Tourism Website Services Business Plan
The Internet is changing the World. Before our eyes, the World Wide Web is systematically transforming industry after industry. To an increasing extent, a company does not exist if it is not present on the Internet.
Spanish Resources plans to exploit this trend. The tourism industry is in the early stages of being transformed by the Internet. Spanish Resources will passionately focus on the Mexican tourism segments of this industry. The company will bring Mexican resorts and tourist destinations onto the World Wide Web. By creating websites for our clients, we will establish them on the Web at a key moment in the transformation of the tourism industry.
The company will use its marketing resources to define a new niche in the Mexican tourism market. This niche focus will include website design and overall Web strategy for resort operators and other tourist destinations in Mexico. We will then define ourselves as the leader in this niche.
Spanish Resources expects revenue of $751,350 in the first year, $1,441,500 in the second year and $1,807,550 in the third year. Profits for the same time periods will increase steadily.
We expect employee headcount to grow from four to eleven over the first year and to hold steady there after. The company expects paid-in capital of $300,000 to provide more then adequate working capital for the duration of the plan.
The company will provide a turn-key solution to its clients. However, we will rely on multiple outside vendors to supply website implementation and hosting. The company will provide all other aspects of the service.
Our most important objectives are:
- Three major referenceable accounts in the first six months.
- An annual revenue of $1,441,500 in the second year.
- In the first year, at least fifteen mentions of the company in tourism industry magazines and newsletters.
Spanish Resources will remove the language and technology barriers to travel destination operators in Mexico through the use of the Internet in order to reach perspective english-speaking tourists.
We will provide a dynamic and fun work environment with stable, long-term job opportunities that will include exotic travel for some employees and incentive bonuses for all key personnel.
Spanish Resources will be incorporated in the state of Connecticut as a general corporation (Subchapter C).
The company will provide website development services to tourism destinations in Mexico. Although the company has no operating history, the founders, Carolyn and Jerry, have extensive experience in the competencies required for the company to succeed. The company will have a more than adequate amount, with $300,000 investment.
2.1 Start-up Summary
There are three features of the start-up expenses that are worth noting.
First, the research and development expense involves the founders traveling to appropriate destinations to gather first-hand information about the market and market conditions.
Second, the company is investing heavily in sales collateral because of the need to project a strong quality image from the company’s inception.
Third, the company is assuming the need for only a single base of operations.
The company will offer two basic services: creating a basic website, and creating an in-depth website.
The company’s core competencies are an understanding of cultural and linguistic issues and the infrastructure of the World Wide Web. The company intends to partner with firms that are proficient in website implementation, rather than building such an operation internally.
In order to provide a high level of service, the company will have operations in both Stamford, Connecticut and in Mexico. The Stamford operation will serve as headquarters and the point of contact for partner Web design firms. The Mexican operation will support direct sales, after sales support and account management.
3.1 Service Description
The company offers two basic categories of service.
The basic service, which is sold to small resorts and travel destination, provides a simple website. This website will typically include photographs, location and contact details for the destination. In addition, the website will be submitted to all of the Web search engines and be provided to travel- oriented websites.
The basic website is designed to inform Web users about the existence of resorts and travel destinations. This basic level of service is provided for people whose primary goal is establishing a presence on the Web. This service will cost $2,000 to $3,000 dollars.
The in-depth website is designed for large resorts. This site provides everything included in the basic website and adds more depth and interactivity. This form of website will provide more detailed description and images of the resort and its facilities.
In addition, the website will allow users to make bookings, ask for promotional literature to be mailed to them and make other requests directly of the resort operators. The in-depth website goes beyond a presence on the Web, by using the Web to establish the initial relationship with potential guests. We will make the in-depth website available to smaller resorts and other destinations if requested. This service cost $8,500.
We intend to provide ongoing services to basic and in-depth website customers that will include updates and expansions of their site, as well as brokerage for Web hosting services. We expect ongoing services to account for approximately the same dollar amounts as the initial contracts.
