Using a business plan as a tool for understanding how your business is put together.
An ecotourism business has specific needs which should be incorporated into any new business plan or development plans. In addition to a normal business plan, a tourism provider interested in going green can assess its potential strengths and weaknesses in this specific area.
Do you have local support, such as conservation organisations? Are you in a National Park or a protected area? What is your local supply chain like? Are there many farmers willing and able to produce good quality food for your business? There are a lot of questions that need to be asked, and a lot of answers to be presented, if you want to take your ecotourism business one step further. Planning is the best way to do this, and with many organisations out there willing to promote ecotourism, you will have plenty of support.
THE BUSINESS PLAN
A business plan is a tool for understanding how your business is put together, and has many uses: monitoring progress, controlling your costs and sales and raising funds. Writing out your business plan forces you to review everything at once, such as your understanding of the ecotourism market, how you plan to run your business, staff it and finance it. A business plan should clearly present all of the important information regarding your ecotourism business. This includes all aspects of your plans for incorporating ecotourism principles into your practices, from protecting the environment, supporting the local economy, supporting cultural heritage and protecting the local biodiversity. The following is a summary of the key elements of a business plan:
1. EXECUTIVE SUMMARY
Approximately two pages long, this section should summarise all the important aspects of your business. It is best to write it at the end, after dealing with all the other details of the plan. It should include a summary of what is to come. An easy way to think about it is by imagining all the points you might cover in a five-minute interview about your business, such as: What is your ecotourism product? Who will your customers be? Who are the business owners? What are the future prospects for the tourism industry and your ecotourism business? What are your competitive advantages in the ecotourism market? If you are applying for a loan or grant, state clearly how much you want, precisely how you are going to use it, how it will make your ecotourism business more profitable, thereby ensuring repayment. Make it enthusiastic, professional, complete, and concise.
2. BUSINESS DESCRIPTION
Any investor or reader of the business plan will need to know a few fundamentals of how your ecotourism business is structured and operated. Aim to provide the reader with an understanding of the industry, the owners, the business model and market, including:
• Business Objectives: Set out no more than four key business objectives and describe in one sentence how you will achieve them. For example: ‘to have a successful business that is a leading provider of eco-friendly accommodation in the North West of Ireland, and achieve EU Flower accreditation’
• What business will you be in? Are you an accommodation provider, health and wellness services provider, bike hire business or perhaps a nature and educational walks provider?
• To whom will you market your products? State it briefly here, with greater detail in the Marketing Plan section
• Describe the tourism and ecotourism industry. Start with a general overview and then give some specific details about your business. Is it a growth industry? What changes do you foresee in the industry, short term and long term? For example, are increasing oil prices affecting Irish people’s choices to holiday at home? How will your company be poised to take advantage of them? Back up your statements with relevant statistics
• Describe your most important business strengths and core competencies. What factors will make your ecotourism business succeed? What do you think your major competitive strengths will be? e.g. Maybe you have no local competition. Or perhaps you operate from an historic building. What experience, skills, and strengths do you personally bring to this new venture? List your qualifications
• Legal form of ownership: Sole proprietor, Partnership or Limited Liability Company. Why have you selected this form? • Describe in depth your ecotourism product or service. Give a description of the products or services offered. Describe things such as level and quality of service. What is the price of your product or service? How and where will it be delivered? Briefly how will it be marketed and sold?
3. MANAGEMENT AND ORGANISATION
The aim of this section is to provide the reader with the information they need about your professional background and experience. It will allow readers to gauge whether you have what it takes to run a successful ecotourism business and allow an investor to feel comfortable that they have made a wise investment choice with their funds. It should include:
• Owners and Managers – List their professional experience, skills and qualifications, specifically highlighting any relevant ecotourism experience. Is there a plan for continuation of the business if key people are lost to the business?
• Job descriptions – Include CVs of owners and key employees. List the functions of the key employees such as sales, marketing, operations etc.
