Given the many attractive places in South Africa and the need for affordable tourist destinations, opening a guest house is very profitable. As both domestic and international tourism increases, the demand for accommodation will likely increase as well. Being one of the world’s most popular destinations the hospitality sector has been growing over the years. More than 10 million people visit South Africa every year. The hospitality and tourism sector generates about R400 billion annually. This sector is no doubt one of the country’s economy drivers. As more people, both local and international, travel to see the wildlife, scenic beauty and to experience the warm climate the demand for accommodation services including guest houses will keep increasing. Given that accommodation is directly linked to tourism whatever happens to the tourism sector will directly and indirectly influence the accommodation sector.  Thus, the high demand for tourism services will translate to a high demand for accommodation. This article will outline how to start a guest house business in South Africa, and the guest house business plan – PDF, Word and Excel.

A guest house is a lucrative business providing income for thousands of entrepreneurs, but there are some essential factors you need to consider before you venture into this type of business. You need to decide on the size of your guest house; the location, the various rooms and amenities you intend on offering and your target market. These factors will be affected by the amount of capital you have. Thus, you should carry out a feasibility study, market research and have a good guest house business plan before you venture into this business.

LOCATION & PREMISES

For your guest house to be successful you should ensure that it is in the right location to attract clients. This is an important decision to make before you run a guest house. It is important that you locate your guest house close to your target market. Consider the amount of road traffic, and find an easily accessible location where people can stop and quickly get accommodation services. The best places to locate your guest house include city centres, surburbs and close to tourist attractions. That way anyone who visits the area can easily locate your guest house. There are plenty of popular tourist attractions in each province that you can choose to place you guest house. Also, it is important to be strategic about your neighbouring businesses because you are more than likely going to feed into each other instead of competing. If you open a guest house in an overly saturated area, the likelihood that your business will succeed will be very low. The guest house business plan should cater for the costs of building or renting the premises.

EQUIPMENT FOR A GUEST HOUSE

The kind of equipment you require for a guest house is not complicated. You will require furniture including the beds, essentials for your guests such as towels, robes, and catering facilities if you decide to offer meals as part of your stay packages. The equipment and facilities you need will depend on the size of your guest house and the kind of products and services you will offer. You may need to buy vehicles for shuttle services for your guests. Your guest house business plan should cater for these and other costs including the equipment you will need for your business.

PRODUCTS AND SERVICES

The products and services your guest house will offer will be determined by you target market. Most guest houses offer different packages at different rates. The basic and more affordable package can be a single regular sized bed with access to Wi-Fi and not many amenities whereas a premium stay package can be a large room with a king sized bed plus room service. These packages will differ with each accommodation service. Guest houses can also offer meals. It is advisable to have various kinds of amenities and complementary services for your guest house to attract as many customers’ as possible. Another essential factor in running a guest house is selecting the right staff for your guest house. Consider people who can provide efficient and quality services consistently. Your guest house business plan should outline the various products and services you will provide and take the costs of these services into account.

STAFF & MANAGEMENT

As a customer-centric guest house, it is important that you hire employees that are friendly efficient and hardworking. The best employees for a guest house are those that are passionate about hospitality. If you want to hit the ground running it is better to hire a team of people who already have experience in this business. Your staff members should know how to treat customers and maintain an accommodating environment. For a guest house to be successful your customers service must be on point on a regular basis.  Any inexperienced staff members will need to get extensive training before they can be given important tasks. There is a need to ensure a safe environment for both your staff and guests. The kitchens, rooms and common areas must be clean and safe from harm. Depending on the size of your guest house, the actual number of your staff will vary however, you will need cleaners, cooks, housekeepers, security as well as management. Your guest house business plan should clearly cater for the salaries and day to day expenses of your employees.

MARKET

There is a huge demand for guest houses. More than 10 million people visit South Africa every year, which create a strong demand for accommodation services. There is also a huge local demand from individuals, couples, companies, business people and local tourists. South Africa is known to have some of the best accommodation and entertainment services, so tourists all over the world will expect world class services. All visitors seek to experience the diverse cultures, the scenic beauty, and the adventurous opportunities the country has to offer. As more people seek less of buying expensive tangible items and seek to have more of experiences as their income grows, the demand for accommodation services driven by tourism is likely going to continue on an upward trend. Your guest house business plan should include a proper marketing strategy.

IS A GUEST HOUSE A GOOD INVESTMENT?

