ENTRP 486 Business Plan
Homestay
April 22, 2024
Ilona Coscodan
Elizabeth Hertzog
Cielo Hilario-Ames
Anna Seppala
Anita Tarkovskaya
TABLE OF CONTENTS
EXECUTIVE SUMMARY
THE BUSINESS CONCEPT AND VALUE PROPOSITION
2.1 Our Offering
2.2 Revenue Streams & Product Pricing
2.3 Sales Structure, Process & Terms
INDUSTRY/MARKET ANALYSIS
3.1 Industry Overview and Industry Trends
3.2 Customer Market Pains
3.3 Tip of the Spear Customers and Customer Archetypes
3.4 Channels of Distribution and Target Distributors
3.5 Problem Space & Alternative Solutions
MANAGEMENT TEAM AND COMPANY STRUCTURE
4.1 Management Team
4.2 Board of Advisors
4.3 Human Resource Plan
PRODUCT DEVELOPMENT, GROWTH, & EXIT STRATEGY
5.1 Growth Plan, Major Milestones, and Timeline
5.2 Future Product Extensions
5.3. Risk Assessment
5.4 Exit Strategy
OPERATIONS PLAN
6.1 Operational Overview
6.2 Key Activities, Resources, and Partnerships
FINANCIAL ANALYSIS
7.1 Summary of Financial Projections and Financing Plan
7.2 Explanation of Assumptions
7.3 Summary of Sources of Capital and Start-up Expenses at time 0
7.4 Annual income statements for years 1 – 5
7.5 Annual cash flow for year 1 to 5
APPENDICES
8.1 Problem Space
8.2 Validation Surveys and Experiments Explained
8.3 MVP
8.4 Customer Archetypes
8.5 Business Model Canvas
8.6 Gantt Chart / Timeline
8.7 Exit Strategy Appendix
8.8-8.10 Additional Appendices
REFERENCES
I) EXECUTIVE SUMMARY
Problem and Solution
In today’s travel scene, genuine cultural immersion can feel like an overpriced luxury. Our survey of 163 travelers revealed that 46% feel there is a lack of accessible opportunities for cultural experiences when traveling. Enter Homestay, a company dedicated to providing accessible cultural experiences to all; 60% of respondents expressed eagerness for such a platform.
Value Proposition
Homestay is a platform that redefines travel by providing travelers with unique lodging, culturally immersive experiences, and opportunities for authentic connection through staying with local hosts worldwide.
Market Opportunity
Airbnb dominates the market with 6 million active listings, Homestay aims to carve out its niche in the rapidly expanding industry, currently estimated at $82.63 billion and expected to grow at an annual rate of 4.7% from 2023 – 2030.
Competitive Strategy
Homestay stands out amongst direct competitors such as “Lingoo,” and “Couchsurfing,” with its emphasis on personal interactions, diverse stay options, and unwavering commitment to safety. Unlike indirect rivals like Airbnb, we prioritize cultural immersion and authentic connections, delivering unique experiences that set us apart.
Market Strategy
Homestay caters to a diverse audience, from adventurous 18-24-year-old solo travelers to globetrotters aged 55-65+; these groups cover 87% of our interested respondents. Targeted marketing includes social media ads and partnerships with influencers, all focused on delivering exceptional travel experiences to ensure lifelong customers.
Revenue Model and Financial Projections
Based on our survey, the majority of customers’ willingness to pay ranges from $100-$200+ per night. Assuming we charge the host fees of 5% and the guest service fees of 12%, Homestay would need approximately 1,961 three-night stays at $100 per night to yield $100,000 in revenue in our first year.
Funding Requirements and Sources
Homestay will need an investment of $150,000 to get started which includes $137,400 towards expenses and $13,000 as a buffer. We also plan on crowd-funding and getting family investors.
Traction
Having secured 41 emails from interested parties, we’re now focused on growing our user base and improving platform functionality. We’re on track to revolutionize cultural experiences. Join us and let’s create unforgettable adventures together.
II) THE BUSINESS CONCEPT AND VALUE PROPOSITION
2.1 Our Offering
Platform in app and website form, that connects hosts and travelers to do homestays. Homestays are a type of accommodation, where a local person opens their home to a traveler or travelers to stay with them for any range of time. Our platform will be a much easier alternative to study abroad or typical homestay programs that require long commitments, often large amounts of money and lengthy application processes. The platform will offer a unique experience for travelers excited to culturally immerse and live alongside locals.
2.2 Revenue Streams & Product Pricing
Our company will be working in a sharing economy model. Much like Airbnb or Uber, Homestay offers hospitable people the ability to open their homes as hosts to guests at a nightly rate they choose. Hosts can market themselves on their host profiles on the app, within our guidelines. We, the company, will make revenue from charging hosts a 5% fee, as well as a guest service fee of 12%. This model is very similar to Airbnb’s
Since rates depend on many factors, such as the house and location, we will provide hosts with their own pricing guides. Overall though market research,( see appendix ) we believe our customers’ willingness to pay is in the $100-$200 a night range.
