Create your Airbnb Business plan

Airbnb has gained popularity over the last decade with over 150 million users on its site. Since the pandemic, the popularity has grown with a lot of people looking for short-term rentals for their stay. For one thing, they are wanting to stay for longer now after missing out on holidays for the past two years. So they are making the most of their trips away with an extended break which is possible and cheaper than booking through a hotel. Additionally, with now a lot of employees working from home, they can work wherever in the world. So now they are mixing trips of leisure with business and working while away. 

With all this in mind, it’s no surprise that people are considering buying short-term rentals and placing them on the popular Airbnb site. They offer a great profit with the right guests. But it’s not just as simple as placing it on the Airbnb site. After all, if you don’t plan and are strategic with your short-term rental, you will not make as much profit from the rental. If you ask anyone successful on the site, they will have had a business plan.

Therefore it’s a good idea to make a business plan when it comes to your rental. That way, you have a structured, set guide on what exactly you are going to do step-by-step with your Airbnb business. But a lot of people are left confused about how to get started with the plan. Here is everything you need to know on how to create your Airbnb business plan.

What exactly is an Airbnb Business Plan?

Before we go through all the details on exactly what you should be including in the business plan, here is a brief introduction about what an Airbnb business plan means. In basic terms, a business plan is a document which sets out all your business goals and what you hope to achieve in one place.

It explains how you plan to operate and what your overall timeline is to achieve these set goals. A clear, successful business plan could make or break your business. Therefore, you must take the time to make an effective business plan if you are going to start an Airbnb business.

Why is a business plan important for your Airbnb business?

Now you know exactly what it is, you might be still wondering if it’s really necessary to create an Airbnb business plan. But it could help you become a long-term short-term rental business owner. After all, a well-thought-out business plan sets you up for the future. Here are some other reasons why you need to put pen to paper when it comes to your Airbnb business plan.
 

It lets you plan for the future

You are likely just thinking of the here and now when you start your Airbnb business. After all, you want to gain your first client and start making your profit. But while it’s important to start at the beginning, you also need to look ahead if you want to make a success of your company. After all, every step you take now will help you towards the future.

Therefore, having a business plan lets you think ahead and make those important decisions about what you want to do with your business in a year, 5 years and even 10 years. It might stop you from making rash decisions now that might perhaps work in the short term but would never let your business last in the long term. Therefore, a business plan helps you to future-proof your plans.

It ensures you think about your goals

When you start your business, you will have a few set goals in mind. After all, you don’t start a business without a dream scenario. For example, when it comes to short-term rentals, you may aim to have three or four houses in five years. Or you might want to make a million pounds from your business in a decade. Whatever your dream is, it’s a good idea to have them in a business plan. 

That way, you know exactly hoping to achieve with your business and you are unlikely to make errors that take you away from this. Of course, your goals may change over time but having set goals, in the beginning, will motivate and encourage you to keep going with your business. You also get to celebrate when you achieve your goals too.

It helps to plan things out properly

When you have just an idea of what you want to do with your Airbnb business, it’s not likely to be as successful as if you flesh it out properly when you put pen to paper. Completing a business plan lets you properly decide on how to run things effectively and lets you stop and take a moment to decide if you are making the right decision. After all, there might be certain aspects you thought of doing that won’t work in hindsight.

Therefore, writing a business plan lets you think about it properly and make some changes now while you are at the drawing board stage. You don’t want to start your business and look back with regret you didn’t think things through. it might help you make decisions you have put off.

It helps when it comes to investors or shareholders

While you will be clear about exactly what you want to do with your Airbnb business, it can be difficult when comes to explaining to others what you hope to achieve in the future with your business. After all, it is often confusing or we can stumble over exactly what we want to say. Therefore, a business plan allows you to easily communicate what your business is about, how you plan to operate and where you see the business going in the future.

While it might only be you currently running your business, there could be a time when you look at getting someone else to invest in your business. Perhaps you want to expand or need some extra help financially. Whatever the reason, having a clear business plan means you can show them this document and they will understand exactly what you hope to achieve and your goals.

Creating your business plan

So now we have explained exactly what an Airbnb business plan is and why you should look at having one for your business, now it’s time to start creating one. But what exactly do you need to include? Here is everything you need to know to get started.

First, start with an executive summary

The first thing you should always start your business plan, whether you are going into short-term rentals or not, is an executive summary. This is a good opportunity to get across to those reading the business plan exactly what your business is. It’s one of the most important aspects of a business plan and it is only just a few sentences that go to the heart of exactly what your business does and why it exists.

You want the executive summary to have all the key information about your business. You want to cover who Airbnb’s main audience is and the type of property it is. For example, is it for families looking for a beach holiday or is it aimed at professionals looking for a pad in the city? You should also include the time of year you expect the short-term rental to be used. For example, if it will mainly be used in summer, it should be included in the initial statement. 

You want to be clear in the executive summary about why guests will want to choose your property. For example, is it styled to perfection or is the location excellent? While you want to include all this information, do make sure it reads professional and is clear to the reader. That way, you will be taken seriously from the start of the plan and it makes it clear straightaway what is unique about your business.

Outline your plan for operations

The next thing you want to put clearly in the Airbnb business plan is your plan for operations. This is key to showing how everything will work and will run smoothly. This operation plan will cover everything that goes on in your business and how everything will work like clockwork. It’s important you research and makes clear in this section how your business will run effectively. This is a great chance to work out what exactly is needed to make a success of your business. 

You might want to talk about whether you are going to hire any staff to run your business. For instance, you might want to hire someone to take care of all admin such as booking the Airbnb stays and arranging any assistance required if things go wrong. You should add this into the plan as well as how much they will be paid and when they will work. You might want to include in the business plan any inventory you will have and how you plan to keep track of it in your business. For instance, if you are going to have an inventory list, this needs to be mentioned in the plan.

