Having a well-crafted Airbnb business plan is the best way to set your business up for success from the get-go. It outlines your business goals, operations plan, and the timeline for accomplishing all of this.
After all, you don’t want to be flying blind when it comes to the vacation rental industry.
Try not to get too overwhelmed: it’s easier to write a business plan than you might think. In this article, we explain why having a business plan for Airbnb hosting is important, offer best practices for writing an effective one, and provide a free Airbnb business plan template to download.
Don’t see the form to download our Airbnb Business Plan? Click here.
An Airbnb business plan is a living document that outlines the direction you want your business to go in and strategies for getting it there. It will include details such as your target market and customers, financial plan, and goals and milestones.
You’ll be referring to your business plan often as you work to open your Airbnb, so be sure to be as detailed as possible.
Airbnb business proposal vs. business plan
We sometimes see people get confused between Airbnb proposals and business plans.
To be clear, a business proposal is a document that explains how a company’s product or service can meet a specific customer’s needs. Its goal is to attract customers.
You might need an Airbnb business proposal if you were, say, trying to get investors for your Airbnb business. However, chances are that what you’re really looking for is a business plan.
Why do you need a business plan for Airbnb hosting?
A well-thought-out business plan for Airbnb is the roadmap you’ll use to steer your business into the future. Here are just a few reasons why you should consider writing a business plan for your short-term rental property.
Helps you meet your goals
It’s easy to get sidetracked while trying to grow your business.
Of course, entertaining new ideas is never a bad thing. But having your original vision in writing
will ensure you don’t deviate too far from what you truly want to achieve. It motivates you to move forward and gives you something to measure progress against, too.
Prompts you to make important decisions
You’re going to have to reflect on your operations strategy, competition, future guests, and more when you sit down to write your business plan.
You may find some of the difficult decisions you’ve been putting off coming up in this process. Now is the time to face them head-on.
Don’t sweat this too much. Remember that you can always come back to your business plan and adjust as you go. It’s an ever-evolving document!
Gives you the framework to communicate your business to others
We all like to think we can handle things on our own. However, the time will come when you’ll need help to run your business, be it from a business partner, investor, or assistant.
When that time comes, you need to be able to clearly and confidently communicate what you’re doing and where your business is headed. It wouldn’t make any sense to order an Uber and not tell the driver where to go, right?
Not to mention that an Airbnb business plan saves you the headache of having to explain every nuance of the business to the person you’re bringing on board. Forward the document and let it speak for itself.
How to write a business plan for Airbnb: best practices
Now you know why having a business plan for Airbnb hosting is so important. But how do you go about writing one?
Grab a cup of coffee and pull up a chair. Let’s go over some best practices.
Brainstorm a mission statement
Contrary to popular belief, mission statements are not reserved for major corporations. Before you even start writing the business plan itself, consider writing an Airbnb mission statement for your business.
A mission statement is simply a concise explanation of the business.
Think about how you would explain what you’re doing to a friend at a cocktail party without losing their attention. What vision do you have for the business? Why is this important to you? What value do you provide to your customers?
Take some time to reflect, but keep in mind that mission statements are meant to be quick and to the point.
Airbnb mission statement examples
Here are some examples of Airbnb mission statements for inspiration:
“The Cozy Cottage provides budget-friendly accommodations to travelers seeking to enjoy the natural beauty of our neighboring national park.”
“The Little Apple is an eco-conscious studio that gives guests unparalleled access to downtown Manhattan at competitive rates.”
“The Malibu Oasis offers the ultimate in luxury with a beachfront property, high-end amenities, and services tailored to our guests’ specific needs.”
Recognize your audience
Who will be reading your business plan?
The language you would use with one audience may not be appropriate for another. You might even consider writing different versions of your business plan for different audiences.
For example, a version geared toward investors might use more formal terminology. A version created for a future business partner, on the other hand, might be more casual.
Tap into the power of self-reflection
Starting an Airbnb business is a huge undertaking! Making sure you are ready to take it on is just as important as having a sound business plan.
Take inventory of what skills you already bring to the table and what things you will have to learn along the way. Are there things you should outsource to lighten your load? Do you feel prepared to take the next step with your Airbnb business?
Acknowledge any uncertainties now before you get started. It’s a great way to be honest with yourself and boost your confidence!
Should you push yourself to think big? Absolutely!
Should you set unrealistic and unattainable business goals? Not so much.
It’s all about striking a balance between dreaming big and keeping your feet on the ground. Take into account anything that might go wrong so you aren’t blindsided later on.
What to include in your Airbnb business plan
When it comes to writing a business plan, Airbnb is just like any other business. That’s to say, there are certain things you absolutely must include!
Take a look at our list and stay tuned for our free downloadable business plan template for Airbnb.
An Airbnb executive summary consists of a short description of your Airbnb business. People should be able to read your executive summary and know, at a glance, what your business entails.
To begin, ask yourself the famous five Ws to ensure you cover all the key information:
You broadly detailed where your business is going with your executive summary. Now, you need to further solidify your vision in your goals section.
Are you satisfied with a couple of bookings a month? Or are you expecting a full reservation calendar by the end of the year? You’ll need to set goals to help pin this down.
It might sound elementary, but setting S.M.A.R.T. goals will help your business make progress. Is your business goal specific, measurable, attainable, relevant, and timely?
Setting good goals is the basis for any successful Airbnb business plan.
Unique selling points
As with any business, you’ll need to detail the unique selling points (USPs) your Airbnb will bring to the existing market. That is, why are customers going to choose your Airbnb over the competition?
Thankfully, finding your USPs is much easier than you might think. Simply analyze your business and consider how your Airbnb provides a better guest experience than other properties in your area. Ask questions such as:
Are the interiors of your property different or better than the rest?
