A self-catering accommodation business is a type of hospitality business that provides holiday or temporary accommodation where guests are responsible for preparing their own meals.
This type of accommodation typically includes apartments, cottages, villas, cabins, or any other type of lodging that provides guests with a fully equipped kitchen or kitchenette, allowing them to cook their own meals instead of relying on a restaurant or room service.
Self-catering accommodation businesses can be operated by individuals or companies, and they often offer guests more space and privacy than traditional hotels. Guests can enjoy the flexibility and freedom of preparing their own meals and managing their own schedules.
These types of accommodations can be found in various locations, including urban areas, rural areas, and tourist destinations.
Steps on How to Start a Self-Catering Accommodation Business
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Conduct Market Research
To conduct market research for a self-catering accommodation business, you need to identify your target market, research your competition, understand your guests’ needs, analyze industry trends, determine pricing and revenue potential, and gather feedback.
By conducting thorough market research, you can create a successful self-catering accommodation business that meets the needs of your target market and provides a unique value proposition to your guests.
Once you have launched your self-catering accommodation business, gather feedback from guests to understand what they enjoy and where you could improve. This will help you refine your business and better meet the needs of your target market.
a. Who is the Target Market for a Self-Catering Accommodation Business?
The target market for a self-catering accommodation business includes a variety of travelers who are looking for an affordable and comfortable accommodation option. Here are some of the key groups that may be interested in self-catering accommodation:
- Families
- Budget-conscious travelers
- Long-stay travelers
- Group travelers
- Adventure travelers.
b. Is a Self Catering Accommodation Business a Profitable Business?
A self-catering accommodation business can be profitable if it is managed well and has a strong demand in the market. The profitability of this type of business depends on various factors such as location, occupancy rates, seasonality, competition, pricing, and marketing strategies.
c. Are There Existing Niches in the Industry?
No, there are no existing niches when it comes to the self-catering accommodation business because the self-catering accommodation business is a niche idea in the hospitality industry.
d. Who are the Major Competitors?
- Airbnb
- VRBO
- HomeAway
- FlipKey
- Booking.com
- TripAdvisor
- Expedia
- TurnKey Vacation Rentals
- Vacasa
- Luxury Retreats
- Beach House Rentals
- Outer Banks Blue
- Myrtle Beach Vacation Rentals
- Wyndham Vacation Rentals
- Sunriver Resort
- Keystone Vacation Rentals
- 360 Blue
- RedAwning
- Natural Retreats
- Evolve Vacation Rental.
e. Are There County or State Regulations or Zoning Laws for a Self Catering Accommodation Business?
Yes, there are county and state regulations as well as zoning laws that apply to self-catering accommodation businesses in the United States. These regulations vary depending on the state and county where the business is located.
Some states and counties have specific requirements for short-term rentals, which include self-catering accommodations. These regulations may cover zoning requirements, business licensing, tax obligations, and safety standards, among other things.
For example, some counties may require a special permit or license to operate a self-catering accommodation business. Others may impose restrictions on the number of guests allowed or the length of stays. It’s essential to understand the local regulations and zoning laws in your area to ensure compliance with all requirements.
It’s also essential to note that some homeowner associations or condominiums may have their own regulations regarding self-catering accommodations, so it’s crucial to check with the relevant authorities before starting a self-catering accommodation business.
f. Is There a Franchise for a Self-Catering Accommodation Business?
Yes, there are franchise opportunities for self-catering accommodation businesses, and here are some of them;
- Staybridge Suites
- Home2 Suites by Hilton
- Candlewood Suites
- TownePlace Suites by Marriott
- Hyatt House
- Residence Inn by Marriott
- Suburban Extended Stay Hotel
- WoodSpring Suites
- MainStay Suites
- Value Place
g. What Do You Need to Start a Self-Catering Accommodation Business?
- A Feasibility Report
- Business and Marketing Plans
- Business Licenses and Permits
- Accommodation Facility
- EIN (Employer Identification Number)/Federal Tax ID Number.
- A Corporate Bank Account
- Employees
- Startup and Working Capital
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Choose a Memorable Business Name
When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.
Some of the catchy business name ideas suitable for a self catering accommodation business are;
Creative Self Catering Accommodation Business Name ideas
- The Nesting® Place
- Joel McKenzie® Lodge
- Homey Haven®
- Rest & Nest® Accommodation
- Oasis™ Suites
- The Jones Cottage
- Comfort Corner
- The Cozy Cabin
- Frank Edwards® Accommodation
- Homestead® Hospitality Company
- Famous Lodge
- The Cozy Nest
- Eagles Accommodation
- Harbor House
- The Serene Suite
- The Tranquil Villa
- The Cozy Lodge
- Camp David® Accommodation
- Seaside Serenity
- The Cottage Place.