Fulfillment for the company relies on both internal resources and our Web designer partners. The company will establish relations with at least two Web design firms.
The company will handle the direct relationships with the clients including all linguistic and cultural issues as well as a collection of imagery, identification of key resort facilities, and a high-level design concept for the website.
The Web design firm will be responsible for converting imagery to computer form, typesetting of text, and other technical website implementation issues. For basic website work, the Web design firm will be paid from $1,000 to $1,500 and for in-depth website work, they will be paid from $3,000-$3,500 dollars.
Market Analysis Summary
The tourism market in Mexico is enormous. In 1998, according to The Bank of Mexico, 19.8 million international tourists traveled to Mexico and spent over six billion dollars.
350 major hotels and thousands of smaller travel destinations serviced these tourists. Increasingly tourists are researching and booking travel using the Internet.
There are 20 travel websites already and this number is projected to increase by 100% by the end of 2001.
The company plans to target the large resorts that don’t yet have a website and expand into the thousands of smaller destinations as the business develops.
The company will approach this market primarily through advertising. Our advertising will serve two different functions.
First, we will use testimonials from reference accounts to expose the benefits of our services to tourism operators.
Second, we will use advertising through trade publications and direct mail to establish a brand that the Mexican tourism industry will associate with high-quality professional services.
4.1 Market Segmentation
We broadly divide our market between resort hotels and other travel destinations. Within resort hotels we segment between 1, 2, 3, 4, and 5 star hotels.
Within other travel destinations we include apartments, bed and breakfast, suits, villas, condos, trailer parks, and bungalows.
Within the category of resort hotels, we define large resorts as being 4 or 5 star hotels.
We define smaller resorts as 3 or 4 star hotels. Please note this analysis counts 4 star hotels twice.
In addition, we have excluded 1 and 2 star hotels entirely. Furthermore the company believes these estimates are conservative because they exclude the major beach resort areas such as Acapulco, Puerto Vayarta, Cancun, Zihuatenejo, Ixtapa, etc.
4.2 Target Market Segment Strategy
The company’s market strategy is to focus on resort hotels and tourist travel destinations in Mexico that meet two important criteria.
First, we are targeting the segments of the market that can afford Web-based promotion.
Second, we are targeting those segments of the market that can benefit from a presence on the World Wide Web.
The company has gathered market data from the official Mexican tourism website. To be conservative, we gathered data that excludes the major beach resort areas.
Many of the major beach resorts already have websites. Although we intend to target those areas as well, for purposes of this analysis, we have left them out of the numerical totals. If they were included, these resorts would approximately double the number of large resorts. Smaller resorts and other travel destinations would also be affected, but by a smaller amount.
Although there are many more 1 and 2 star hotels then any other category, the company decided to exclude them because their segment can neither afford nor benefit from a presence on the World Wide Web.
We decided to include 4 star hotels in both large and small resort segments because we predict that 4 star operators will divide themselves between large and small service offerings.
It is also important to note that many of the 4 and 5 star hotels are controled by resort chains, where as the smaller hotels tend to be individually owned.
Furthermore, 5 star hotels often have affiliations with other travel destinations such as golf courses. Also note that the predicted 10% growth rate was estimated by the company, not by the tourism board.
Home Garden Gifts Online Sample Business Plan
Use this sample business plan to build up and start your own gifts website and online business.
Home Garden Gifts Online Business Plan
G-T Enterprises is owned by E. Gwen Hultquist and her husband, Timothy A. Hultquist. While primarily operating the Web store, Grapevine Country Gifts at www.grapetime.com, the owners are also vendors at consumer gift shows, home and garden expositions, summer fairs and festivals; these events help us to promote the Web store. By the end of the third season, both online visitors and purchases have increased significantly over the previous year, despite the difficulties of a slow recovery of the national economy.
