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SEPT.08, 2021

Motel Business Plan Template

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Table of Content

    Motel business plan for starting your own business

    One of the businesses that cannot go out of business in the foreseeable future is that of a motel. As long as people keep traveling, they’ll need to stay somewhere and that means they’ll need motels. Motel business plans are one of the first requirements for starting this business. We’ll tell you in detail how to write a business plan for a motel in this post. This strategic business plan will talk about what type of business is a motel and how you can run it in a profitable manner.

    Let’s have a detailed look at this business plan for hotel.

    Executive Summary

    2.1 The Business

    Wanderer’s Inn will be a registered motel on Interstate 91 100 kilometers east of Austin, Texas. It will provide housing and lodging services for the tourists coming to the area or traveling on the road. If you want to know how to buy a motel or start one of your own, we’ll tell you all the details about it.

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    2.2 Management of Motel

    One of the most important parts of motel ownership is motel management. This part of the business plan will talk about that. As this motel is not a very big one, the management will not be a very complicated one. All we need to have is a manager to run the day to day affairs of the business and two receptionist to welcome the customers.

    2.3 Customers of Motel

    When writing a business plan for buying a franchise, it is important to have a clear idea of the customers of the business. The customers of motel business plan can be from a number of different categories and market segments, and it is of paramount important to have service and products to serve all of them in order to run the business successfully.

    The customers we will be entertaining at Wanderer’s Inn will be the following:

    • Travelers coming to dine in.
    • Travelers who need a room to stay.
    • Locals who want to dine.
    • Truck drivers who need to stay.

    2.4 Business Target

    Just like a resort business plan, it is important to have a clear business target before we start the motel business plan. The goal of this business is to make money, of course. However, we cannot go around telling that to the customers, it ruins the image of the business.

    The targets of Wanderer’s Inn will be to:

    • Provide best-in-class dining and resting services to the customers.
    • Expand the services to other locations.
    • Achieve more than 95% customer satisfaction score.
    • Outcompete any of the competition.

    Motel Business Plan Template - 3 Years Profit Forecast

    Immigration Business Plan
    Document for passing government compliance requirements for immigration to the US, Canada, or the UK.

    Company Summary

    3.1 Company Owner

    The owner of Wanderer’s Inn will be Whip Whittaker. Whip has worked as a hotel manager for more than half his life. He has a lot of experience in running such establishments. He also has a lot of connection in the industry and can come up with the best team to run the business. He knows how to run a motel.

    3.2 Why the Motel is being started?

    The reason Whip has acquired this restaurant motel business plan and is going to start this business is that he stumbled upon a duffle bag on the railway track and it happened to have a million dollars in it. The very next thing he did was to download a motel business plan sample pdf as his dream to start his own motel business in USA could finally be realized.

    3.3 How the Motel Business will be started?

    Step1: Making a Feasibility  

    The first thing you need to do to start any business is to make a feasibility report. Just to be clear, you can start a business skipping this step, by all means. However, that just exponentially increases your chances of losing the money you invest in the business, making that not the smartest choice. So Whip conducted a feasibility study and found out that there indeed is an opportunity to start a motel in the said location.

    Step2: Developing a Brand

    The next thing to do in order to establish a profitable motel is to make a brand around the name. It is important because people believe in brands the most and if we plan to expand the business to multiple locations in the future, having a brand is immensely helpful.

    Step3: Establishing the Motel    

    Once the work on branding has started, a date for the opening of the winery will be given and the work on making the winery will start. The winery’s construction will be started and it will be built as soon as possible.

    Step4: Advertisement

    No business can be successful if it is not known to the people who are going to be the customers. In order to make the business successful, we will advertise the business using all advertisements available in the area. All measures will be taken to make sure that the people travelling in the area know Wanderer’s Inn and stop by to buy our services.