Building your own guest house brand from scratch can be rewarding given that accommodation is an important part of tourism. If done well, investing in a guest house can be a profitable venture, but obviously, this will depend on many factors such as your target market.  You can easily start by putting up a room on Airbnb if you decide to start small and eventually operate a full guest house from your returns. Thus, it is possible to make reasonable profit margins from running an accommodation business. Apart from the obvious advantages of becoming financially independent and becoming your own boss, running a guest house can be a rewarding way of uplifting your community.

Given that the South African market is one of the leading emerging economies on the African continent and one of the best tourist destinations there is potential for high growth. The hospitality sector has been growing steadily and will likely continue to grow in the coming years, thus opening a guest house can be a good investment. Whether you are a young entrepreneur, a professional seeking to start your own business or someone who needs a retirement plan, investing in a guest house is something worth considering. One thing that can set you apart before investing in any venture is developing a business plan. A well thought out business plan will help you in both the short term and long term. There are various risks associated with running a guest house like any other venture, so your guest house business plan should clearly outline these risks and the different ways you will minimise them.

PRE-WRITTEN GUEST HOUSE BUSINESS PLAN (PDF, WORD AND EXCEL): COMPREHENSIVE VERSION, SHORT FUNDING/BANK LOAN VERSION AND AUTOMATED FINANCIAL STATEMENTS

For an in-depth analysis of the guest house business in South Africa, purchase our guest house business plan. We decided to introduce the business plans after noting that many South Africans were venturing into the guest house business without a full understanding of the industry, market, how to run the business, the risks involved, profitability of the business and the costs involved, leading to a high failure rate of their businesses.

Our business plan will make it easier for you to launch and run a guest house business successfully, fully knowing what you are going into, and what’s needed to succeed in the business. It will be easier to plan and budget as the guest house business plan will lay out all the costs involved in setting up and running the guest house business. The business plan is designed specifically for the South African market.

USES OF THE GUEST HOUSE BUSINESS PLAN (PDF, WORD AND EXCEL)

The guest house business plan can be used for many purposes including:

  • Raising capital from investors/friends/relatives
  • Applying for a bank loan
  • Start-up guide to launch your guest house business
  • As a guest house business project proposal
  • Assessing profitability of the guest house business
  • Finding a business partner
  • Assessing the initial start-up costs so that you know how much to save
  • Manual for current business owners to help in business and strategy formulation

CONTENTS OF THE GUEST HOUSE BUSINESS PLAN (PDF, WORD AND EXCEL)

The business plan includes, but not limited to:

  • Market Analysis
  • Industry Analysis
  • 5 Year Automated Financial Statements [ Income statements, cash flow statements, balance sheets, monthly cash flow projections (3 years monthly cash flow projections, the remaining two years annually),break even analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortisation]
  • Marketing Strategy
  • Risk Analysis
  • SWOT & PEST Analysis
  • Operational Requirements
  • Operational Strategy
  • Why some South Africans in the guest house business fail, so that you can avoid their mistakes
  • Ways to raise capital to start your guest house business in South Africa

The Guest House Business Plan package consist of 4 files

  1. Guest House Business Plan – PDF file (Comprehensive – 78 pages)
  2. Guest House Business Plan – Editable Word File (Comprehensive – 78 pages)
  3. Guest House Business Plan Funding Version – Editable Word File (Short version for applying for a loan – 49 pages)
  4. Guest House Business Plan Automated Financial Statements – (Editable Excel file)

The financial statements are automated. This implies that you can change eg the price per room, salaries etc, and all the other financial statements will automatically adjust to reflect the change. 

GET THE GUEST HOUSE BUSINESS PLAN (PDF, WORD AND EXCEL) - R400 Only.

We decided to make the business plan affordable to anyone who would want to start the business, and the price for the pre-written business plan is only 400 Rand.

We have several payment methods which you can use.

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If you want to purchase multiple business plans at once using Visa Card/MasterCard then  click here: Business Plans Store

The business plan package is a zipped compressed file containing the PDF, Word and Excel documents. To open the package after downloading it, just right click, and select Extract All. If you have any problems in downloading and opening the files, email us on sales@bizbolts.co.za and we will assist you.

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Click Buy Now below to purchase. After you have purchased, you will instantly see the download link for the business plan package on the screen. We will also email you the download link. Get instant access to the business plan now!

If you want to purchase multiple business plans at once using Instant EFT then  click here: Business Plans Store

The business plan package is a zipped compressed file containing the PDF, Word and Excel documents. To open the package after downloading it, just right click, and select Extract All. If you have any problems in downloading and opening the files, email us on sales@bizbolts.co.za and we will assist you.

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