FINE LIVING HOSTEL

BUSINESS PLAN
TABLE OF CONTENTS

 Executive Summary
 Company and Financing Summary
 Products and Services Overview
 Strategic Analysis with current research
 Marketing Plan
 Personnel Plan
 3 Year Advanced Financial Plan
 Expanded Financial Plan with Monthly Financials
 Loan Amortization and ROI Tools
 FREE PowerPoint Presentation for Banks, Investors, or Grant Companies
1.0 Executive Summary

The purpose of this business plan is to raise TZS 80,000,000 for the development of a hostel
while showcasing the expected financials and operations over the next three years. The Hostel,
Inc. (“FINE LIVING HOSTEL”) is a Tanzania based corporation that will provide customers with
an outstanding hostel services offered to College Students studying on a budget. The Hostel
was founded by Ernest Haule

1.1 Products and Services

FINE LIVING HOSTEL will provide very affordable rooms to individuals especially students
studying within Dar es salaam region. Primarily, Management anticipates, students, and people
that are seeking cost effective for hostel services. The business will have multiple revenue
streams, which will allow the business to achieve maximum profitability by providing all hostel
services that a customer could want from one location. The third section of the business plan
will further describe the services offered by the Hostel.

1.2 The Financing

Mr. Ernest Haule is seeking to raise Tshs 80,000,000/= from a lending institution in order to
launch the operations of FINE LIVING HOSTEL. The terms, interest rate, and loan covenants
are to be determined during negotiation. However, this business plan assumes that the
business will receive a 5year loan with a 7% interest rate due on the outstanding principal
balance. The financing will be used for the following: • Development (renovations of the existing
buildings) of the Company’s Hostel location. • Financing for the first six months of operation. •
Capital to purchase FF&E for the hostel.

1.3 Mission Statement

FINE LIVING HOSTEL.’s mission is to become a recognized leader in its market for local and
cost-effective hostel and overnight stay services.

1.4 Management Team

The Company was founded by Ernest Haule who has more than 10 years of experience in the
Insurance and Risk Management Services and two years in Hotel Management industry.
Through his expertise, he will be able to bring the operations of the business to profitability
within its first year of operations.

1.5 Sales Forecasts

Mr. Haule expects a strong rate of growth at the start of operations. Below are the expected
financials over the next three years.
 PROFORMA PROFIT AND LOSS (YEARLY)
Year 1 2 3
Sales
Operating Costs
Taxes
Net Profit

1.6 Expansion Plan

The Founder expects that the business will aggressively expand during the first three years of
operation. Mr. Haule intends to implement marketing campaigns that will effectively target
individuals within the target market domestically and internationally that are studying on a
budget.

2.0 Company and Financing Summary

2.1 Registered Name and Corporate Structure

FINE LIVING HOSTEL. Is the family operating business with future plan of registering with
BRELLA.

2.2 Required Funds

At this time, the Hostel requires TZS 80,000,000/= of debt funds. Below is a breakdown of how
these funds will be used:
Projected Startup Costs

Building renovations
Working Capital
Opening Supplies
Marketing Budget
Miscellaneous and unforeseen costs

2.3 Investor Equity

At this time, Management is not seeking an outside equity investor.

2.4 Management Equity

The family will retain a 100% ownership interest in the business.

2.5 Exit Strategy

The Management has planned for one possible exit strategy. The strategy would be to sell the
Company to a larger entity at a significant premium. Since, the hospitality industry maintains a
moderate risk profile once the business is established; the Management feels that the Company
could be sold for ten to fifteen times earnings.

3.0 Products and Services

Below is a description of the services offered by the Hostel.

3.1 Rental of Rooms

The Hostel facility intends to operate as a highly rated hostel facility that will feature a number of
amenities commonly found in comparably priced hostels. The Company expects that the facility
will feature 20 hostel style rooms. Each room will feature a full-sized bed, internet facility,
medium sized wardrobe and a small bathroom attached to the room. The business will charge
approximately Tshs 150,000 per month for a stay in the Hostel.