Hosts will have the freedom to offer other services, like guided excursions, or all-inclusive packages with their normal stay. Though, hosts may still choose to offer these just as their base offering as well. We have found that many travelers crave unique experiences and would love a local to show them the “non-touristy” places. See appendix
Our target market group would gravitate towards Homestay, because there is nothing else like it on the market for those looking to be fully immersed in a culture. Staying with a local is one of the most enriching experiences a person can get, and the platform will ensure one can find the right host for them. Our market groups may however resist, because they are unsure of how safe it is.
2.3 Sales Structure, Process & Terms
Our sales structure will remain simple, with a small external sales force to act as a catalyst in the initial years. We believe utilizing a professional team, rather than developing our own is best. This team will meet with people in our target market to discuss services and work towards securing our first customers. Salespeople may offer quality assurance, discounts, and referral bonuses. Since transactions and “booking” take place on our platform, sales will be tracked using the platform.
III) INDUSTRY/MARKET ANALYSIS
3.1 Industry Overview and Industry Trends
3.2 Customer Market Pains
3.3 Tip of the Spear Customers and Customer Archetypes
3.4 Channels of Distribution and Target Distributors
3.5 Problem Space & Alternative Solutions
IV) MANAGEMENT TEAM & COMPANY STRUCTURE
4.1 Management Team
4.2 Board of Advisors
4.3 Human Resource Plan
V) PRODUCT DEVELOPMENT, GROWTH, & EXIT STRATEGY
5.1 Growth Plan, Major Milestones, and Timeline
5.2 Future Product Extensions
5.3. Risk Assessment
5.4 Exit Strategy
VI) OPERATIONS PLAN
6.1 Operational Overview
The process for developing the HomeStay app will involve several steps. Our team will start by designing a simple prototype that includes important features aligning with user preferences, such as booking calendars, host background checks, and a secure payment system. Next, we will seek outsource production due to the complex process of app development that requires specialized expertise and resources in app development. A potential company we plan to contract with is Seattle Software Developers. They are a wildly successful company with 30 years of experience in software and have worked with big companies, such as TikTok. They offer a variety of services, from app development to UX/UI design. After contacting their team, the app will be developed using appropriate technology and programming, under the supervision of our internal team members. We will make sure to test the app for bugs, glitches, and usability issues before launching it to the market, and continuously gather user feedback for further improvements.
6.2 Key Activities, Resources, and Partnerships
Based on our value proposition for the HomeStay app, the key activities will involve developing and maintaining the platform, establishing partnerships with local hosts worldwide, curating unique lodging options, facilitating bookings between guests/hosts, and providing customer support. The key activities for operation success will include continuous improvement of the app and the implementation of effective marketing strategies. To track performance and provide insight into how well the app is performing, our team will frequently analyze metrics such as the number of active users, booking conversion rates, customer ratings/reviews, and revenue generated from bookings. The HomeStay app will be made available to download and use through digital app stores, including Apple App Store and Google Play Store. The key resources will involve technology infrastructure, human resources, partnerships with local hosts, and financial resources. The cost structure associated with operating the app will include platform development,
VII) FINANCIAL ANALYSIS
7.1 Summary of Financial Projections and Financing Plan
7.2 Explanation of Assumptions
7.3 Summary of Sources of Capital and Start-up Expenses at time 0
7.4 Annual income statements for years 1 – 5
7.5 Annual cash flow for year 1 to 5
IIX) APPENDICES
8.1 Problem Space
8.2 Validation Surveys and Experiments Explained
Insert details on experiments / tracking of validation.
Present data/results of your surveys
Style counts! (think back to your validation presentation).
8.3 MVP
Describe or display a mock-up or sketch of your MVP.
8.4 Customer Archetypes
Update your customer archetypes. Include at minimum the tip of the spear customers, you could also include eventual customers.
8.5 Business Model Canvas
Update your business model canvas and include it here
8.6 Gantt Chart / Timeline
Include an updated copy of your company timeline / Gantt Chart.
8.7 Exit Strategy Appendix
Include an exit strategy appendix that documents recent acquisitions in your industry and/or recent IPOs in your industry.
Indicate your anticipated exit strategy
8.8-8.10 Additional Appendices
– Optional
– Insert additional graphs, tables, or figures as needed. Properly label and title of each appendix.
– Suggested (if applicable): Operations and distribution flow-chart, plant schematic, product sell sheet.
X) REFERENCES
You must include a references and citations to reference the published sources you have used to support your plan.
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