Before the COVID-19 pandemic hit, hospitality businesses were booming. However, due to protocols such as social distancing, many shut down. If you’ve been thinking about launching a hospitality business, be it a restaurant or motel, but the economic downturn had put you off, worry not. There’s still hope even during these uncertain times, and in fact, it might as well be the best time to launch your hospitality business while keeping the following factors in mind.
Starting costs
Start-up costs for a hospitality business differ depending on various factors such as size. However, no matter how big or small you intend your business to be, you can’t afford to make losses. Amid an economic downturn, especially, every coin counts. It is advisable to start small to mitigate risks as you go bigger, depending on how everything turns out. Create a one-year investment plan, keeping in mind costs like branding, licenses, legal fees, insurance, property leases, and running costs. Compare business insurance quotes to keep costs at a minimum while launching your business, but don’t lose sight of your end goal.
Service prices
Every hospitality business owner is out to secure as many clients as possible. While undercutting them isn’t a long-term, solid strategy, ensure your pricing is competitive. As a start-up during an economic downturn, your hospitality business can benefit from extra flexibility and low overhead costs. Using the laws of demand and supply, come up with prices that speak to the buyers’ purchasing power and your need to succeed in the hospitality industry.
Innovative concept
An innovative concept fills a need in the market offers customers something different that doesn’t exist. While you may find it challenging to identify a gap, you can conduct online research, brainstorm, or ask potential clients what they need. If your idea already exists, twist it and create something different to offer clients a unique experience. For example, you can use automation technology for efficient customer care.
Networking
Networking is essential, especially during an economic downturn, to help you understand how other businesses in your industry cope with global changes. It is also necessary to help you form friendships that can turn into new opportunities, such as partnerships or referrals to customers and suppliers. Get out of your comfort zone and start attending physical or virtual networking events. Create business cards, and don’t be afraid to give insight into your business.
Location
Location is among the vital factors you need to consider before launching your hospitality business to be successful. Keeping in mind your target audience, choose a business location that is easily accessible with proximity to their homes, especially due to the COVID-19 stay-at-home advisory. Consider how it will impact your business in the short and long term. Keep in mind the kind of neighbourhood to locate your business and make it visible physically and online.
Launching a hospitality business during an economic downturn may yield expected outcomes, but it is no walk in the park. You must be ready to shoulder a lot of work and put in the effort to make it successful. Remember to use social media to market your business and consider other vital factors such as location, networking, and pricing.
