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, operation plans, 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 is easier to write a business plan than you may think. This article gives you a rundown of why having an Airbnb business plan is important, the tips and tricks to writing a successful one, and our free Airbnb business plan template to download.
Don’t see the form to download our Airbnb Business Plan? Click here.
Thinking it isn’t necessary to have a business plan? Well, we hope we can change your mind. A well-thought-out Airbnb business plan is like the road map you will rely on 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 stay on track towards your goals
It is easy to get sidetracked and fall down unnecessary rabbit holes while trying to grow your business. Though it is good to entertain new ideas, getting clear on your goals and having them in writing will make sure you don’t deviate too far from what you truly want to achieve. It helps you continue to move forward and motivates you to think of new goals too. Plus, it’s a tangible way to celebrate your achievements… kind of like having an accountability partner but on paper.
Prompts you to make important decisions
When you sit down to write your Airbnb business plan, you will have to reflect on a lot of different questions about your goals, operation strategy, competition, and future guests. You may find some of the difficult decisions you’ve been putting off coming up in this process… now is the opportune time to face them head-on. Don’t sweat this too much. 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
As much as we all like to think we can do everything on our own, you will eventually arrive at a point of needing to involve someone else. It could be a business partner, an investor, an assistant, etc. When that time comes, you need to be able to clearly and confidently communicate what you’re doing and where the 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 having an Airbnb business plan saves you time and money by not 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 first before answering more in-depth questions.
Tips & tricks to write a successful Airbnb host business plan
Now you know why having an Airbnb management business plan is so important, but how do you go about writing one? Grab a cup of coffee and pull up a chair, let’s go through it together.
Brainstorm a mission statement
Contrary to popular belief, mission statements are not reserved for major corporations. Before you even start writing the plan itself, consider writing a mission statement for your Airbnb 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 it’s meant to be quick and to the point.
Recognize your audience
Who will be reading your business plan? The language you would use with one audience may not be appropriate for a different audience. You might even consider writing different versions of your Airbnb management business plan for different audiences. For example, you could have one plan geared towards investors that utilizes more formal terminology and one plan for a future business partner that takes a more casual tone.
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 can/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 jump off the deep end of being an Airbnb host. 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 and prepare for what things might go wrong so you aren’t blindsided later on.
What to include in your Airbnb business plan
Let’s get to the most important step; actually writing your business plan! Take a look at our list of what things to include in your Airbnb business plan and stay tuned for our free downloadable Airbnb business plan template.
Write your executive summary
An executive summary is just a few short sentences that sum up your Airbnb business, and include all of the most important information you want to get across to your guests and others. This is so that anyone can read the first page of your plan and know, at a glance, what your business entails.
To begin, it might be easier to start by asking yourself the famous five W’s: Who? What? When? Where? Why? This will help you get in the key information, without panicking that you’re missing something.
Ask yourself the following questions:
Who is my Airbnb for (groups of friends, families, couples, etc)?
What is it (family holiday home, beachside condo, bachelor pad, etc)?
When is it best to stay at my rental (summer, winter, weekend, etc)?
Where is my vacation house located?
Why should they book my property?
This will help you outline what information you would like to include in your executive summary, which you can then rewrite to make sure it sounds professional and eye-catching to the reader. When in doubt, take a look at other Airbnb business plans from other hosts for direction.
Draft an operations plan
The operations plan is an insight into how you are going to run your new business on a day-to-day basis. It will take into consideration things like whether you will be hiring any staff, what standards you will set, how you will keep track of inventory, and other administrative duties.
This is going to be one of the most straightforward parts of your business plan, as chances are, you already have all of this planned in your head.
Here are just a few helpful prompts and examples in case you get stuck:
Am I going to hire any staff or run the business myself?
Your executive summary is going to give you a broad overview of where your business is going, but the goals section will help to further solidify this vision. 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 to achieve success. Is your business goal smart? Is it measurable? Attainable? Relevant? Time-based? Setting good goals is the basis for any successful Airbnb business plan.
Get clear on your Unique Selling Points
As with any business, you’ll need to state why customers are going to choose your business over the competition. Consider how your vacation rental will provide a guest experience that the other properties in your area simply can’t provide.
In this section, you should aim to explain the Unique Selling Points (USP) of your Airbnb business, outlining the unique characteristics and offerings it will bring to the existing market.
Performing a short analysis of your company and finding your USP is much easier than you think. All it takes is asking yourself a few simple questions to figure out how it is you’re different (and better) than other Airbnb properties out there. After all, once you are confident in your strengths, your guests will be, too!
Here are a few examples:
Is it better than others because of its location?
