General Business Description
Tourism and hospitality business. The business will be a hotel.
Mission statement
Our cooperate mission is bringing the best products to and around the world that influences support and satisfaction in achieving excellence and becoming a global tourist destination to meet customer expectations.
Goals
Short Term Goals
Provision of quality products and services to our customers to create a good legacy.
Long Term Goals
Saudi Arabia is a tourist destination; therefore, the business aim is to grow and have branches within the kingdom over five years.
By the end of 2 years, the business will serve customers even on their doorsteps as most people nowadays are ordering their food products online.
Objectives
- To provide training to our employees for good customer services.
- To ensure employees satisfaction that conveys happy emotion to customers and increased staff motivation.
- To maximize business profit by offering quality services.
Business Philosophy
The hotel business has been in our bloodline for ages. Therefore, it is by pressure to continue the trend on a revised scale that maximizes the new global tourism trade.
Tourists will be the biggest target while maintaining an excellent local relationship in the domestic tourism sector.
The tourism and hospitality industry expects more and more growth over time, making it the best industry to start a business in.
Long Term changes
The industry is expected to expand over time as the world is becoming more civilized, hence increasing tourists’ mobility through relaxation of countries entry with a target of 100 million tourists by 2030.
Short Term changes
The introduction of projects like The Red Sea Development, Amala And NEOM aims to improve its investment opportunity.
This will create a more diverse market that is expected to have many arrivals increasing the potential of customers for our business.
The company’s main strength will be a good relationship with staff, customers, and management, ensuring maximum efficiency and productivity, which is crucial for ensuring our company’s dominance in the tourism and hospitality market.
Running the company’s centrally and visas introduction is expected to create a more extensive demographic base.
The business’s main competitive strength will be ensuring customer satisfaction, which is crucial in promoting awareness on a domestic and global scale whereby the spillover is expected to increase visitors.
Being brought up in a family where a hotel is a part of them has given me the chance to learn how the business is run and what it takes for such a business to succeed. I am good at managing different groups of people and very good at appreciating every person ethnic background that helps in creating a good relationship between my employees and me.
The business will be a sole proprietorship because, as an individual, my interest is to create a dynasty based on hospitality to maintain the family legacy.
Product and Services
The hotel will be a multi-purpose business that will be offering the following products and services: in-room dining, fitness centre and SPA, indoor lap pool, valet parking, with other services provided in the hospitality industry.
These are the general long term action plans. They are made for achieving the main objectives of an organization. They tell us what the production department must do to achieve the organization’s top aims and acts as the road map. Enable a business to only focus on a specific target market and feature set instead of trying to be everything to everyone. The main strategies used in production planning and control are the chase strategy, level production, make-to-stock, and assemble to order. There are four strategies for better performance: product focus, process focus, repetitive focus, and mass customization, which are used to improve operations. Example of product initiatives includes; improve customer satisfaction, increase lifetime customer value and upsell new services. For a hotel, strategic planning should ask what services a hotel wants to deliver, request the services needed, and what audience to target. Following are some of the marketing strategies implemented in a hotel; make the most of your social media, leverage technology to better market your hotel, reward guest loyalty, use a vanity website, partner with local businesses, email marketing and evolve operations based on guest feedback. To improve hotel productivity, follow can be done; provide incentives, go paperless, reduce workloads, employ accounts payable automation, and encourage communication.
The best way to price our products is by using price set by our competitors as we are not entering the industry to scare others but improve the services they have been giving to the community. The use of production cost as the business is not expected to be making losses but profit. We will not use demand to set our prices as sometimes by using the strategy as sometimes it scares away customers. Our prices will remain constant unless forced to change due to changes in the production cost or regulations set aside by the government.
Market Research
Market research is gathering, interpreting, and analyzing information about the industry and identifying all the gaps in the market that the business will aim at filling. The process helps in good decision making and helps in enlightening the marketing activities of the company.
Secondary Data
Organized reports, statistical data basis, and government-funded studies have enabled the collection of the required information to improve the industry’s knowledge base.
Products
In-room dining. It is an all-round service that involves cabs, bag checking, room services and food provision.