The owners of G-T Enterprises believe that continued growth of the business can be accomplished with:
- Serious revamping of the Web store (already in progress) and increased promotions;
- Sponsoring special community events and fund raisers for local organizations;
- Renovation of an existing building to safely store inventory and set up a more efficient packing and shipping area;
- Increasing the number of shows/events aimed at upscale consumers;
- Purchasing seasonal and regular inventory in larger quantities for better price breaks.
While the sales growth has been anticipated and welcomed, it has come a little late for financial recovery of debts incurred to reach this point. We need financing to renovate the existing storage space (our barn), alleviate the outstanding debts and release credit lines for product purchases and advance payments that are required for space rental at shows, festivals and other market events. In addition, financing will prevent us from missing opportunities for obtaining and selling “ground floor” products before they become available by other merchants on the travel show circuit.
In the local community, there are limited opportunities for unskilled employment for young people. We expect to hire high school students for stocking, packing, shipping, and training on other business activities. These students can benefit from our experience and education, and we hope to be role models for them, encouraging them to further their education or pursue their ambitions of entrepreneurship. In addition, we will be sponsoring special events (i.e., “SummerFest,” 4th of July activities) and fund raisers for local organizations (schools, churches, other groups).
Our two main suppliers manufacture in the United States, so our sales are contributing to keeping jobs in America. We continue to seek out and direct-buy American-made products that we can offer at reasonable prices and receive a fair profit. We also have potential resources, with adequate funding, to obtain quality and highly saleable merchandise appropriate for fundraisers.
We are seeking $40,000 in long-term loans to finance renovation and restoration of the existing barn for use as a warehouse, and to maintain positive cash balances throughout the months we are occupied with the renovation.
Grapevine Country Gifts is a celebration of the home. Our mission is to provide unique and affordable home accents and gifts for the quality- and style-conscious consumer. We will make our products easily accessible with a presence online and at various shows and festivals.
Grapevine Country Gifts takes pride in its customer service, good communication, and guaranteed satisfaction of consumers’ purchases.
Our employees will enjoy a friendly and fair work environment, which rewards hard work and offers opportunities for training in a variety of business activities.
- Continue to provide unique quality home and gift products at reasonable prices on the Internet and at consumer home/gift shows;
- Generate minimum total revenues of $125,000 by the end of year one;
- Expand and maintain Web store to increase revenues to create attractive purchase by year five;
- Realize an annual growth of approximately 45% in year two;
- Realize an annual growth of approximately 20% in year three and each year thereafter; <=”” li=””>
- Establish a following of customers in a specific road show circuit of 24-36 shows per year: Home & Garden Shows, Shipshewana On The Road, Summer Festivals/Arts & Crafts Shows;
- Seek out additional quality products to include in our product mix.
1.3 Keys to Success
The primary keys to success for the company will be based on the following factors:
- Home based facilities that reduce overhead expenses and maximize profit margins.
- Products that provide quality and value to the consumer while meeting needs for an expression of personal style.
- Customer services, such as obtaining obscure and discontinued products (specifically Spoontiques Pin Art and Ear Art), and personalized promotions, so that customers are encouraged for repeat purchases and make referrals.
- Communication with our customer base through email and postcard mailings.
- A visible, accessible and welcoming Web store to position us as the preferred choice for our products and services within the marketplace on the Internet and local communities in our 4-state region.
- Practice of daily management tactics, so that a successful and growth-oriented business is developed and maintained.
Grapevine Country Gifts is an Internet-based Web store spun off by G-T Enterprises. It began as an experiment for the design of an e-commerce site after a G-T customer refused to pay for development of a similar site because, “it wasn’t making any money,” within the first four days of implementation. Launched in January of 2000, the site was submitted to search engines about four months before search engines began charging for submission. Even though the site began attracting visitors, sales were slow at first, due in part to an inadequate (but costly) payment processing system which has since been replaced. With this early system we often had to meet suppliers’ minimum order requirements in order to fill a single customer’s order, as inventory levels were being built.
