1. Tourism business planning online course in responsible tourism development session #05 Gerardine Parisi

2. Agenda From business idea to business plan What is a business plan How to write a business plan Create your own business plan A practical example

3. From business idea to business plan Create a successful business is a very difficult task. You have to be strong motivated and very oriented to planning and scheduling. Principal steps of an aware process: How to start up your own business

4. From business idea to business plan The business idea Your business idea can be based on a dream or an aspiration but you have to translate it in something of concrete

6. Lack of market research

7. Overestimation of demand

8. Poor quality in the management of the business

9. Error in determining the selling price

10. Little attention to costs and expenses

11. Poor financial management

12. Insufficient sales

13. Startup capital deficientThe importance of planning LACK OR POORNESS OF BUSINESS PLAN

14. What is a business plan? Business planallowstoverify: Market feasibility TO SELL Organizational and technicalfeasibility TO MANAGE Financial and economicfeasibility TO EARN Business plan

15. What is a business plan? Aim of business plan

16. How to write a business plan Main questions

17. Create your own business plan 1. Market feasibility

18. Create your own business plan 2. Marketing mix

19. Create your own business plan Most important point to evaluate: Special permissions to start up Investmentnecessaryto start the business Most appropriate legalformtomanage the business 3. Organizational and technicalfeasibility

20. Create your own business plan 4. Financial and economicfeasibility Year 1 Year 2 Year 3 Year…… Investmentcost Operatingcost Operatingcost Operatingcost Operatingcost

22. special machine;

23. basic equipment.4.1 Initial investmentcost

24. Create your own business plan How can I get the money I need to start up my own business? 4.1 Initial investmentcost

25. Create your own business plan 4.2 Break evenpoint NO PROFITS NO LOSES BREAK EVEN POINT

26. Create your own business plan To calculate the break even point it is necessary to know which kind of costs are related to your business. Costs can be divided into four main categories: Fixed cost Variable cost Financial cost Taxes 4.3 Operatingcost

27. Create your own business plan Fixed costs are business expenses that are not dependent on the level of goods or services produced by the business. 4.3.1 Fixedcost $ FIXED COST UNIT OF PRODUCTION

28. Create your own business plan Variable costs, instead, are volume-related. The sum of fixed cost and variable cost represent the total cost that is the total economic cost of production. 4.3.2 Variablecost $ TOTAL COST VARIABLE COST FIXED COST UNIT OF PRODUCTION

29. Create your own business plan Financial cost consists in interestswhich the entrepreneurhavetopaytobanksforloans Taxes are calculated on the taxableincome and differ from country to country 4.3.3 Financial cost and taxes

30. Create your own business plan The other main point to calculate the break even is to define the price of product or service. Price is influenced by internal and external factors 4.4 Pricingstrategy

31. Create your own business plan There are some criteria used to define the price. The principal are: Cost plus pricing: the price isfixedcalculating the costof production and addingtoit a percentage Competition-basedpricing: the price isdecidedtakinginto account the price adoptedbycompetitors Objective profit pricing: the price is set at a levelthatallowstogain a certainlevelofexpected profit. 4.4 Pricingstrategy

32. Create your own business plan 4.4 Pricingstrategy: 9 laws of price sensitivity & consumer psychology

33. Create your own business plan 4.5 Turnover and net profit

34. Gerardine bed and breakfast A practical example

35. Gerardine bed and breakfast WHAT: Boutique, charming, eco bed and breakfast, 5 rooms, high level of standard. Special offer for people interested in enogastronomy, tradition and mountain. WHERE: Abandoned house of my grandmother in a rural area of Trentino, tourism not well developed WHO: I will be the enterpreneur, this will be a second work Business idea

36. Gerardine bed and breakfast Market feasibility

37. Gerardine bed and breakfast Marketing mix

38. Gerardine bed and breakfast

39. Gerardine bed and breakfast How can I get the money I need to start up my own business?

40. Gerardine bed and breakfast Every year I have to sustain this cost: Fixed cost: 5.000€ Variable cost: 30.000 (40€ for every host  750 arrivals for year) Financial cost: 5.000€ Taxes: 6.000 (10% of 60.000€ that is the foreseen turnover)

41. Gerardine bed and breakfast Break evenpoint: Cost/price = numberofhost 26.000€ / 80€ = 325 arrivals Provisional net profit: Turnover-costs = net profit  60.000€ - 46.000€ = 14.000€

42. Thank you very much! GerardineParisi mail: gerardine.parisi@gmail.com