It will attract and create a good legacy for the business as visitors needs good caring when under your service.
Customers
Customers will be both domestic and international, with a significant focus on international customers.
Competition
The tourism and hospitality industry is the central key aspect of the Saudi Arabian economic flow, therefore rivals’ presence. The business will offer affordable products and ensure professionalism enabling world-class standards.
Marketing Strategy
The business will focus on a social network and viral marketing to organize, execute and road map a solid customer base.
Promotion
The hotel will give all our customers free food on the first day of operation and free drinks all through the week to all customers. This will help attract more customers and be able to sell our products. This because whoever will love what we will be offering as our products will keep coming back.
Pricing Strategy
The best way to price our products is by using price set by our competitors as we are not entering the industry to scare others but improve the services they have been giving to the community. The use of production cost as the business is not expected to be making losses but profit. We will not use demand to set our prices as sometimes by using the strategy as sometimes it scares away customers. Our prices will remain constant unless forced to change due to changes in the production cost or regulations set aside by the government.
Sales Tactics
Our products will be sold directly to our customers to improve our relationship with the community and get additional customer feedback. This will help improve the services we will be giving to our customers, making us competitive enough.
Distribution Channel or Strategy
Our products will be sold directly to our customers to minimize problems associated with large channels of distribution. Food products are best sold now to the customer to prevent mishandling, reducing the original product’s quality.
Legal Environment
License is an official permission or permits to do, use, or own something and the document of that permission or access. A party grants it to another as an element of an agreement between the two. To start and run a business, we will be required to have the following legal and licensing requirements; business name registration, business name reservation, business registration as the company is a sole proprietorship, business permit, food/ health-related permit, and fire safety certificate are some of the requirement to start a business.
According to Aleidan (2017), Saudi Arabia has implemented new laws guiding the tourism industry that acts as the primary source of the hospitality market by opening up their borders and offering visas to help them attain 100 million visitors yearly. The law ordered more lands for investment that will help attract more global hotel franchisors.
Personnel
The business will require about 50-75 workers. The company is open to all types of labour, either skilled, unskilled or professional. What matters most is the experience and the ability and willingness to adapt to global trends.
| Job title | No. | Qualifications | Duties | Salary ($) |
| Business manager | 1 | Possess skills in sales and marketing
Good in planning and management Should not micromanage Should handle pressure well Should communicate honestly Should build a work culture of mutual trust Should focus on employee strengths |
Accomplish department objectives by managing staff; planning and evaluating department activities
Maintains staff by recruiting, selecting, orienting and training employees Ensures a safe, secure and legal work environment Develops personal growth opportunities |
Net profit |
| Technical director | 5 | Diploma in information technology
Should not work under supervision Good at problem solving and decision making Be able to plan and forecast Be able to motivate a workforce Computer skills |
Act as the technical point of contact for the team
Representing the business interests Direct the team Facilitate technology transfer |
35,000 |
| Head chef | 3 | Outstanding cooking skills
Real creativity when it comes to food Ability to create menus that are innovative and profitable Deep understanding of ingredients and produce Capacity to work under pressure Excellent leadership and management skills |
Controlling and directing the food preparation process
Approving and polishing dishes before reaching the customer Managing and working closely to other kitchen staff Creating menu items, recipes and developing dishes ensuring variety and quality |
30,000 |
| Kitchen staff | 20 | Ability to use kitchen equipment e.g., meat slicer
ability to bone meat, wash, peel and cut vegetables and prepare a wide range of ingredients knowledge of hygiene and safety standards regarding food preparation and storage |
Undertaking food preparation task as directed
Preparing ingredients, cleaning vegetables, preparing simple dishes, observing correct cooking times and temperature, using cooking equipment, utensils and machinery, cleaning cooking utensils and keeping work stations and surfaces clean and tidy. |
15,000 |
| Waiting staff | 15 | Knowledge of cash register and any ordering information system
Customer oriented approach Critical thinker and problem- solving skills Team player Good time management skills Great interpersonal and communication skills |
Providing excellent wait service to ensure satisfaction
Taking customer orders and delivering food and beverages Making menu recommendations, answering questions and sharing additional information with restaurant patrons |
12,000 |
| Guard | 5 | Good communication skills
Be able to do first aid and be able to fight a fire Experience will be an added advantage |
Ensuring customers security
Direct customers as they park their vehicles General security of the business |
9,000 |
| Cleaner | 5 | Reasonable level of fitness
Time management Awareness of health and safety procedures Reading skills for following instructions Punctual, reliable and trustworthy |
Performing and documenting routine inspection and maintenance activities
Carry out cleaning tasks and special projects Cleaning, stocking, and supplying designated facility areas |
5,000 |
Inventory
The business will offer supplies inventory.