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Register Your Business
a. What Type of Business Structure is Best for a Self-Catering Accommodation Business?
The type of business structure that is best for a self-catering accommodation business depends on various factors such as the size of the business, the number of owners, and the level of liability protection desired. However, we usually recommend an LLC for a self-catering accommodation business.
An LLC is a popular business structure for self-catering accommodation businesses because it provides limited liability protection for the owners, while also offering flexibility in terms of management and taxation. LLCs are relatively easy and inexpensive to set up and maintain, and they offer pass-through taxation, meaning that the business’s profits and losses are reported on the owners’ personal tax returns.
b. Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open a Self-Catering Accommodation Business?
- Business License
- Zoning permit
- Building permit
- Fire and health permit
- Signage Permit
d. What Type of Certification is Needed to Open a Self-Catering Accommodation Business?
You don’t need any certifications to open a self-catering accommodation business.
e. What Documents are Needed to Open a Self-Catering Accommodation Business?
- DBA
- EIN
- Business and liability insurance
- Federal Tax Payer’s ID
- Certificate of Incorporation
- Business License
- Business Plan
- Operating Agreement for LLCs
- Insurance Policy
- Building permit
- Health and Fire Permit
- Zonal Permit
- Signage Permit
f. Do You Need a Trademark, Copyright, or Patent?
Generally, self-catering accommodation businesses do not require a patent. However, trademark and copyright protection may be relevant for certain aspects of the business. Self-catering accommodation businesses may consider trademark protection for their business name, logo, or other branding elements to prevent other businesses from using similar names or designs.
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Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Self-Catering Accommodation Business?
The cost to start a self-catering accommodation business can vary widely depending on factors such as the size of the business, location, equipment, and furniture needed, staffing costs, marketing expenses, and more. However, a rough estimate could range from $2 million to $20 million or more, depending on the size and scope of the business.
b. What are the Costs Involved in Starting a Self Catering Accommodation Business?
- Legal and administrative costs (the cost of obtaining business licenses and permits, registering the business, and consulting with attorneys and accountants): $22,500
- Equipment and furnishing: $1 million
- Staffing costs: $35,000
- Facility: $15 million
- Marketing and advertising costs: $6,000
- Insurance costs: $88,800
- Miscellaneous Expenses: $15,000.
c. What Factors Determine the Cost of Opening a Self-Catering Accommodation Business?
- The size of the self-catering accommodation facility and the number of flats or rooms
- The choice of location
- The required licenses and permits
- The cost of hiring and paying a business consultant and attorney
- The cost of branding, promotion, and marketing of the self-catering accommodation business
- The cost of furnishing and equipping the self-catering accommodation facility
- The cost of the insurance policy covers
- The cost of registering the business
- The cost of recruiting and training your staff
- The cost of the grand opening of the self-catering accommodation business.
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
The decision to build a facility for your self-catering accommodation business depends on your business model and goals.
One of the options you have is to rent an existing facility and convert it into self-catering accommodation. This option may be less expensive than building a new facility, but it may also come with limitations, such as a lack of control over the space’s layout or design.
Building a new facility may provide the most control over the design and layout of the self-catering accommodation, but it also comes with the highest cost. The cost of building a new facility can vary widely depending on factors such as the size of the space, location, materials used, and labor costs.
According to a report from Building Journal, the average cost to build a commercial building in the United States is around $16 to $20 per square foot for simple structures and $40 to $60 per square foot for more complex structures.
e. What are the Ongoing Expenses of a Self-Catering Accommodation Business?
- Utilities such as electricity, gas, internet service, water, and sewage.
- Property Maintenance
- Taxes
- Property Taxes.
- Cleaning Supplies
- Staffing costs (employee salaries, benefits, payroll taxes, and workers’ compensation insurance.)
- Marketing and advertising
- Insurance
- Accounting and legal fees (such as bookkeeping, tax preparation, and contract review)
f. What is the Average Salary of your Staff?
- Chief Executive Officer (Owner) – $55,000 per year
- Facility Manager – $38,000 per year
- Accountant/Cashier – $35,0000
- Marketing and Sales Officer – $35,000 per year
- Attendants – $35,000 per year
- Cleaners – $22,000 per year
- Security Officers – $21,150 per year.
g. How Do You Get Funding to Start a Self Catering Accommodation Business?
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks
- Pitching your business idea and applying for business grants and seed funding from the government, donor organizations, and angel investors
- Source for soft loans from your family members and friends.
