong belief in him that founding and setting the travel agency will be beneficial for him as
it will act as pioneer for them and meet the leisure requirement of customers. Another major
quality of Thomas Cook was that he was open to adopt any change that supported the travel
agency to succeed in the long term (Sharpley and Stone, 2010). With adopting change, Thomas
Cook has updated their services in an effective manner and through this, they provide leisure and
luxurious travel services to different segment customers. In addition to this, Thomas Cook also
possesses an effective ability to search new destination and place for their customers so that
business can easily meet their needs and requirement. However, he has also planned three
summer outings for the societies as well as school children. In 1845, Thomas Cook organized
travel event for the party from Leicester to Liverpool that attracted large number of travellers
towards their services.
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Furthermore, there are different factors that lead to the success of Thomas Cook Group
are: Initiative- The foremost factor that has led to the success of Thomas Cook group is that
the founder of travel agency, Thomas Cook has taken initiative in setting up the
enterprise that has changed the scenario of the travel and tourism sector within UK.
Therefore, initiative factor is the one that has led to the success of travel agency (Travel
History: The Tale of Thomas Cook, Father of Modern Tourism, 2013). Services offered by the travel agency- Another factor that leads to the success of Thomas
Cook Group is unique services and products that are offered by the agency in travel and
tourism sector. Services and products offered by agency are effective enough in attracting
the individual that leads to the success of agency. In addition to this, in the contemporary
environment, Thomas Cook generally focuses on various services which keep attract
their different segment customers and also result in enabling success of the enterprise
within the travel and tourism sector (Thomas cook, 2015).
 Legal agreement- Another factor which results in success of enterprise includes that
Thomas Cook while rendering services enters into the legal contracts with the passengers
that results in building legal relationship in between the business and passengers.
However, Thomas Cook has make legal agreement with the railway company in which 1
shilling will be charged for a person that mainly includes train ticket charges with the
addition of food charges that will be served in the train. Thus, it may result in avoiding
the situation of conflicts and lead to the successful enterprise.
TASK 3
Sources of finance and support available to enterprise in travel and tourism sector
There are different sources of financial support that are available to the entrepreneur so
that they can easily establish successful enterprise within the travel and tourism sector. Finance
is essential for establishing the enterprise as it is termed as an initial requirement that is being
used by the entrepreneur to set up their business (Lysikova, 2012). Basically, there are different
sources and support through which entrepreneur can easily collect the required cash and finance
that would support them in establishing or starting new business. Different sources of finance
are-
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 Owner's capital- The foremost source through which enterprise within travel and tourism
sector can easily arrange the finance is owner's capital. It is also regarded as an effective
source of finance that includes no interest rate as owners invest their own money for
establishing the business. Bank loan- Another source of finance includes taking loan from the commercial banks. It
is an easiest mode of collecting and accumulating the finance as for starting business, I
can easily get the required fund. Taking loan from the bank, sometime may lead to the
burden on the entrepreneur as they have to repay sum of money in instalment with the
certain percentage of interest (Law, Cheung and Lo, 2004).
 Issuing share in the market- Another effective source of finance includes issuing share
in the market so that entrepreneur can collect capital from the market. Issuing share is an
effective source for the entrepreneur as through this, they can borrow finance from the
investor by issuing shares and in the return, they are liable to pay dividend and interest on
the share that are purchased by the investor.
Potential factors which leads to enhance the success of enterprise
In order to establish successful business within travel and tourism sector, there are several
potential factors that need to be taken into consideration for the success of enterprise (Hollick
and Braun, 2005). Different potential factors for the success of enterprise in travel and tourism
context are- Goal and objective of the enterprise- The foremost potential for the success of enterprise
in travel and tourism sector is related with their goals and objectives. The key goal of
enterprise within such sector is to meet the leisure and luxurious needs of customers as
well as travellers. While, the objective of enterprise is to deliver outstanding services to
the business travellers. Therefore, it acts as a major potential which leads to enhance the
success of enterprise. Business concept- The potential success of enterprise is their concept of business that is
unique and creative as it will focus on providing better travel services to their customers
so that they can have pleasant stay. For the success of business, I can also concentrate on
assessing the demand and requirement of customers so that business can meet their travel
related needs. According to the modern scenario, I must focus on eco-tourism packages,
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adventurous packages as well as honeymoon packages in order to attract more customers.
All the packages designed by the enterprise must include all the charges related with
accommodation, transportation as well as food (Charypar and Nagel, 2005). Description of products and services- Another factor that focuses on the success of
enterprise includes description of travel products and services that are offered by the
management. Products as well as services that are generally offered by the enterprise
include adventurous packages as well as eco-tourism packages for the customers because
these are commonly preferred by them. However, prices of products and services will be
initially low so that customers can easily avail the services of enterprise that results in
success of the enterprise.