| Item | 1st Year | 2nd Year | 3rd Year |
| Current Assets
Stock Cash in hand Cash at Bank Debtors Total current assets Current liabilities Bank overdraft Creditors Total current liabilities Working Capital |
450,000 600,000 750,000 150,000 1,950,000
400,000 150,000 550,000 1,400,000
|
The rate of turnover is expected to grow with the implementation of new laws guiding the industry. There are factors that fluctuates the flow of customers in the country, mecca being a key. The gulf is largely Islamic therefore the products offered will be much related to their culture.
Suppliers
The business will allow pay on delivery services to our suppliers and focus on eradicating credit no matter the cost.
Financial Plan
Projected Cash Flow Statement
Dec |
| 460,000 |
| 460,000 |
| 270,000 | 145,000 | 4,000 | 3,500 | 2,600 |
|
|
|
|
|
| 425,100 | 34,900 | 223,300 | PROJECTED CASH FLOW STATEMENT FOR YEAR 2026 |
Nov |
| 450,000 |
| 450,000 |
| 270,000 | 140,000 | 3,000 | 3,200 | 2,500 |
|
| 15,000 |
|
|
| 433,700 | 16,300 | 188,400 | |
Oct |
| 440,000 |
| 440,000 |
| 270,000 | 126,000 | 2,000 | 3,000 | 2,500 |
|
|
| 5,000 |
| 10,000 | 418,500 | 21,500 | 172,100 | |
Sep |
| 400,000 | 15,000 | 415,000 |
| 270,000 | 130,000 | 1,500 | 2,000 | 1,900 |
|
|
|
|
|
| 405,400 | 9,600 | 150,600 | |
Aug |
| 415,000 |
| 415,000 |
| 270,000 | 135,000 | 2,000 | 2,300 | 2.100 |
|
|
|
|
|
| 411,400 | 3,600 | 141,000 | |
July |
| 420,000 |
| 420,000 |
| 270,000 | 130,000 |
| 2,000 | 2,000 |
|
|
|
|
|
| 404,000 | 16,000 | 137,400 | |
June |
| 435,000 | 10,000 | 445,000 |
| 270,000 | 125,000 |
| 2,500 | 2,000 |
|
|
| 5,000 |
|
| 404,500 | 40,500 | 121,400 | |
May |
| 410,000 |
| 410,000 |
| 270,000 | 120,000 |
| 2,000 | 2,000 |
|
|
|
|
|
| 394,000 | 16,000 | 80,900 | |
Apr |
| 420,000 |
| 420,000 |
| 270,000 | 135,5000 |
| 2,300 | 2,200 |
|
|
|
|
|
| 404,500 | 15,500 | 64,900 | |
Mar |
| 425,000 |
| 425,000 |
| 270,000
| 133,000 |
| 2,000 | 2,000 |
|
|
|
|
|
| 407,000 | 18,000 | 49,400 | |
Feb |
| 410,000 |
| 410,000 |
| 270,000 | 125,000 |
| 2,500 | 2,100 |
|
|
|
|
|
| 399,600 | 10,400 | 31,400 | |
Jan |
| 410,000 | 100,000 | 510,000 |
| 270,000 | 130,000 | 2,500 | 2,000 | 2,000 | 35,000 | 2,500 | 20,000 | 5,000 | 10,000 | 10,000 | 489,000 | 21,000 | 21,000 | |
Items | Cash in flow | Sales | debtors | Total inflow | Cash outflow | Salaries | purchases | Advertisement
| Water Bill
| Electricity
| Insurance | License and permit
| Acquiring and Training Employees
| Consultation fee with experts
| Acquisition of accessories
| Miscellaneous Expenses
| Total outflow | Net cash | Accumulated cash |
Pro-Forma Income Statement
Items | 2026 | 2027 | 2028 |
Sales Cost of Sales Gross profit Expenses Salaries Advertisement Water Bill Electricity License and Permit Insurance Acquiring and Training Employees Consultation fee with experts Acquisition of accessories Miscellaneous Expenses Total expenses Net profit before tax Net profit Provision for tax (10) Net profit after tax | 5,095,000 1,574,500 3,520,500
3,240,000 15,000 29,300 25,900 2,500 35,000 35,000
15,000 10,000 20,000 3,427,700 3,427,700 92,800 9,280 83,520
|
|
|
Balance Sheet
Item | As at Opening Date 1/01/2026 | As at the end of the year 2026 31st Dec. | As at End of Year 2027 31st Dec. |