After all, once you are confident in your strengths, your guests will be, too!
Your guests are how you are ultimately going to make your money. So, it’s incredibly important to understand and target them properly.
This starts with creating buyer personas to outline the types of guests you want to attract. As profiles of your ideal customers, buyer personas should be as detailed as possible to help your business grow down the road.
When considering your ideal guests, ask yourself questions such as:
What’s their name?
What do they do for work?
How old are they?
Do they have a family?
Understanding and visualizing your ideal guests enables you to prepare for their specific needs and pain points.
For example, if you’re tailoring to young digital nomads, you’ll want to offer fast and reliable Wi-Fi, a designated work area, and suggestions for laptop-friendly cafes in the area. If your ideal guests are families with young children, on the other hand, you’ll want to make sure your property is child-safe.
It’s not all about your own business. No business plan is complete without some competitor research as well.
Do they offer a wide range of amenities in the house?
Explain which marketing strategies you will use to target your key markets and achieve bookings. Think about both offline and online marketing, as well as any campaigns or promotions you plan to run externally.
This is when the buyer personas you created earlier will come in handy. If you know the people you’re trying to target, you’ll know what type of marketing will be suitable for them.
Here are some questions that can help you sketch out your marketing plan:
How are you going to finance your Airbnb? You’ve probably given this lots of thought by this point (or even stayed up at night stressing about it).
But now it’s time to get serious. Will you self-finance your Airbnb or take out a loan? Is financing unnecessary because you’re simply renting out a spare bedroom?
These questions form your financial plan. As we all know, money doesn’t grow on trees—so you need to know where yours will be coming from. To that end, estimate your expenditures and projected income for the first five years.
So, what kind of information makes up a financial plan?
Will I need to take out a loan?
What will the interest rates be?
Do I have savings I’m ready to invest into it?
What level of monthly loan payments can I manage?
Milestones and goals
When you start any project—whether it’s going back to school, losing weight, or starting a business—tracking your progress is essential.
So, outline your plans and goals for your business, plus what key milestones will help you achieve these targets. You can refer back to this section later on to ensure you’re on the right track.
Here are some good milestones to use for your Airbnb business:
How much do I want to make each month?
How many guests do I want in the first quarter?
What rate of growth do I want in my bookings year-over-year?
Mistakes to avoid when writing an Airbnb business plan
Like we mentioned above, your business plan is a living document. So, you don’t need to worry about making it perfect on the first try. And you will have to update it over time.
That being said, you’d do well to avoid these common mistakes the first time around.
Don’t be too vague
Avoid making big, vague claims that you can’t quantifiably measure. Claims like this will only make it harder to see where you’ve succeeded and where you can improve.
After all, the point of a business plan is to give your business a sense of direction. Your future self will thank you for being specific about your goals and plans.
Also, don’t be too specific
We know—we just told you the exact opposite. But hear us out.
If you get too specific in your plan, you don’t leave yourself very much wiggle room. Yes, you want to have a clear direction of where your business is going. But you don’t want to close yourself off to other possibilities.
Be firm about the destination (your business goals) but flexible about the journey (how you will achieve those goals). There’s a sweet spot in there somewhere.
Airbnb business plan example
Sometimes the easiest way to get started is to see examples of others’ work. We’re also providing an Airbnb business plan template you can follow below. But in case it helps, here’s a sample business plan for Airbnb, based on the fictional business of “the Cozy Cottage”:
Executive summary: The Cozy Cottage is a cottage located in the small town of Green Meadows. The Cozy Cottage is perfect for couples and small families looking to enjoy the natural beauty of the greater Green Meadows area.
Operations plan: I will be able to manage guest communications and turnover myself, as I am semi-retired and live on the property adjacent to the Cozy Cottage. I’ve contracted a local accountant to handle my finances.
Business goals: We intend to have every weekend booked by the end of the year, and a full reservation calendar within six months of opening.
Unique selling points: The Cozy Cottage’s location (equidistant between the historic downtown and the nearby national park) is especially attractive to visitors. The property also provides a fully stocked kitchen, making it ideal for longer stays.
Target customers: The Cozy Cottage has one bedroom with a queen bed, as well as a sofa bed in the living room. The space’s size and offerings make it perfect for small families or couples.
Competitor analysis: Green Meadows has only recently become a popular tourist destination, meaning that competition is still scarce. Most existing Airbnbs in the area have higher price points and cater to larger groups. We plan to differentiate ourselves by catering to smaller groups and offering similar amenities at lower prices.
Marketing plan: Our initial marketing plan consists of tapping into Airbnb’s customer base, posting on Facebook and Instagram, and distributing print materials in local businesses.
Financial plan: The property on which the Cozy Cottage sits is already paid off, as it was part of a family estate. The initial investment for furnishing, decorating, and stocking the Airbnb will come out of my personal savings. According to my projections, the Airbnb should be paying for itself within one year of opening.
Milestones and goals: We hope to be booked every weekend by the end of the year and self-sustaining within one year of opening.
Your own business plan will likely be longer, much more detailed, and backed by real data. However, this Airbnb business plan sample should give you an idea of what your own document might look like.
Download our free Airbnb business plan template
We’ve created a free Airbnb business plan PDF that you can download and customize to get started. This business plan template for Airbnb was designed with three specific pain points in mind:
Why do I need a business plan in the first place?
What do I need to do before I can start creating my business plan?
What should I include?
Fill in the form below to download our Airbnb business plan template free of charge!
Don’t see the form to download our Airbnb Business Plan? Click here.
Disclaimer: Lodgify is an Airbnb Preferred Software Partner. This post, including any claims or statements within, is solely from Lodgify and is not endorsed by, directly affiliated with, authorized, or sponsored by Airbnb in any way.
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