    Motel Business Plan Template - Startup Cost

    Start-up Expenses
    Legal $239,000
    Consultants $0
    Insurance $32,000
    Rent $29,000
    Research and Development $28,000
    Expensed Equipment $50,000
    Signs $3,500
    TOTAL START-UP EXPENSES $381,500
    Start-up Assets $351,000
    Cash Required $362,000
    Start-up Inventory $41,000
    Other Current Assets $233,000
    Long-term Assets $29,000
    TOTAL ASSETS $1,016,000
    Total Requirements $1,397,500
    START-UP FUNDING
    Start-up Expenses to Fund $381,500
    Start-up Assets to Fund $1,016,000
    TOTAL FUNDING REQUIRED $1,397,500
    Assets
    Non-cash Assets from Start-up $1,408,000
    Cash Requirements from Start-up $375,600
    Additional Cash Raised $49,000
    Cash Balance on Starting Date $34,000
    TOTAL ASSETS $1,866,600
    Liabilities and Capital
    Liabilities $31,000
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $49,000
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $80,000
    Capital
    Planned Investment $1,397,500
    Investor 1 $0
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $1,397,500
    Loss at Start-up (Start-up Expenses) $389,100
    TOTAL CAPITAL $1,786,600
    TOTAL CAPITAL AND LIABILITIES $1,866,600
    Total Funding $1,397,500
    Any questions? Get in Touch!

    Services

    If you need a complete business plan for buying a motel, it is important to have a clear view of the services the business will be providing. Wanderer’s Inn will provide all the services on and off the premises to make sure that no part of the business is untapped.

    To give you an idea of what services a motel can provide, this free business plans for motels has some of the services the business can provide. This is just a starting point; you can further expand on it to include more services as well.

    Here are some of the services we are making a part of this motel business plan pdf.

    Hotel Rooms

    The main service of the motel will be to provide hotel rooms for weary travelers who are travelling to unknown destinations.

    Dining Services

    Dining services will be provided to people who are staying in the hotel or just stopping by to dine in.

    Off-Premises Catering

    The people in the area who need catering and dining services for functions and parties off the premises can also hire our services.

    Car Workshop

    As most of the customers of the motel are travelling on a long trip, we will provide car workshop services for the ones who need.

    Marketing Analysis of Motel

    The next step needed to start a motel business plan successfully is to run a proper and complete marketing analysis of the business.

    Business Plan for Investors

    This business plan motel has a detailed marketing analysis of the business. This is because we think this is the most important part of motel hotel business plan. Even if you need a business plan for motel purchase, you need to run a marketing analysis so that the business can return you a profit according to your expectations.

    5.1 Market Trends

    Once your business hotel motel plan sample has made marketing trends of the business a part of the document so that you can have an idea of the business you are about to start. If we have a look at the trends of the motel business, it has expanded a lot in the past years. Bulk of the expand of this field can be attributed to the increase in interstate travel. Right now, is the perfect time to awaken the hotel business to success.

    5.2 Marketing Segmentation

    Now is the time that we discuss the marketing segmentation of the business. Customers of the business we are going to run will be divided into the following segments.

    Motel Business Plan Template - Marketing Segmentation

    5.2.1 Travelers

    People who are travelling in the area and want a room to stay will be the largest market segment for us.

    5.2.2 Locals

    We will also provide the services to the locals.

    5.2.3 Workshop Customers

    People who want car workshop services will also be one of the market segments for us.

    5.2.4 Catering Customers

    People who need off-premises catering services will be yet another market segment for the business.

    Market Analysis
    Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
    Travelers 38% 41,000 43,000 45,000 48,000 50,000 10.00%
    Locals 24% 25,000 26,000 28,000 29,000 31,000 10.00%
    Workshop Customers 20% 20,000 22,000 25,000 27,000 30,000 10.00%
    Catering Customers 18% 15,000 17,000 19,000 21,000 24,000 11.00%
    Total 100% 101,000 108,000 117,000 125,000 135,000 10%

    5.3 Business Target

    • To establish credible name in the motel industry in the area.
    • To expand to at least 3 more places by 2 years.
    • To make $174k in profits by the end of year 2.
    • To become the best motel in the entire state.

