“There is no place like home” is a regularly used phrase. This may be true, as the feeling in one’s home is quite different from being away from it. Anyone who has traveled abroad or knows someone who does can attest that the warmth and hospitality in one country can vary greatly from another. Hotel quality and convenience can be factors. Starting an Airbnb business helps to eradicate this. Airbnb business is an acronym for “Air Bed and Breakfast business”. It’s a business model that allows apartment owners to rent out a room or the entire unit to tourists. Travelers can rent a communal area, rooms, or a whole house. In this article, we are going to be walking you through the steps, and checklist of starting up an Airbnb business plan regardless of your current position.
Starting an Airbnb Business Plan
Like with every business idea, it is important to have a business plan when starting an Airbnb business. Starting an Airbnb business plan might be or is often the difference between those who excel and those that do not excel in this field. Starting an Airbnb business plan helps to provide an ethos, or north star, that helps guide major decisions that would be made before the start of the business and during the day-to-day running of the business. Let’s walk through some steps to take when starting an Airbnb business plan.
Steps in Starting an Airbnb Business Plan
The following are steps to be taken in starting an Airbnb business plan;
#1. Get a Mission Statement
The first step when starting an Airbnb business plan is to get a mission statement for yourself and the business. This mission statement will serve as a rendezvous point for major decisions made in business. A mission statement will help make good decisions in times of uncertainty, most especially if you are unable to answer the following questions;
- What are your values?
- How do you want to operate?
- What motivates you?
- What are your goals and vision?
If these questions are duly answered, it places a business owner on the right path to actually succeed in that Airbnb business. However, trying to always remember it in all you do, makes having a mission statement worthwhile.
#2. Scan the Market
When starting your Airbnb business plan, it is important to do a proper market scan or survey. In certain life scenarios being unique might be good, but, in a business such as this, it can be damning.
People appreciate what they can relate to; therefore, surveying the market will help me have an overview of what the business should look like and how you should go about it. It also helps to make you understand the kind of competition you have and to know how best to cope with it.
Factors that can influence the success of the business such as your demographic, the amenities available to you, and other environmental factors will help you determine your pool of customers and feasible price ranges. You will have to search online for listings close to you to ensure you don’t overcharge or undercharge massively. I recommend the use of the Airbnb Smart Pricing tool.
#3. Create a Budget
This is a pivotal step when starting an Airbnb business plan. An entrepreneur cannot afford to make mistakes in the monetary estimations of an Airbnb business. The budget should contain the various levels of expenses; those incurred in setting up the house before and while in use, also the expenses used to ensure that the place is secure are also crucial.
This planning helps to ensure that the entrepreneur is not taken by surprise in any way or form. I recommend using a spreadsheet for this.
#4. Put Yourself in the Position of a Guest
This is one of the most important attributes an entrepreneur should not forget. It is quite important to imagine you were a guest to avoid you missing minor details such as toiletries and so on. As a method of precaution, you can invite your friend to come and spend a few days there to get an idea of anything you might be missing.
People frequent places that seem comfortable and stress-free, if you put this in mind while planning it helps you plan better. It is important to have hospitality at the forefront of your mind in order to run an Airbnb business effectively.
#5. Key In to the Technological Advancements
As the world is advancing there also exist technological advancements that help make life easier and this is a game changer in the world of Airbnb hosting. A website that helps to make booking easier and sends you notifications once a booking is confirmed are helpful.
The use of smart locks which changes once the duration of a guest’s stay is completed means you don’t have to be there in person always. Although, I would recommend you should always be present if you are just starting and to run the day-to-day activities yourself.
Steps in Starting an Airbnb Business
There are 8 crucial steps in starting an Airbnb business. They include;
#1. Check if You Need Permission
Different environments have different rules and regulations that guide them (their social values) socially. Certain environments do not allow visitors, pets, and other specific things without a special permit or permission. Therefore, it becomes important to check if you will need such a permit, to avoid your guests being embarrassed when they come around.
Some environments do not allow it and if you are living in such places you can’t be starting an Airbnb business. Furthermore, if you are in a rented apartment you will also have to seek permission from the landlord to know if you can carry out the business.
#2. Plan Your Business
After confirming how feasible it is to start your Airbnb business in your environment, you would need to plan your business following the steps aforementioned in this article. The planning of the Airbnb business is important because it is the first step toward a successful business.
When a business plan is carried out it helps you know and understand the specifics of the business and also highlights the unknowns. A good business plan will help you discover;
- The cost involved in starting up.
- The cost of the day-to-day running.
- Your target market.
- How you are going to make your money.
- Price ranges.
- Profitability and even a business name.
#3. Establish a Legal Entity
Starting an Airbnb business as a legal business entity will go a long way in protecting the entrepreneur. Because doing this will prevent him from being personally culpable if the Airbnb business is sued. I recommend using feasible business entities like a limited liability company or corporation, rather than a sole proprietorship or even partnership.