Is the price of your accommodation better?
Are the interiors of your property different or better than the rest?
Define your ideal guest
Your guests are how you are ultimately going to make your money. That’s why it’s so important to understand them and target them properly.
In your plan, be sure to create different buyer personas based on the types of guests you want to attract. This is like a profile of your ideal customer, from their age to their income. You should try to make it as detailed as possible because this will help your business grow later on. These buyer personas will be used time and time again in all aspects of your business to help you achieve more bookings.
Here are some short, key questions you should be asking yourself about your ideal guest:
What’s their name?
What do they do for work?
How old are they?
Do they have a family?
Sometimes old cliches can be true – if you fail to prepare, you prepare to fail! Through this, you’ll be able to understand things like common complaints you will face, likes and dislikes they have in a property rental, and amenities the travelers will expect to find within the property.
If your ideal guest is a young digital nomad, you’ll want to focus your attention on having fast, reliable WiFi, a designated work area, and maybe suggest the best cafes to work from in the area. Whereas if your ideal guest is a big family with little kids, you want to make sure the property is child-safe.
Understand your competition
As well as focusing on your own Airbnb business, one element of your business plan is carrying out some competitor research. Take a look at the market to find your direct competitors and analyze them to see how your business can thrive.
With competitive analysis, you want to look at all of the people who may win a booking over you and use what you find to put yourself on top.
How much are my competitors charging per night?
What standard of accommodation do they offer?
Do they offer airport transfers/pick-up services?
Do they offer a wide range of amenities in the house?
Outline a marketing plan
Explain which strategies you have decided will be best to use when targeting your key markets to achieve bookings. Think about both offline and online marketing, as well as any campaigns or promotions you plan to run externally.
Your marketing plan is basically just how you’ll advertise your business to customers and how you’ll generate bookings. This is when your buyer persona (that 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. This is where you begin to build your brand.
Here are some questions that can help you sketch out your marketing plan:
What methods of online marketing should I use?
What methods of offline marketing should I use?
Do I have a website?
Do I have business cards?
Spell out your financial plan and goals
Think about how you are going to finance your new business. Of course, you’ve asked yourself this question many times, ‘How am I going to afford this Airbnb business?’ Will it be self-financed or are you planning on taking out a loan? Do you have no plan to spend any money because you’re simply renting out a spare bedroom?
These questions form your financial plan. It is basically just writing out, ‘Well, how am I going to pay for all of this?’ As we all know, money doesn’t grow on trees. Note down your estimates of expenditure and projected income for the first five years. As with anything in life, proper budgeting and planning your finances will prevent any stress in the future, and it will mean that your business is ready to thrive.
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?
Define your milestones and where the business is headed
Write down explicitly what your plans and goals are for your business, plus what key milestones will help you achieve these targets. When you start any project, whether it is going back to university, losing weight, or starting a business, it is really important to track your project and also to track your progress. This section will be useful to refer back to and to ensure you’re on the right track.
For your Airbnb business, here are some good milestones to use:
How much do I want to make a month?
How many guests do I want in the first quarter?
What rate of growth do I want in my bookings year-on-year?
How many returning clients do I want each year?
Mistakes to avoid when writing an Airbnb business plan
We’ve talked about things you should include in your plan, but what mistakes should you avoid? Thankfully, your business plan is an ever-evolving document so you don’t have to stress too much about making it perfect on the first try. It’s important just to get your thoughts down on paper first before refining and adjusting as necessary. That said, here are a few mistakes you should avoid when writing your Airbnb business plan.
Don’t be too vague
After all, the point of an Airbnb business plan is to give your business a sense of direction. Avoid making big, vague claims that don’t have quantifiable ways to measure success. It will make it harder to keep the forward trajectory of your business and identify in which areas you are succeeding and where you can improve. 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 (whether that’s in how you want to operate, who your ideal guest is, etc) you don’t leave yourself very much wiggle room. Yes, you want to have a clear direction to launch your business into the future, but you don’t want to close yourself off to other possibilities.
We all know just how much life can ebb and flow over time. Be firm about the destination (your business goals) but flexible about the journey (how you will achieve those goals). As you can see, there is a sweet spot somewhere in there.
Download our free Airbnb business plan in PDF
To help you get started, we’ve created an Airbnb business plan example in PDF that you can download and customize for free. The Airbnb business plan sample was designed with three specific pain points in mind:
Why do I need one in the first place?
What do I need to do before I can start creating my business plan?
What should I include in my Airbnb business plan?
Fill in the form below to download our Airbnb business plan template in PDF and get your vacation rental business off to a good start!
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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