    5.4 Product Pricing

    The services of Wanderer’s Inn will be priced at the market average of the other motels in the area. We will provide better services than the competition but at the same prices to grow our business at the start.

    Marketing Strategy

    If you need a business to be successful, having a marketing strategy is of paramount importance. This section of this boarding kennel business plan addresses this factor. You can use this motel marketing plan template for advertising your motel or come up with one of your own. If you want to know how much does it cost to own a motel, the answer is ‘a lot’. That will not be a part of this motel business plan pdf because the cost can vary from location to location.

    What’s included in this motel business plan template is the competitive analysis and sales strategy for the business.

    Any questions? Get in Touch!

    6.1 Competitive Analysis

    1. We have noted that there is no motel in 100 miles on both sides of the location we have selected for Wanderer’s Inn.
    2. The motels available in the area are of very low quality and standard and we can gain competitive edge by providing better services.
    3. There is a lot of demand of motel services in the area.

    6.2 Sales Strategy

    • We will use all local and national advertisement platforms to make sure that the motel is known to as many people as possible.
    • We will offer top-class services at a discounted price to get as many customers as we can for the business.
    • We will provide 100% customer satisfaction to make sure we get repeat customers and make a good name for the business.

    6.3 Sales Monthly

    Motel Business Plan Template - Sales Monthly

    6.4 Sales Yearly

    Motel Business Plan Template - Sales Yearly

    6.5 Sales Forecast

    Motel Business Plan Template - Unit Sales

    Sales Forecast
    Unit Sales Year 1 Year 2 Year 3
    Hotel Rooms 53,000 56,180 59,551
    Dining Services 49,000 51,940 55,056
    Off-Premises Catering 40,000 42,400 44,944
    Car Workshop 32,000 33,920 35,955
    TOTAL UNIT SALES 174,000 184,440 195,506
    Unit Prices Year 1 Year 2 Year 3
    Hotel Rooms $51.00 $59.16 $68.63
    Dining Services $39.00 $45.24 $52.48
    Off-Premises Catering $60.00 $69.60 $80.74
    Car Workshop $45.00 $52.20 $60.55
    Sales
    Hotel Rooms $2,703,000.00 $3,323,608.80 $4,086,709.38
    Dining Services $1,911,000.00 $2,349,765.60 $2,889,271.78
    Off-Premises Catering $2,400,000.00 $2,951,040.00 $3,628,598.78
    Car Workshop $1,440,000.00 $1,770,624.00 $2,177,159.27
    TOTAL SALES $8,454,000.00 $10,395,038.40 $12,781,739.22
    Direct Unit Costs Year 1 Year 2 Year 3
    Hotel Rooms $49.00 $56.00 $64.00
    Dining Services $37.00 $42.00 $48.00
    Off-Premises Catering $58.00 $66.00 $76.00
    Car Workshop $43.00 $49.00 $56.00
    Direct Cost of Sales
    Hotel Rooms $2,597,000.00 $3,146,080.00 $3,811,251.20
    Dining Services $1,813,000.00 $2,181,480.00 $2,642,707.20
    Off-Premises Catering $2,320,000.00 $2,798,400.00 $3,415,744.00
    Car Workshop $1,376,000.00 $1,662,080.00 $2,013,491.20
    Subtotal Direct Cost of Sales $8,106,000.00 $9,788,040.00 $11,883,193.60

    Personnel plan

    It is easy to come up with motel hotel business ideas but not all of them are translated into functional businesses. This is because this industry needs a lot of man power and having a personnel plan is a must for making the business possible and profitable. Just like a business plan for green house, you will need to have a lot of men to run the business. Let’s have a look at the details of the people you will need to make this business model for motel a reality.

    7.1 Company Staff

    The following people will be needed to run Wanderer’s Inn:

    • Whip Whittaker will be the owner and CEO of the business.
    • 1 manager for the hotel.
    • 1 manager for the restaurant.
    • 6 waiters.
    • 3 cooks.
    • 3 mechanics.
    • 2 Office workers.
    • 2 guards.
    • 1 reception clerk.
    • 1 Accountant.