If you are going to do all the arranging such as communicating with guests and planning the bookings effectively, this also should be included. You should have a good idea of when you are going to start your business of who is going to run it. But now is a good time to make that decision before you include it in your business plan. Also, deciding who will clean and maintain it is important to add. For instance, are you hiring a cleaning service and when will this run? Will you fix anything yourself or hire a maintenance team to deal with the situation?

Also, in regards to operations, you need to decide on who is going to deal with your finances and include this in the plan. If you have decided to hire an accountant, you can add this to your plan or add you are taking care of them yourself if you are going to be in charge of finances. Writing all this clearly will ensure you can prove you know how your business will run effectively. And with this in mind, you will be taken more seriously as an Airbnb business owner.

Time to talk about your goals

As we talked about above, goals are very important to highlight in your Airbnb business plan. They enable you to ensure you stick to your specific goals with every business decision you make. And they are something you need to head to in the future. With every step you take with your business, you know you are heading to reach your goals. It reminds you of why you decided to start your business. And with this in mind, this is why you need to talk clearly about your goals in the business plan.

Whoever is reading the business plan wants to know exactly what you are hoping to achieve from your Airbnb business. So by you adding your goals and what you are looking to reach, it gives them a clear idea of what your expectations are. For example, if you are hoping to have 100 guests in the first year or are looking at filling the property with all dates booked up, do make clear your goals in the section.

Don’t go overboard with your goals as they will not take them seriously if it’s not achievable. While the sky is the limit, you have to be realistic. But also don’t understate your goals either. They want to know you are determined and a high achiever. Therefore, always think clearly about your goals and ensure they are attainable and relevant. And think properly about timing if you are setting time-based goals. After all, you don’t want a goal which is only a month or so time. Therefore, ensure you have good, accurate goals which will impress yet will be reachable over time. That way, your plan will be a lot more appealing.

Now discuss your USPs

While you will have initially described what makes your business special at the start of the plan in your executive summary, now it’s time to go more clearly into what is unique about your business. After all, you want to make a success of your business and the main way of doing that is by bringing something new to the table. Therefore, you should have a section that explains your USP. 

To help discover your USP to include in the business plan, consider what makes your property different to others around yours. What does yours provide that others cannot? For instance, does it have an excellent location which makes it highly appealing? Do you offer a better guest experience than other Airbnb choices? Or is it designed to a certain theme which makes it more desirable? You can easily research other Airbnb properties with similar criteria and then pick out the strengths of your Airbnb rental compared to others.

Once you have figured out what your Airbnb brings to the market that is different to others, you can then clearly state this in your business plan and explain what your unique selling point is.

You will find having this in mind will help you even when it comes to listing your Airbnb rental online.

Time to discuss your target audience

The next thing you need to do is discuss your target audience. After all, you want to show in your business plan who you will want to stay in your property and ultimately earn you a profit. Therefore, it’s worth having your ideal guest in mind when it comes to writing your business plan. A lot of people create a profile of that targeted guest to show you have a deep understanding of them. You will find this will help you when it comes to marketing and advertising down the line. For example, a profile which includes their age, job, income, home, and family is a great place to start.

By doing this, you are giving a deeper look at the person who will be staying at your property and this will also help you to target your property properly for this specific ideal guest. Adding this to your business plan will also show you understand the market and have thought through what they are looking for to fulfil their needs. After all, you will have a good idea of the sort of thing this kind of guest will be looking for in terms of accommodation and the amenities that they will expect. 

For instance, if you are targeting the professional group, you will be looking to add extras such as desk areas and fast Wi-fi. This would be different than if you were aiming at the retired market or the young family group. After all, you would be adding different items to the apartment or house in this case. Therefore, make it clear you know what guest you are targeting in your Airbnb business plan.

Discuss your competition

While the focus in your business plan should mainly be on your business plan, you do need to show you have researched other Airbnb businesses. Research into your competitors is so important for the future of your business. After all, it gives you a good idea of what others are doing and how yours will be different and also similar in ways they are doing stuff brilliantly. 

You need to do thorough research into competitors to find out exactly what price you should be charging, what standards you should be setting and what amenities you should be offering. Analysing competitors will also allow you to see what they are missing so that you can offer this with your own Airbnb business. Therefore, you will earn greater profit and be more successful than your competitors.

Clearly state in your business plan what other Airbnb businesses you have looked at and run through the key details about them. You can then discuss what you have taken forward and what areas you will include ensuring you stand out from these competitors.

Discuss your marketing 

Marketing is such a key point to help your business to be a success. Therefore, you need to include in your business plan what exactly you will do to make a success of your Airbnb business via marketing. It might be the case that you might run promotions on social media to boost interest in your Airbnb property. Or you might even have your website in which the property has its page showcasing the accommodation.

Whatever you plan to do online and offline, make it clear in your business plan the route you will take with marketing your Airbnb property. You need to show you will take steps to market to customers which will ultimately earn your profit. You want to ensure the marketing is suitable for your target audience which we have discussed above and also how you will utilise the Airbnb site to market your business.

Plan your finances

Another major point you will need to discuss in your Airbnb business plan is your finances. After all, you need to decide on how you are going to fund the business. Are you going to use a second home as a short-term rental? Are you renting out a room on your property? However you are going to finance the property, you need to ensure you make this clear in the business plan. 

You need to discuss any loans you might need to take and how you will afford this loan. You should also think about how you will look after the funds from your Airbnb business. Talk in the business plan about whether you are going to have an accountant or run your own finances.

It’s worth discussing in the business plan the projected income for the next few years. Go through the first year, the third and the fifth year. That way, the reader knows you are thinking ahead with your business.