Our new system is much more efficient, and the higher sales volume we are now processing has streamlined our inventory management. Last year’s sales revenues were more than 6 times higher than sales the year before that. We expect continued growth, at a much slower pace, in the foreseeable future.
2.1 Company Ownership
G-T Enterprises is currently a partnership owned by the married couple E. Gwen Hultquist and Timothy A. Hultquist. Gwen Hultquist is the majority owner and manager for both G-T Enterprises and Grapevine Country Gifts. Tim Hultquist is sole owner and manager of Technical Computer Support (TCS), a small-business computer consulting company for sales, installation, integration, networking, maintenance, and support, which is not part of this business plan. The owners both hold Bachelor of Business Degrees from Western Michigan University, Kalamazoo, Michigan and have had several years’ of management experience prior to self-employment.
This business plan is based upon the consolidation of Grapevine Country Gifts (the Web store) into the pre-existing G-T Enterprises, which has so far focused on selling similar products through road shows. These endeavors are very similar, and combining them under the same company will greatly simplify our financial and marketing strategies, by treating them as different revenue streams in a unified plan. The larger G-T Enterprises will remain a partnership between the Hultquists, with Gwen as the majority owner.
2.2 Company History
G-T Enterprises began in 1999 as a website consultation, design and development firm for small- to medium-sized businesses. Various events led to the addition of the Web store, “Grapevine Country Gifts and Collectibles” (now simply, “Grapevine Country Gifts”), selling primarily Pin Art, Ear Art and miniature lighthouse replicas by Spoontiques©. We added hand painted Artistic Glass by Artistic Gifts© and other miscellaneous products from various vendors. In the spring of 2002, as a means of promoting the Web store, we began exhibiting and selling our products at consumer gift shows and home shows in a four-state area. “Newbies” in this area of commerce, the first show was a complete bust with the exception of gaining valuable experience in evaluating shows and developing organizational skills for setup and booth layout.
Operations of the business are conducted on our 100-year-old family farmstead, now reduced to approximately five acres. A 16′ x 24′ barn and a smaller antique outbuilding were converted and renovated for office/work shops. The three-story barn was re-roofed in 1995, along with the house. It is structurally sound, but requires extensive restoration and renovation for use as storage for product warehousing, packing and shipping. The home-based operations greatly reduce our overhead expenses and a fair portion of utilities and other related household expenses can be charged as business expense.
G-T Enterprises’ start-up capital of $1,000 was originally provided by E. Gwen Hultquist. Her husband, Timothy A. Hultquist, has, among other things, supported the company financially, mostly by providing ‘no-interest’ short-term loans to cover working capital requirements. At the starting year of the current business plan (FY2004), Mr. Hultquist has provided a total of $20,000 of no-interest loans that need to be repaid within three years.
Grapevine Country Gift’s product line is extensive. We offer basically the entire Spoontiques vendor catalog of several thousand items, although we concentrate on several popular designs of Pin Art, Ear Art, step stones, and other unique items. Artistic Gifts has many designs of art glass in seven sizes, most of which are featured on the Web store. Because of the large quantity of items and styles, it is not feasible to inventory all products; our website features those products we know to be bestsellers. However, any of these items can be purchased from Grapevine Country by special order, either at shows, by phone, or online. Artistic Gifts will drop-ship for a nominal fee.
Because of the relatively long lead time between a customer’s order, arrival of the goods and subsequent shipment to the customer, Grapevine Country has found that certain items maintain a marked popularity and we stock these items ready for immediate shipment. Wholesale value of inventory is approximately $6,000 at any given time. G-T Enterprises constantly searches for unique products that will offer value, fun, and appeal based on interests shown at shows and search strings in the Web store statistics.
Our products focus on personal style and interests. Spoontiques Pin Art and Ear Art are novel theme-based designs that excite buyers to purchase either for themselves or as gifts for someone else. The monkey and moose earrings are bestsellers, with anything in frogs or cats following closely. Our secondary product lines change as we find exceptional values. Summer show products are concentrated on products for the entire family and children as well as the home and garden décor and personal gifts.