    7.2 Average Salary of Employees

    Personnel Plan
    Year 1 Year 2 Year 3
    Hotel Manager $13,000 $14,300 $15,730
    Restaurant Manager $13,000 $14,300 $15,730
    Waiters $58,000 $63,800 $70,180
    Cooks $32,000 $35,200 $38,720
    Mechanics $27,000 $29,700 $32,670
    Office workers $18,000 $19,800 $21,780
    Guards $20,000 $22,000 $24,200
    Reception clerk $6,000 $6,600 $7,260
    Accountant $9,000 $9,900 $10,890
    Total Salaries $196,000 $215,600 $237,160

    Financial Plan

    The last thing we need to discuss to complete this business plan is the cost of motel business plan. If you want to know how much does it cost to build a motel, you better ask a civil engineer, preferably an experienced one. This financial plan, just like the one in the business plans for RV park, covers the prices involved in starting this business.

    • Money needed to buy land to make the motel.
    • The cost of building the motel.
    • The cost of furniture needed for the motel.
    • The salary of employees.
    • The cost of establishing a workshop.
    • Bonds, securities, insurance, and registration costs.

    8.1 Important Assumptions

    General Assumptions
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 8.90% 8.14% 8.22%
    Long-term Interest Rate 8.37% 8.42% 8.47%
    Tax Rate 24.04% 24.30% 25.20%
    Other 0 0 0
    Any questions? Get in Touch!

    8.2 Break-even Analysis

    Motel Business Plan Template - Break-even Analysis

    Break-Even Analysis
    Monthly Units Break-even 5334
    Monthly Revenue Break-even $132,800
    Assumptions:
    Average Per-Unit Revenue $233.00
    Average Per-Unit Variable Cost $0.64
    Estimated Monthly Fixed Cost $162,400

    8.3 Projected Profit and Loss

    Pro Forma Profit And Loss
    Year 1 Year 2 Year 3
    Sales $8,454,000 $10,395,038 $12,781,739
    Direct Cost of Sales $8,106,000 $9,788,040 $11,883,194
    Other $0 $0 $0
    TOTAL COST OF SALES $8,106,000 $9,788,040 $11,883,194
    Gross Margin $348,000 $606,998 $898,546
    Gross Margin % 4.12% 5.84% 7.03%
    Expenses
    Payroll $196,000 $215,600 $237,160
    Sales and Marketing and Other Expenses $129,000 $135,000 $140,000
    Depreciation $2,100 $2,200 $2,300
    Leased Equipment $0 $0 $0
    Utilities $2,800 $3,000 $3,100
    Insurance $2,100 $2,100 $2,100
    Rent $2,700 $2,800 $2,900
    Payroll Taxes $27,000 $28,000 $29,000
    Other $0 $0 $0
    Total Operating Expenses $361,700 $388,700 $416,560
    Profit Before Interest and Taxes ($13,700) $218,298 $481,986
    EBITDA ($13,700) $218,298 $481,986
    Interest Expense $0 $0 $0
    Taxes Incurred ($2,740) $43,660 $96,397
    Net Profit ($10,960) $174,639 $385,588
    Net Profit/Sales -0.13% 1.68% 3.02%

    8.3.1 Profit Monthly

    Motel Business Plan Template - Profit Monthly

    8.3.2 Profit Yearly

    Motel Business Plan Template - Profit Yearly

    8.3.3 Gross Margin Monthly

    Motel Business Plan Template - Gross Margin Monthly

    8.3.4 Gross Margin Yearly

    Motel Business Plan Template - Gross Margin Yearly

    8.4 Projected Cash Flow

    Motel Business Plan Template - Projected Cash Flow

    Pro Forma Cash Flow
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $54,000 $58,320 $62,986
    Cash from Receivables $21,000 $22,680 $24,494
    SUBTOTAL CASH FROM OPERATIONS $75,000 $81,750 $88,290
    Additional Cash Received
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    SUBTOTAL CASH RECEIVED $75,000 $82,000 $89,000
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $40,000 $42,000 $43,000
    Bill Payments $25,000 $26,000 $28,000
    SUBTOTAL SPENT ON OPERATIONS $65,000 $68,000 $71,000
    Additional Cash Spent
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $0 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $0 $0 $0
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $65,000 $70,200 $75,816
    Net Cash Flow $20,000 $22,000 $23,000
    Cash Balance $26,000 $27,000 $28,000

