Motel Business Plan Template

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.

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.

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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.

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

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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.

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.

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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

6.4 Sales Yearly

6.5 Sales Forecast

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

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8.2 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

8.3.2 Profit Yearly

8.3.3 Gross Margin Monthly

8.3.4 Gross Margin Yearly

8.4 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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