Assets Current Assets Cash Stock Debtors Total current assets Fixed assets Land and building Production tools Total fixed assets Total assets Current liability Creditors Bank overdraft Total current liability Long term liability Bank loan Owner’s equity Net profit Total long- term liability Total liability and equity
|
1,350,000 450,000 150,000 1,950,000
200,000 113,799 313,799 2,263,799
150,000 400,000 550,000
750,000 800,000 92,800 1,642,800 2,192,800 |
|
|
Break Even Point
Particulars | Amounts |
Fixed Costs Salaries Insurance License Acquiring and Training Employees Consultation fee with experts Acquisition of accessories Miscellaneous Expenses Total fixed cost Variable Costs Advertisement Water bill Electricity bill Total variable costs |
3,240,000 35,000 2,500 35,000 15,000 10,000 20,000 3,357,500
15,000 29,300 25,900 70,200 |
Total Contribution
= sales – variable cost
= 5,095,000 – 70,200
=5,024,800
Contribution Margin Percentage
= Total contribution *100
Sales
= 5,024,800 *100
5,095,000
= 98.62%
Total Fixed Costs
=3,357,500
B. E. P
= Fixed Costs
Contribution margin
= 3,357,500
98.62
= 34,044.8185
Expected Profitability Ration
Gross Profit Percentage
= Gross profit *100
Sales
= 3,520,500 *100
5,095,000
= 69.10%
Return on Equity
= Net Profit after tax *100
Owner’s equity
= 83,520 *100
800,000
= 10.44
Return on Investments
= Net profit after tax *100
Total investments
= 83,520 *100
2,192,800
= 3.81
Conclusion
Saudi Arabia is one of the most affected countries by the COVID-19 restrictions that prevent individuals from visiting other countries. The pandemic has hit the tourism and hospitality industry the most. With the vaccines being now given, the industry is expected to revive the current trends. Therefore, entering the industry will have significant benefits as the movements will be accessible worldwide. People are expected to move in large numbers hence early preparations will be best for a new business.
The country is full of Arabs. Therefore, products preparation will be more Islamic, fostering an intercultural coexistence among visitors and natives. Individuals nowadays are more into having a fan; thus, investing in a hotel business that will be offering in-room services will attract more individuals whose aim is to have fun. The business primary strategy is the provision of high-quality food products and ensuring a high level of cleanness. Also, our food products will be soldat affordable prices to attract every person within the area regardless of their income levels. Lastly, I will ensure that I higher technical director and qualified personnel who will satisfy the demand we are expecting from our customers. Most couples prefer a night out with their number expected to rise, allowing the business to thrive even much better.
The motivation of staffs presents proper enthusiasm throughout each detailed product. Interaction on both personal and potential guest basis gives a more profound look that reviews and analysis a combination of marketing methods vital for the adaptation, improvements and performance of each established department. Compensation for slim margins allows for automatic prediction of customer flow strong in preparing and purchasing inventory.
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