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Write a Business Plan
a. Executive Summary
Homestead® Hospitality Company is a self-catering accommodation business that aims to provide a comfortable and affordable accommodation option for travelers visiting the Orlando, Florida area. Our property is a recently renovated 25-room building, located in a prime location in Orlando, Florida with easy access to popular tourist attractions and transportation.
Our self-catering accommodation is designed to provide guests with a homely and relaxing atmosphere. Each room is equipped with modern amenities, including high-speed Wi-Fi, air conditioning, and a fully equipped kitchenette. We also offer shared spaces such as a lounge area and a garden, where guests can relax and socialize with other travelers.
Our target market includes travelers who are looking for an affordable and comfortable accommodation option in the Orlando, Florida area. We plan to reach these customers through a combination of online marketing, social media advertising, and partnerships with local tourist attractions.
b. Products and Service
Holiday or temporary accommodation where guests are responsible for cooking and preparing their own meals.
c. Mission Statement
Our mission is to provide our guests with comfortable, affordable, and convenient self-catering accommodation that feels like a home away from home. We strive to create a welcoming environment that allows our guests to relax and enjoy their vacation on their own terms.
We are committed to providing exceptional customer service and ensuring that our guests have everything they need for a comfortable and memorable stay.
Vision Statement
Our vision is to become the leading provider of self-catering accommodation in our region, known for our commitment to quality, comfort, and convenience.
d. Goals and Objectives
The goals and objectives of a self-catering accommodation business are to provide holiday or temporary accommodation where guests are responsible for preparing their own meals.
e. Organizational Structure
- Chief Executive Officer (Owner)
- Facility Manager
- Accountant/Cashier
- Marketing and Sales Officer
- Attendants
- Cleaners
- Security Officers.
Marketing Plan
a. SWOT Analysis
Strength
- Fully equipped kitchens
- Flexible accommodation options
- Good location with proximity to local attractions and amenities
- Ability to offer competitive pricing compared to traditional hotels
- Opportunities for repeat business and positive word-of-mouth referrals from satisfied guests.
Weakness
- Dependence on seasonality and fluctuations in demand
- Limited marketing reach and visibility compared to larger hotel chains
- High operational costs, including maintenance, cleaning, and staffing.
Opportunities
- Expansion of services, such as adding additional amenities like swimming pools or fitness centers
- Collaborations with local businesses and attractions to offer package deals and discounts
- Potential for international tourism growth and partnerships with international travel companies
- Increasing demand for sustainable and environmentally friendly accommodation options.
Threats
- Competition from larger hotel chains with larger marketing budgets and more extensive networks
- Economic downturns that could decrease travel and tourism demand
- Increasing regulatory requirements and compliance costs
- The potential for negative reviews and feedback can harm the business’s reputation.
b. How Does a Self-Catering Accommodation Business Make Money?
A self-catering accommodation business makes money by charging guests for the use of its facilities and services. Typically, guests will pay a nightly or weekly rate to stay in the accommodation, and this rate will vary depending on factors such as location, amenities, and seasonality.
c. Payment Options
- Credit and debit cards
- PayPal
- Apple Pay and Google Wallet
- Gift cards and store credit
- Installment payments
- Cash on delivery.
d. Sales & Advertising Strategies
- Create a website that showcases your self-catering accommodations, services, and amenities.
- Use social media platforms such as Instagram, Facebook, and Twitter to promote your self-catering accommodations and engage with potential customers.
- Utilize paid digital advertising to target your ideal audience.
- Attend trade shows, networking events, and other industry gatherings to build relationships with travel and tour companies, and potential customers.
- Partner with local businesses, such as travel and tour companies to cross-promote each other’s services and offer package deals to customers.
- Create seasonal promotions, package deals, or referral incentives to attract new customers and increase revenue.
- Build an email list of potential and current customers and send regular newsletters that include upcoming promotions, and helpful tips for planning successful travels and vacations.
- Use local print publications, radio, or television advertising to reach a broader audience and promote your self-catering accommodation to potential customers.
- Provide exceptional customer service to create positive word-of-mouth recommendations and increase customer loyalty.
- Encourage satisfied customers to leave positive reviews online or refer their friends and colleagues to your business.
Financial Projection
a. How Much Should You Charge for Your Product/Service?
Here are some approximate nightly rates for various accommodations:
- Studio or one-bedroom apartment: $75-$200 per night
- Two-bedroom apartment or cottage: $150-$400 per night
- Vacation home or villa: $200-$1000+ per night, depending on the size and amenities of the property
- Luxury vacation rental or private island: $1000-$10,000+ per night, depending on the level of luxury and exclusivity.
b. How Much Profit Do Self-Catering Accommodation Business Owners Make a Year?