Market Analysis Summary
Our target market is women over age 40, with household income over $60,000. With high disposable income, mature adults (empty nesters) redecorate their homes to reflect their tastes more than was possible when there were young children in the home.
Last year in the U.S., female consumers produced the highest growth rate in online sales, accounting for 52% of online purchases, an increase of 5% over 2002. Nearly 54% of those purchasers are in our target age group. Gifts and flower sales online were up 56% this holiday over last. Home and garden purchases were the top category in the 2003 holiday buying season, experiencing a 27.9% increase over 2002. This female target market is the primary purchaser of household gifts and home décor. The mature audience shopping online is expected to increase by 16%, compounded, per year through 2008. (Network World Fusion, Jan, ’04, U.S. 2000 Census; Jupiter Research, Feb,’04)
4.1 Market Segmentation
As stated above, the company’s target audience is women over 40 with a household income over $60,000. In terms of sales channels, we believe that about half of our target clientele will be reached through our website, with the other half split between the ones we reach via our participation in road shows and special events. We also forecast that the pool of potential web clients will grow at the fastest rate (at 20% annually), while the client base for road shows and special events will be growing at 15% and 10%, respectively, as summarized in the table below.
4.2 Target Market Segment Strategy
We know that the target market segment we have selected is already predisposed to seek out our products. Comfortably well-off women over 40 make up most of those attending home and garden and other shows at which we exhibit our products. Our presence at these shows has increased monthly visits to our website by 413% in the past year.
While online purchases by women over 40 continue to rise, publications by Jupiter Research in February, 2004, project that similar women over 60 will be expanding their Internet experience and expenditures at even higher rates in the near future. By expanding our presence on other shopping sites, we will continue to increase our access to this group. Linking with other popular sites through a LinkShare program will not only provide additional revenues with “click-through” purchases, but associate Grapevine Country Gifts with other quality merchants on the Internet frequented by our target market.
Home redecoration allows women to reflect their tastes and use their creativity to make their homes truly special to them. Quite often this means that a woman looks for some rare, limited-edition item that will bring comfort to her home and peace in her mind. Although home decor products are carried by many retailers, out-of-stock items are hard to find, since few stores special-order items. While a few hard core collectors find the thrill of searching for rare items appealing, most of our customers who would like to decorate their homes favor convenient ordering and reasonable prices.
4.3 Industry Analysis
Post-2003 retail sales reports indicate that economic concerns and comfort levels for buying on the Internet are improved. Holiday sales, exceeding projections, were up 29.5% over 2002 – reaching $12.5 billion (excluding travel and auctions). (Network World Fusion, Jan. ’04) Although predictions for retail sales growth in 2004 are a little slow in coming, the recovery can be seen in sales bursts on the web and increased sales at Spring shows.
4.3.1 Competition and Buying Patterns
Competition for jewelry and home décor is stringent on the Internet and at consumer shows. Many online and traveling merchants have been in existence for a longer period and have established recognition. Our products are also carried in fine gift shops, such as Hallmark stores, and in major department stores. Many of our competitors have additional advantages because of their greater size, which allows them to more easily absorb losses on unpopular products.
Our targeted consumers are seeking convenience and value in their purchases. They want a wide selection to reflect their own individual styles, and easy purchase processes at good prices. Our switch to an easier payment process has shown how important it is to our customers to have a secure, transparent, and reliable purchase process with good customer service. This one change is responsible for at least half the strong sales growth we have seen in the last year.
Customers who come to shows and festivals where we exhibit are also seeking convenience and value, but our competition at these shows is largely the other vendors. A potential customer arrives with at least a subconscious notion of how much she is willing to spend, and on what, while at the event. Sales made by other vendors are money taken out of our pockets. Competition here is about value, attractiveness of displays, good selection, and friendly, in-person interactions.
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