4.0 Strategic and Market Analysis

4.1 Economic Outlook

This section of the analysis will detail the economic climate, the hospitality industry, the
customer profile, and the competition that the business will face as it progresses through its
business operations. Currently, the economic market condition in the Tanzania is sluggish. This
slowdown in the economy has also greatly impacted real estate sales, which has halted to
historical lows. Many economists expect that this recession will continue for a moderate period
of time, at which point the economy will begin a prolonged recovery period.

4.2 Industry Analysis

Within the Tanzania, there are approximately 48,000 businesses that own and operate one or
more hospitality locations. Aggregately these businesses generate $90 billion dollars a year of
revenue and provide jobs for 1.3 million people. Aggregate payrolls over the last five years have
exceeded $24 billion dollars. The hospitality industry is mature. The future growth rate of the
industry is expected to remain in line with the growth of the general economy. Management
believes that they key to remaining competitive in this field is to continually upgrade and
improve the level of service offered by the Hostel while concurrently branding the Company’s
name among frequent travelers.

4.3 Customer Profile

The Hostel’s average client will be lower to middle class man or woman that studying in different
colleges. Common traits among clients will include: • Annual household income not exceeding
$35,000 • Will spend $50 per night with a stay with the Hostel. • Lives within the Continental
United States or Europe • Will spend 3 to 7 nights with the Hostel during their stay within New
York.

4.4 Competitive Analysis

This is one of the sections of the business plan that you must write completely on your own. The
key to writing a strong competitive analysis is that you do your research on the local
competition. Find out who your competitors are by searching online directoriend searching in
your local Yellow Pages. If there are a number of competitors in the same industry (meaning
that it is not feasible to describe each one) then showcase the number of businesses that
compete with you, and why your business will provide customers with service/products that are
of better quality or less expensive than your competition.

5.0 Marketing Plan

The Hostel intends to maintain an extensive marketing campaign that will ensure maximum
visibility for the business in its targeted market. Below is an overview of the marketing strategies
and objectives of the business.

5.1 Marketing Objectives

 • Establish relationships with colleges and higher learning institutions

 • Develop an online presence by developing a website and placing the Company’s name
and contact information with online directories.
  

5.2 Marketing Strategies

Management intends to use a qualified advertising and marketing firm to help the Hostel reach
its intended audience of people seeking low cost accommodations. This campaign will include
the use of traditional print and media advertising as well as the Internet. The Hostel will also use
an internet based strategy. This is very important as many people seeking local services, such
as hostels, now the Internet to conduct their preliminary searches. Mr. Doe will register the
Hostel with online portals so that potential customers can easily reach the business. The
Company will also develop its own online website, which will feature e-commerce functionality
so that the business can generate income from people that register for their stays on the
internet. The Company will maintain a sizable amount of print and traditional advertising
methods within local markets to promote the hostel services that the Company is selling.

5.3 Pricing

In this section, describe the pricing of your services and products. You should provide as much
information as possible about your pricing as possible in this section. However, if you have
hundreds of items, condense your product list categorically. This section of the business plan
should not span more than 1 page.

6.0 Organizational Plan and Personnel Summary

6.1 Corporate Organization

6.2 Organizational Budget

6.3 Management Biographies

In this section of the business plan, you should write a two to four paragraph biography about
your work experience, your education, and your skill set. For each owner or key employee, you
should provide a brief biography in this section.

7.0 Financial Plan

7.1 Underlying Assumptions

 • Hostel, Inc. will have an annual revenue growth rate of 16% per year.
 • The Founder will acquire $250,000 of debt funds to develop the facility.
  • The property will have an annual appreciation rate of 6% per annum.

7.2 Sensitivity Analysis

In the event of an economic downturn, the business may have a decline in its revenues.
Traveling is a luxury and during times of deleterious economic conditions, the business may
have issues with its top line income. Additionally, the high margins generated by the business
will ensure its continued profitability despite moderate decreases in revenue.

7.3 Source of Funds

7.4 General Assumptions

7.5 Profit and Loss Statements 

7.6 Cash Flow Analysis
 

7.7 Balance Sheet

.

7.8 General Assumptions

7.9 Business Ratios

Expanded Profit and Loss Statements

Expanded Cash Flow Analysis