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 businesses. On this page, we will first give you some background information with regard to the importance of business planning. We will then go through an Airbnb business plan template step-by-step so you can create your own 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 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 a property or add more 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 business 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.
How To Write a Business Plan for Your Own Airbnb Business
Your Airbnb business plan should include 10 sections as follows:
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 Airbnb business plan.
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, or do you have a portfolio of existing Airbnb properties 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.
In your company analysis, you will detail the type of Airbnb business you are offering.
For example, you might offer the following options:
- 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.
- 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.
- Attached properties – The properties in this category are connected to larger complexes but provide private accommodations. Examples include condos and apartment complexes.
In addition to explaining the type of Airbnb business you operate, the Company Analysis section of your business plan needs to provide background on the business.
Include answers to questions such as:
- When and why did you start the Airbnb business?
- What is your mission statement?
- What are your business goals?
- 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.
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 key markets in which you are operating.
Secondly, this research can improve your strategy, particularly if your research identifies market trends.
The third reason 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 business? 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.
The customer analysis section of your Airbnb business plan must detail the guests 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 ideal guests 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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In this section, you should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are other Airbnb properties.
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 rentals with which you compete. Most likely, your direct competitors will be other Airbnbs and rentals 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 guests 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 regard 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 this section is to document your areas of competitive advantage or your unique selling points. 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 these unique selling points in this section of your 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
- Social media marketing
- Local radio advertising
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.
To demonstrate your Airbnb business’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.
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.
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 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
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.
Putting together a winning Airbnb business plan is a worthwhile endeavor. If you follow the Airbnb business plan 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 ideal guest. 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.
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Airbnb Business Plan FAQs
Growthink's Ultimate Airbnb Business Plan Template allows you to quickly and easily complete a winning Airbnb business plan.
The following sample Airbnb business plan can be used as a template to help you create your own winning Airbnb business plan.
Sunny Beach Vacations is a vacation rental and Airbnb business that specializes in providing accommodations for families and groups. The vacation rental business offers a variety of rental properties, including beach houses, condos, and villas. Sunny Beach Vacations is a privately-owned company with a team of experienced professionals. The company has been operational for over 10 years and has a proven track record of success.
The goal of Sunny Beach Vacations is to increase annual occupancy to 80%. In order to achieve this goal, the company plans to expand its marketing efforts and improve its customer service. Additionally, Sunny Beach Vacations plans to acquire new properties in desirable locations.
The management team of Sunny Beach Vacations is highly experienced and dedicated to the success of the business. The company has a strong financial foundation and does not plan to seek outside financing at this time.
Sunny Beach Vacations is poised for growth and profitability. The company is well-positioned to achieve its goals and continue providing exceptional services to its customers.
Sunny Beach Vacations is a startup business that offers fully furnished properties for rent on a weekly basis to clients who are looking for a house rental for their vacation. The company is based in Orlando, FL area, and operates exclusively within the city limits.
The business was founded in 2017 by John and Jane Doe, who both have extensive experience in the hospitality industry. Its mission is to provide high-quality rentals at an affordable price. To date, they have acquired 3 properties and have plans to expand their portfolio in the coming year.
Business goals include:
- To achieve an occupancy rate of 80% by the end of 20XX.
- To increase their portfolio of properties by 10% each year.
- To provide a high level of customer service that will result in a customer satisfaction rating of 95%.
Sunny Beach Vacations has achieved the following milestones to date:
- 20XX – Acquired 3 properties
- 20XX – Achieved an occupancy rate of 50%
- 20XX – Received a customer satisfaction rating of 92%
Sunny Beach Vacations is a Limited Liability Company (LLC).
The vacation rental industry has seen immense growth in recent years as travelers are increasingly looking for alternative lodging options to traditional hotels.
This can be attributed to a number of factors, such as the rise of the sharing economy, the increased affordability of rentals, and the growing popularity of home-sharing platforms like Airbnb.
In 20XX, the vacation rental industry was valued at $100 billion and is expected to grow to $169 billion by 20XX, at a compound annual growth rate (CAGR) of 11%.
The United States is the largest market for vacation rentals, accounting for 42% of the global market. Europe is the second-largest market, accounting for 30% of the global market.
Airbnb is the largest player in the vacation rental industry, with a valuation of $31 billion as of 20XX. Other major players in the industry include HomeAway, VRBO, and Booking.com.
Sunny Beach Vacations is up against some stiff competition in the vacation rental industry. Direct competition includes other vacation rental companies that operate in the United States, such as HomeAway and VRBO.
The business also faces indirect competition from hotels and resorts, as well as other lodging options such as hostels and bed & breakfast establishments.
However, Sunny Beach Vacations has a few key competitive advantages that will help it to succeed in this market.