According to industry benchmarks and averages, a self-catering accommodation business can expect to earn a net profit margin of around 20-30% of its gross revenue. For example, if a self-catering accommodation business generates $500,000 in gross revenue in a year, it can expect to earn a net profit of around $100,000 to $150,000.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the self-catering accommodation
- The location of the self-catering accommodation
- The management style of the self-catering accommodation
- The business approach of the self-catering accommodation
- The advertising and marketing strategies adopted by the self-catering accommodation business.
- The availability of complementary services.
d. What is the Profit Margin of a Self Catering Accommodation Business?
According to industry benchmarks and averages, a self-catering accommodation business can expect to earn a net profit margin of around 20-30% of its gross revenue. This means that for every dollar in revenue earned, a self-catering accommodation business can expect to keep around 20-30 cents as profit after deducting all operating expenses and overhead costs.
e. What is the Sales Forecast?
- First Fiscal Year (FY1): $1.6 million
- Second Fiscal Year (FY2): $2.8 million
- Third Fiscal Year (FY3): $4.6 million
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Set Up your Shop/Office
a. How Do You Choose a Perfect Location for a Self-Catering Accommodation Business?
- The demography of the location
- The number of tourist attractions and heritage sites in the location
- The purchasing power of businesses and residents of the location
- Accessibility of the location
- The number of self-catering accommodation facilities and related facilities in the location
- The local laws and regulations in the community/state
- Traffic, parking, and security et al
b. What State and City is Best to Open a Self-Catering Accommodation Business?
- New York, NY
- Los Angeles, CA
- Charleston, SC
- New Orleans, LA
- Savannah, GA
- Miami, FL
- Austin, TX
- Nashville, TN
- Portland, OR
- Seattle, WA
- Boston, MA
- Washington, D.C.
c. What Equipment is Needed to Operate a Self-Catering Accommodation Business?
- Kitchen equipment (oven, microwave, refrigerator, dishwasher, coffee maker, blender, toaster, and other cooking and food preparation equipment).
- Dining and serving equipment (plates, bowls, glasses, utensils, serving dishes, and other items needed for dining and entertaining guests).
- Cleaning and maintenance supplies (cleaning products, vacuums, mops, brooms, laundry detergent, and other items needed to keep the accommodation clean and well-maintained).
- Bedding and linen (sheets, blankets, pillows, and towels for guests).
- Furniture (beds, sofas, chairs, tables, and other furniture items needed for the accommodation).
- Technology (computers, printers, internet access, and other technology needed for managing reservations, communicating with guests, and managing the business).
- Safety equipment (detectors, fire extinguishers, first-aid kits, and other safety equipment required by local regulations).
- Decor and amenities (decorations, artwork, plants, books, games, and other amenities that can enhance the guest experience).
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Hire Employees
You are expected to hire qualified and competent employees for your self-catering accommodation business. All you need to do is to make sure your hire competent and qualified people to occupy all the available roles in your organization. You may be required to contact the hiring of employees to a recruitment agency with a good track record.
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Launch the Business Proper
Launching a new business is key to how successful the business can gain traction in the market space and the self-catering accommodation business is not an exception. So, you must make sure you organize a launch party that will attract key players such as travel and tour agencies, residents, wedding planners, and corporate organizations in your target market locations.
a. What Makes a Self-Catering Accommodation Business Successful?
- Choose good locations and standard facilities to launch the business
- Make sure your partner with key stakeholders and offer a wide range of services (give your customers options)
- Throw an open house grand party before officially starting the self-catering accommodation business
- Be deliberate with your marketing sales approach
- Encourage the use of word of mouth to promote your self-catering accommodation business
- Ensure that your self-catering accommodation is highly secured, easy to locate, and highly comfortable
- Leverage all available online and offline platforms to promote your self-catering accommodation business.
b. What Happens During a Typical Day at a Self-Catering Accommodation Business?
- The business is open for the day
- All the rooms, kitchens, and other spaces are cleaned and ready to welcome guests
- Guests are welcomed and ushered to their rooms
- Administrative work is done concurrently
- The cleaners and other staff members execute their job description
- Stocking of toiletries, cooking ingredients, and other supplies is done
- Maintenance of the properties is carried out when due
- The facility is administratively closed for the day.
c. What Skills and Experience Do You Need to Build a Self-Catering Accommodation Business?
- Excellent facility management skills
- Excellent quality control skills
- Excellent customer services skills
- Interpersonal skill
- Health and safety knowledge
- Accounting and bookkeeping skills
- Business management skills
- Bargaining and bidding skill
- Work experience in a self-catering accommodation business environment or the hospitality industry
- Work experience in the facility management industry
- Experience in managing people.