• Professional and advisory support – Provide details of all your professional advisers: solicitors, accountants, bankers, insurance brokers, business advisers or mentors.
4. MARKET ANALYSIS AND MARKETING PLAN
An ecotourism business cannot succeed without effective marketing. Market research will allow you to establish pricing, distribution and promotional strategies for your ecotourism product or service. In order to create your marketing plan, you need to:
• Define your Market – Define the total ecotourism market in terms of size, structure, growth prospects, trends and sales potential. As already discussed, refer to published statistics available from Fáilte Ireland, Tourism Ireland or the Northern Ireland Tourist Board. Then define your target market, which is your chosen segment of the overall market.
• Project your Market Share – Estimate the size of the target market you plan to capture. For example, you may estimate that your business will capture 30% of tourists visiting your region, who are seeking an ecotourism health and wellness experience
• Analyse the competition – List the strengths and weaknesses of each competitor and compare your product or service to theirs. Define your competitive advantages. They can be as simple as having a small library on responsible travel available for your guests to a gourmet welcome hamper full of locally produced food for their first evening meal.
5. MARKETING AND SALES STRATEGY
• Once you have projected a reasonable market share you will now need to outline how your ecotourism business will achieve that share, through a marketing and sales strategy. Set out your promotion plan, or a list of points
which show how you will sell your product or service. Take account of what your competitors are doing, and how they are getting publicity. Which publications are they in, and which ones would you like to be in? How quickly can you find them on a search engine and what’s different about their websites? Also, show what the price of your product or service will be. The price charged must be enough to cover costs and make a profit. It must also be competitive, taking into account the quality of your product or service as well as your competitors’ price.s
6. OPERATIONAL PLAN
This section explains the daily operation of the ecotourism business, including:
• Location – the amount of space you have, type of building, special features and facilities, preferably using a photo as well as maps providing details of access, parking facilities, and access to public transport
• Administration – Briefly describe administration functions, such as how sales, cash receipts, payments etc. are dealt with. If your business has to keep other records such as visitor disclaimers for certain activities, provide details
• Legal or regulatory issues that apply to your business – For all businesses this will include a health and safety statement, employment policies and public liability insurance. For those providing food, a food safety statement is needed. Specifically relating to ecotourism, provide details of any special accreditation’s such as the EU Flower Ecolabel.
• Personnel – State the number of employees, pay structure, training
requirements for staff and job descriptions and show again how
this can relate to delivering an ecotourism product or service e.g.
all staff have undertaken a Leave No Trace workshop.
7. FINANCIAL PLAN
Cash and finance are the lifeblood of what makes a business sustainable. In many cases finance and financial planning are often overlooked because
business managers are too busy dealing with staff, customers and products on a day to day basis. Without proper financial management even the most profitable of businesses can fail. Financial planning is not a difficult process
and you do not need to be an accountant or financial advisor to draw up and follow a financial plan for your business. Who else knows the intricacies of a
business better than the owner or manager? The or not your business will be profitable. It is also, therefore, a key to determining whether or not you will be able to attract investment. There are several agencies and support organisations in Ireland that can assist you to prepare financial plans or
provide you with training or mentoring when developing your business. Many
are listed in the funding section of this handbook. Your own accountant will
also be helpful. A good financial plan will give the reader confidence that you really understand your business. It must take into account all of the running costs, should not be overly optimistic and use reasonable assumptions to back up any figures. Remember there is lots of help out there so don’t be afraid to avail of it.
8. APPENDICES TO THE BUSINESS PLAN
Appendices are an ideal way of presenting information to support the main
information contained in your business plan and avoiding clutter in the main part of the plan. These include CV’s of business owners and managers, maps and photos, details of equipment to be purchased, leases and contracts, letters of support from future customers, and list of assets available as collateral for a loan. If you are trading as a company include memorandum and articles of association, and if an existing business, copies of previous two years accounts. Also, you might want to add in any plans for conservation of the area, such as planting trees, building ponds or footpaths, which aim to protect the biodiversity of the area.