You can do this in two ways; either by setting it up yourself and paying a small state limited liability company costs or you can get a limited liability company specialist for an improved fee.
#4. Carryout a Tax Registration
Paying taxes is a fundamental part of business; it is the civic duty of every citizen. Therefore it becomes important that when starting your Airbnb business you register for all the various state and federal taxes by visiting the internal revenue service (IRS) website or office.
For certain states there are also other special taxes you are expected to pay, you are to find out and pay them.
#5. Open a Business Bank Account
Experience has shown that you cannot keep an individual account and a business account together successfully. One of the ventures will eventually suffer the cost. Oftentimes, businesses have collapsed because the owner has mishandled the business funds by overspending on personal things which in turn affected the business.
Also, the reverse can be the case, you can end up spending so much of your personal funds on the business, and eventually find yourself in an uncomfortable situation. This policy helps to protect both personal and business assets.
Opening a separate business bank account helps make accounting and tax filing easier for businesses. I would recommend opening a net 30 account. This is the best type of account when you are starting an Airbnb business, as it helps build your business credit and increase cash flow. With a net 30 account, you are allowed to buy goods and repay the full balance within a 30-day term.
Also, it is quite important that you have a different credit card for your business than using your personal credit card for your business expenses.
#6. Start Business Accounting
Accounting for the funds that come into a business is as important, if not more important than making money in a business. It is compulsory that any business owner that intends to do well in his or her business must be willing to do a proper accounting of the business finances.
This practice helps in making several key business decisions and in applying for tax.
#7. Obtain Necessary Permits
Businesses in certain fields require some permits to be to exist. It is wise and important to obtain those permits when you are just starting up your business. When businesses such as Airbnb do not attain such a permit it often leads to huge fines, this is good for the finances of the business.
#8. Build Your Brand
This may sound easy but the success or failure of any business rests heavily on this concept. This usually involves getting a logo, creating a website, getting a company phone, having an identity, and finally getting insurance for your company as this goes a long way to help your business grow.
Starting an Airbnb Business Without Money
The thought of going into the Airbnb business might seem horrifying on its own, but going into it without money might seem utterly impossible. However, I am here to tell you that it is way easier than you think. Let’s look at 5 ways we can do this with ease.
#1. Be a Property Manager
Property managers are generally seen as the people who own the house, and they are usually at the top of the earning chain in this business. However, you can be a property owner without owning a house.
People who venture into this usually create websites to relieve the owner of the house of the stress of being a property manager. They help perform the tedious tasks and make money from them.
#2. Use Your Own Property
If you already have a property of your own then it becomes way easier. All you simply have to do is to clean up and start marketing. This eases you from any need to invest money into the business thereby you don’t need to have money.
#3. Take Initiative on Rentals in Your Area
Often, you may see rental signposts in your area, your vicinity, or even beyond. This can serve as a business opportunity. You can approach the owner of the house and ask if you can run the rentals as Airbnb listings. In most cases, he may buy into the idea, and boom, you are off the mark.
#4. Become an Affiliate
This is another way of making money on Airbnb without money of your own. It usually involves you recommending people to other Airbnb businesses. This helps you get a commission from that business and helps you generate money.
#5. Offer Airbnb Experience
This is another way of keying into the Airbnb business. You can offer to give tour experiences around your vicinity to guests. This can also be a means of generating money for the Airbnb business.
Starting an Airbnb Business Checklist
You might be wondering how to get started and what you need to do before getting started. Here are 3 starting Airbnb business checklist(things) you must do to get started.
#1. Equip Your Property With Essential Supplies:
This includes getting essential things needed in the bedroom, living room, bathroom, kitchen, a few safety equipment (fire extinguisher, smoke detector, and first aid kit), and some extra amenities to make your guest comfortable.
#2. Add Some Extra Amenities:
To increase the comfort of your user other amenities like Netflix, toys, board games, video games, and so on can be added to give a sense of extra comfort.
#3. Construct a Compelling Description and Take High-Quality Photos:
There are several listings out there; therefore, you have to make yours stand out. The easiest way to do this is to put out good photos and have a captivating title.
The following checklist should be considered when starting an Airbnb business.
Final Thoughts
Every business requires a level of expertise, devotion, attention, and luck sometimes. However, you need to possess the know-how or certain knowledge to give you a chance to succeed in that field. To make sure you don’t forget anything essential, it’s a good idea to examine the Airbnb checklist once more before starting the business.
Having read this article from the beginning to this point, you have all the knowledge you need to start an Airbnb business successfully and even sustain it. It doesn’t matter whether you have money or not, you can also be successful as an Airbnb entrepreneur.
Starting an Airbnb Business FAQs
What are the 3 starting Airbnb business checklist?
The three-star starting Airbnb business checklist includes equipping your property with essential supplies, adding some extra amenities, constructing a compelling description, and taking high-quality photos.
What is an Airbnb Business?
Airbnb business is an acronym for “Air Bed and Breakfast business”. It’s a business model that allows apartment owners to rent out a room or the entire unit to tourists.
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