The hospitality sector is one of the most popular areas of industry for new businesses, and every year, thousands of new startups launch with hopes of hospitality success.
Hospitality industry expert Bharat Lall has shown that the hospitality industry can offer those with good ideas and an eye for an opportunity the chance to prosper. But no matter how innovative your approach, no one can afford to launch a new hospitality business without attending to the fundamentals. Whether you are setting up a pop-up restaurant, taking over a new hotel or creating an entirely new type of hospitality concept, here are the key factors you will need to consider.
Get the structure right
Setting up a business involves a number of important decisions at an early stage, and few are more significant than deciding on the structure that you will be using. Whether you are opting for a limited company, a partnership or some other business setup, each type of structure has its own rules for tax and for taking profits, and it is a good idea to discuss the pros and cons of all the possible structures with an expert advisor before you start.
Sort out your investment
Every new business requires initial investment, and hospitality ventures are no different. There are a number of possible sources of funding for your business, including personal savings, loans from financial institutions or third-party investors. When it comes to taking funding from third parties, it is important to fully detail the terms of the funding, in order to ensure that the relationship between you and your investor runs smoothly as the business develops.
Plan your technology strategies
These days, any new hospitality business relies heavily on technology and social media to help it grow. Whether you are running a hotel or a restaurant, you need to have a fully developed strategy that will help you to position your brand to take full advantage of the possibilities offered by modern marketing technology. From review sites to online hospitality deals, you need to maximize your presence and boost your audience, and for your launch, a well-planned social media strategy can provide you with a great start. Given the importance of cybersecurity, make sure that you don’t overlook the importance of setting up an effective set of data protection policies to safeguard your customers’ details.
Take time over branding
There are a number of factors to weigh up when you are considering branding for your new hospitality business. The first thing to bear in mind is the importance of not accidentally breaching the branding rights of other organizations when you put together your logos or names. Equally, you should register your branding as soon as possible to prevent others from stealing it. Take time to get the branding right, as the hospitality industry is so competitive that unoriginal or stale branding can easily be overlooked by potential customers.
Property and licenses
In many ways, finding the best location for your hospitality venture and fitting it out are the easy parts. Make sure that your launch plan allows you plenty of time to get through the licensing process, which may require you to apply for liquor or music licenses, and give yourself time to negotiate any necessary leases or rental arrangements.
Finding employees in the hospitality sector is not as difficult as in some industries, as they are usually employed on a short-term basis, and you can usually find trained staff fairly quickly. You should still take the time and trouble to interview all potential employees fully, and bear in mind that your staff will be the public face of your restaurant. You will also need a fully thought out staffing plan, which includes the drawing up of employment contracts.
Contracts and partners
As part of your new venture, you will have to deal with many different partners, including a range of suppliers, so it is a good idea to set out the terms and conditions of your relationship right at the start, avoiding the potential for problems later on.
Plan for growth
It can be tempting to put all your energy into planning the launch of your business, but in many ways, that’s when the hard work really begins. Many hospitality businesses fail because they are not flexible or scalable enough to take advantage of new opportunities when they arise. Make sure that your business plan includes a long-term element so that you are well positioned to grow or meet the future challenges.
Setting up a hospitality business can be an incredibly rewarding achievement and although there are many challenges to be overcome to make your business successful, by taking the time to plan your strategy fully, you will be well placed to succeed.