    8.5 Projected Balance Sheet

    Pro Forma Balance Sheet
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $275,000 $308,000 $338,800
    Accounts Receivable $23,000 $25,760 $28,954
    Inventory $3,700 $4,144 $4,900
    Other Current Assets $1,000 $1,000 $1,000
    TOTAL CURRENT ASSETS $280,000 $313,600 $352,486
    Long-term Assets
    Long-term Assets $10,000 $10,000 $10,000
    Accumulated Depreciation $21,000 $23,520 $26,460
    TOTAL LONG-TERM ASSETS $26,000 $29,120 $32,760
    TOTAL ASSETS $291,000 $325,920 $366,660
    Liabilities and Capital Year 4 Year 5 Year 6
    Current Liabilities
    Accounts Payable $20,300 $22,736 $25,555
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $19,000 $21,280 $23,919
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $19,000 $21,280 $23,919
    Paid-in Capital $30,000 $30,000 $31,000
    Retained Earnings $53,400 $58,206 $64,027
    Earnings $195,600 $213,204 $234,524
    TOTAL CAPITAL $286,500 $312,285 $343,514
    TOTAL LIABILITIES AND CAPITAL $305,500 $325,920 $366,660
    Net Worth $317,000 $345,530 $380,083

     

    8.6 Business Ratios

    Ratio Analysis
    Year 1 Year 2 Year 3 INDUSTRY PROFILE
    Sales Growth 7.32% 8.11% 8.99% 3.00%
    Percent of Total Assets
    Accounts Receivable 9.28% 10.28% 11.39% 9.80%
    Inventory 5.44% 6.03% 6.68% 9.90%
    Other Current Assets 2.21% 2.45% 2.71% 2.40%
    Total Current Assets 150.00% 151.00% 152.00% 158.00%
    Long-term Assets 11.54% 11.59% 11.64% 12.00%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 4.89% 4.93% 4.97% 4.34%
    Long-term Liabilities 0.00% 0.00% 0.00% 0.00%
    Total Liabilities 7.57% 7.63% 7.70% 7.38%
    NET WORTH 100.40% 101.20% 102.13% 110.00%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 94.50% 97.05% 99.77% 99.00%
    Selling, General & Administrative Expenses 93.00% 95.51% 98.19% 97.80%
    Advertising Expenses 1.39% 1.43% 1.47% 1.40%
    Profit Before Interest and Taxes 41.44% 42.56% 43.75% 33.90%
    Main Ratios
    Current 34 35 36 32
    Quick 32.2 32.8 33.62 33
    Total Debt to Total Assets 0.18% 0.18% 0.17% 0.40%
    Pre-tax Return on Net Worth 72.75% 74.50% 75.00% 75.00%
    Pre-tax Return on Assets 94.90% 99.65% 104.63% 111.30%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 33.45% 34.49% 35.56% N.A.
    Return on Equity 56.00% 57.74% 59.53% N.A.
    Activity Ratios
    Accounts Receivable Turnover 7.7 7.8 7.8 N.A.
    Collection Days 100 100 100 N.A.
    Inventory Turnover 33 34.65 35 N.A.
    Accounts Payable Turnover 15 16 16.3 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 2.4 2.5 2.6 N.A.
    Debt Ratios
    Debt to Net Worth -0.04 -0.03 -0.04 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios
    Net Working Capital $243,800 $257,453 $271,870 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.86 0.87 0.87 N.A.
    Current Debt/Total Assets 1% 0% 0% N.A.
    Acid Test 29 29.12 29.36 N.A.
    Sales/Net Worth 2.1 2.2 2.3 N.A.
    Dividend Payout 0 0 0 N.A.

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