Airbnb Business Plan Template

Airbnb Business Plan Template

Written by Dave Lavinsky

Airbnb Business Plan

Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow their airbnb business. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through an airbnb business plan template step-by-step so you can create your plan today.

What Is a Business Plan?

A business plan provides a snapshot of your airbnb business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan

If you’re looking to purchase an airbnb, or add to your existing airbnb business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your airbnb in order to improve your chances of success. Your airbnb business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Airbnb Businesses

With regards to funding, the main sources of funding for an airbnb business are personal savings, credit cards, mortgages, and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

If you’d like to quickly and easily complete your Airbnb business plan, download our Airbnb business plan template here.


Airbnb Business Plan Template

Your business plan should include 10 sections as follows:

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of airbnb you are operating and the status; for example, are you a startup, or do you have a portfolio of existing airbnbs that you would like to add to?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the airbnb industry. Discuss the type of airbnb you are offering. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.

Company Analysis

In your company analysis, you will detail the type of airbnb business you are offering.

For example, you might offer the following options:

  1. Home rentals – These are fully furnished properties that are rented for a short period of time – usually on a weekly basis. The client has access to the entire home for the duration of their rental period
  2. Shared Rooms – These are rooms within a property that are rented out. When a client books a shared room, they will be sleeping in a space that is shared with others and share the entire space with other people.
  3. Attached properties – The properties in this category are connected to larger complexes, but provide private accommodations.  Examples include condo and apartment complexes.

In addition to explaining the type of airbnb you operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

  • When and why did you start the business?
  • What milestones have you achieved to date? Milestones could include occupancy goals you’ve reached, number of property acquisitions, etc.
  • Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
Bonus: Download our Airbnb business plan template here and complete your business plan today.


Industry Analysis

In your industry analysis, you need to provide an overview of the airbnb industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the airbnb industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your strategy, particularly if your research identifies market trends.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your airbnb business plan:

  • How big is the airbnb industry (in dollars)?
  • Is the market declining or increasing?
  • Who are the key competitors in the market?
  • Who are the key suppliers in the market?
  • What trends are affecting the industry?
  • What is the industry’s growth forecast over the next 5 – 10 years?
  • What is the relevant market size? That is, how big is the potential market for your airbnb. You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population or tourist arrivals.

Customer Analysis

The customer analysis section of your airbnb business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: households, tourists, etc.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of airbnb you offer. Clearly, vacationers would want different amenities and services, and would respond to different marketing promotions than long-term tenants.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other airbnb businesses.

Indirect competitors are other options customers may use that aren’t direct competitors. This includes the housing market, or hotels. You need to mention such competition to show you understand that not everyone who needs housing or accommodations will seek out an airbnb.

With regards to direct competition, you want to detail the other airbnb properties with which you compete. Most likely, your direct competitors will be airbnb properties in the vicinity.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

  • What types of customers do they serve?
  • What rental lengths or amenities do they offer?
  • What is their pricing (premium, low, etc.)?
  • What are they good at?
  • What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

  • Will you provide superior properties?
  • Will you provide services that your competitors don’t offer?
  • Will you make it easier or faster for customers to book the property or submit an application?
  • Will you provide better customer service?
  • Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For an airbnb business plan, your marketing plan should include the following:

Product: in the product section you should reiterate the type of airbnb business that you documented in your Company Analysis. Then, detail the specific options you will be offering. For example, in addition to short-term rental, are you offering month-to-month, or long-term rental?

Price: Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the properties and term options you offer and their prices.

Place: Place refers to the location of your airbnb. Document your location and mention how the location will impact your success. For example, is your airbnb located in a tourist destination, or in an urban area, etc. Discuss how your location might draw customer interest.

Promotions: the final part of your airbnb marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

  • Advertising in local papers and magazines
  • Reaching out to local websites
  • Flyers
  • Social media marketing
  • Local radio advertising

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your airbnb business, such as customer service, maintenance, processing applications, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect 80% annual occupancy, or when you hope to reach $X in sales. It could also be when you expect to acquire a new property.

Management Team

To demonstrate your airbnb property’s’ ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally you and/or your team members have direct experience in airbnb management. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in real estate, and/or successfully running small businesses.

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement: an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you have 1 rental unit or 10? And will revenue grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets: Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $250,000 on purchasing and renovating your airbnb, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $200,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement: Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing an airbnb business:

  • Location build-out including design fees, construction, etc.
  • Cost of equipment like computers, software, etc.
  • Payroll or salaries paid to staff
  • Business insurance
  • Taxes and permits
  • Legal expenses

Appendix

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your property blueprint or map.

Summary

Putting together a business plan for your airbnb company is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the airbnb industry, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful airbnb business.

Finish Your Airbnb Business Plan in 1 Day!

Don’t you wish there was a faster, easier way to finish your Airbnb business plan?

With Growthink’s Ultimate Airbnb Business Plan Template you can finish your plan in just 8 hours or less!

Click here to finish your Airbnb business plan today.

 

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.

Click here to see how Growthink’s professional business plan consulting services can create your business plan for you.
 

Airbnb Business Plan FAQs

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of airbnb business you are operating and the status; for example, are you a startup, do you have an airbnb business that you would like to grow, or are you operating a chain of airbnb businesses?


 

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