Some of these advantages include:
- A large portfolio of properties – Sunny Beach Vacations currently has 3 properties in its portfolio and plans to acquire more in the future. This gives the company economies of scale and allows it to offer a wider range of choices to its customers.
- A strong focus on customer service – The business has a strong focus on providing excellent customer service. This has resulted in a customer satisfaction rating of 92%.
- A competitive pricing strategy – Sunny Beach Vacations offers competitive prices for its vacation rentals.
These advantages give Sunny Beach Vacations a strong position in the market and will help it to achieve its business goals.
Sunny Beach Vacations offers a variety of rental options to meet the needs of different types of customers. We have short-term rentals for those who are looking for a place to stay for a few days or weeks, month-to-month rentals for those who need a longer-term solution, and long-term rentals for those who are looking for a more permanent residence. We also offer a variety of property types to meet the needs of different customers, including apartments, condos, houses, and villas.
Sunny Beach Vacations offers competitive prices on all of our rental options. Our short-term rentals start at $50 per night, our month-to-month rentals start at $1,500 per month, and our long-term rentals start at $2,500 per month. We also offer discounts for customers who book multiple properties or stay for longer periods of time.
Sunny Beach Vacations is located in the heart of the Sunshine State, making it the perfect place to enjoy the sun and the sand. We are centrally located near all of the state’s major attractions, including Disney World, Universal Studios, and Sea World. We are also within driving distance of the state’s beautiful beaches.
Sunny Beach Vacations offers a variety of promotional discounts and deals to help customers save money on their rentals. We also offer a referral program for customers who recommend our business to their friends and family. In addition, we regularly advertise in local papers and magazines, and we are active on social media platforms, such as Facebook, Twitter, and Instagram.
Sunny Beach Vacations is a house rental & Airbnb business that is headquartered in Orlando, Florida. The business was founded in 2019 by John and Jane Doe.
The company currently has 3 properties in its portfolio, all located in Orlando. The business plans to acquire more properties in the future.
The company employs a small staff of 4 people, who are responsible for the day-to-day operations of the business.
Everyday Short-term Processes:
- Customer service: responding to phone calls, emails, and online inquiries in a timely manner; providing prompt and courteous service to guests during their stay
- Maintenance: ensuring that all units are clean and in good working order; addressing any repair or cleaning issues as they arise
- Processing applications: reviewing rental applications and background checks for all potential guests; approving or denying applications in a timely manner
- Check-in/check-out: coordinating with guests on their arrival and departure times; ensuring that units are clean and ready for guests upon arrival
- Increase annual occupancy to 80%
- Reach $X in sales
- Acquire a new property
John Doe – Founder and CEO
John is the founder and CEO of Sunny Beach Vacations. He has over 20 years of experience in the rental industry. Prior to starting Sunny Beach Vacations, he was the owner and operator of a successful condo rental business in the Caribbean. John has a bachelor’s degree in business administration from the University of Florida.
Jane Doe – COO
Jane is the COO of Sunny Beach Vacations. She has over 10 years of experience in the rental industry. Jane oversees all day-to-day operations of the business, including customer service, maintenance, and processing applications. Jane has a bachelor’s degree in business administration from the University of Florida.
John Smith – Vice President of Operations
John is the Vice President of Operations for Sunny Beach Vacations. He has over 15 years of experience in the rental industry. John is responsible for overseeing all property operations, including check-in/check-out, housekeeping, and maintenance. John has a bachelor’s degree in business administration from the University of Central Florida.
Mary Jane – Director of Sales and Marketing
Mary Jane is the Director of Sales and Marketing for Sunny Beach Vacations. She has over 10 years of experience in the rental industry. Mary Jane is responsible for generating leads, converting sales, and overseeing marketing efforts. Mary Jane has a bachelor’s degree in business administration from the University of Florida.
Sunny Beach Vacations is a privately-owned business. The company’s founders have invested $XXX,XXX of their own money into the business. The company is currently profitable and does not plan to seek outside financing at this time.
The income statement for Sunny Beach Vacations shows that the company has generated $XXX,XXX in revenue over the past year. The company’s expenses total $XXX,XXX, resulting in a net profit of $XXX,XXX.
The balance sheet for Sunny Beach Vacations shows that the company has a total of $XXX,XXX in assets. The company’s liabilities total $XXX,XXX, resulting in a net worth of $XXX,XXX.
Cash Flow Statement
The cash flow statement for Sunny Beach Vacations shows that the company has generated $XXX,XXX in cash flow over the past year. The company’s expenses total $XXX,XXX, resulting in an operating cash flow of $XXX,XXX. The company’s capital expenditures total $XXX,XXX, resulting in a net decrease in cash flow of $XXX,XXX.
- Photos of properties
- Customer testimonials
- Marketing materials
- Property management agreement
- List of local businesses and vendors
- Permits and licenses
- Insurance policy
- Financial statements