 Market potential analysis- In the contemporary environment, travel and tourism industry
is highly successful as it contributes more than 8% of income to the GDP of UK
economy. In order to serve eco-tourism and adventurous packages, business can target
young and school going students as they are fond to visit such adventurous and eco-
tourism places in order to have pleasant stay (Peters and Schuckert, 2014).
Start-up plan Market research: The foremost step in the operational plan includes the process of
researching the market which will determine about different segment customers to whom
enterprise will render travel services. With the help of market research, they will also
come to identify different travel products and services that are offered by the rival tour
operators and agencies. Analysis of research outcome: After enabling the market research, entrepreneur will
analyse the research outcome so that they can plan services in accordance with the rival
companies and needs of customers. This in turn will help company to easily sustain its
position in the market. Financing: Another step within start-up plan consists of selecting effective source of
financing through which they can easily set up and start their business in the competitive
market (Pritchard and Howard, 2015). At the time of selecting the source of finance,
management also needs to consider the cost that is associated with that source.
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 Planning the tour packages: After financing, tour operator will plan different tour
packages for the customers according to their requirements. Therefore, travel operator
generally focuses on creating tour packages related with adventurous and eco-tourism
destination (Charypar and Nagel, 2005).
Financial projection
Projected Cash flow statement
Particulars 0 year Year 1 Year 2 Year 3
Cash Inflow
Opening balance of cash £0.00 £17,000.00 £23,000.00 £51,580.00
Revenue from cash sales £0.00 £80,000.00 £102,000.00 £120,000.00
Receipt from loan £50,000.00 £0.00 £0.00 £0.00
capital contribution £10,000.00 £0.00 £20,000.00 £0.00
Total Cash Inflow £60,000.00 £97,000.00 £145,000.00 £171,580.00
Cash outflow
Capital expenditure £10,000.00 £0.00 £0.00 £0.00
Infrastructure £15,000.00 £0.00 £0.00 £0.00
Market research £2,000.00 £0.00 £0.00 £0.00
legal expenses £1,000.00 £0.00 £0.00 £0.00
Cost of Tourist services £0.00 £20,000.00 £21,000.00 £25,200.00
Marketing & Advertisement £5,000.00 £7,000.00 £7,500.00 £7,500.00
Website & Mobile app £2,000.00 £4,000.00 £6,000.00 £6,000.00
Office & Administration Exp. £6,000.00 £8,000.00 £9,000.00 £9,500.00
Salary £0.00 £20,000.00 £25,000.00 £35,000.00
Interest £0.00 £10,000.00 £10,000.00 £5,000.00
Misc. Expenses £2,000.00 £5,000.00 £6,000.00 £7,500.00
Tax £0.00 £0.00 £8,920.00 £9,200.00
Total Expense £43,000.00 £74,000.00 £93,420.00 £104,900.00
Closing balance of cash £17,000.00 £23,000.00 £51,580.00 £66,680.00
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Projected Profit & Loss
Account
Particulars Year 1 Year 2 Year 3
Sales £200,000.00 £255,000.00 £300,000.00
Less: COGS £40,000.00 £42,000.00 £50,400.00
Gross profit £160,000.00 £213,000.00 £249,600.00
Less: Operating Expenses
Marketing &
Advertisement £5,000.00 £7,000.00 £7,500.00
Website & Mobile app £4,000.00 £6,000.00 £6,000.00
Office & Administration
Exp. £8,000.00 £9,000.00 £9,500.00
Salary £20,000.00 £25,000.00 £35,000.00
Misc. Expenses £5,000.00 £6,000.00 £7,500.00
Total operating expenses £42,000.00 £53,000.00 £65,500.00
Operating profit £118,000.00 £160,000.00 £184,100.00
Less: Interest £5,000.00 £0.00 £0.00
Profit before tax £113,000.00 £160,000.00 £184,100.00
Less: Tax 0 £8,920.00 £9,200.00
Net Profit £113,000.00 £151,080.00 £174,900.00
CONCLUSION
From the above report, it can be concluded that travel and tourism sector is highly
potential that contributes its major portion within the economy so that government can further
develop and amend the destinations to increase demand within industry. Furthermore, the report
has also concluded that it is essential for entrepreneur to select effective source of finance
through which they can easily manage business operations for setting up new business
organization. Lastly, it has also prepared business start-up plan as well as financial projection for
the enterprise within travel and tourism sector.
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