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
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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 
Research and Development$28,000
Expensed Equipment$50,000
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 Expenses to Fund$381,500
Start-up Assets to Fund$1,016,000
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 
Current Borrowing$0
Long-term Liabilities$0
Accounts Payable (Outstanding Bills)$49,000
Other Current Liabilities (interest-free)$0
Planned Investment$1,397,500
Investor 1$0
Investor 2$0
Additional Investment Requirement$0
Loss at Start-up (Start-up Expenses)$389,100
Total Funding$1,397,500
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    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.

    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 CustomersGrowthYear 1Year 2Year 3Year 4Year 5CAGR
    Workshop Customers20%20,00022,00025,00027,00030,00010.00%
    Catering Customers18%15,00017,00019,00021,00024,00011.00%

    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 SalesYear 1Year 2Year 3
      Hotel Rooms53,00056,18059,551
      Dining Services49,00051,94055,056
      Off-Premises Catering40,00042,40044,944
      Car Workshop32,00033,92035,955
      TOTAL UNIT SALES174,000184,440195,506
      Unit PricesYear 1Year 2Year 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
      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 CostsYear 1Year 2Year 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 1Year 2Year 3
      Hotel Manager$13,000$14,300$15,730
      Restaurant Manager$13,000$14,300$15,730
      Office workers$18,000$19,800$21,780
      Reception clerk$6,000$6,600$7,260
      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 1Year 2Year 3
      Plan Month123
      Current Interest Rate8.90%8.14%8.22%
      Long-term Interest Rate8.37%8.42%8.47%
      Tax Rate24.04%24.30%25.20%
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        8.2 Break-even Analysis

        Motel Business Plan Template - Break-even Analysis
        Break-Even Analysis 
        Monthly Units Break-even5334
        Monthly Revenue Break-even$132,800
        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 1Year 2Year 3
        Sales$8,454,000 $10,395,038 $12,781,739
        Direct Cost of Sales$8,106,000 $9,788,040 $11,883,194
        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%
        Sales and Marketing and Other Expenses$129,000$135,000$140,000
        Leased Equipment$0$0$0
        Payroll Taxes$27,000$28,000$29,000
        Total Operating Expenses$361,700 $388,700 $416,560
        Profit Before Interest and Taxes($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 ReceivedYear 1Year 2Year 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
        ExpendituresYear 1Year 2Year 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
        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   
        AssetsYear 1Year 2Year 3
        Current Assets   
        Accounts Receivable$23,000$25,760$28,954
        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 CapitalYear 4Year 5Year 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
        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 1Year 2Year 3INDUSTRY PROFILE
        Sales Growth7.32%8.11%8.99%3.00%
        Percent of Total Assets    
        Accounts Receivable9.28%10.28%11.39%9.80%
        Other Current Assets2.21%2.45%2.71%2.40%
        Total Current Assets150.00%151.00%152.00%158.00%
        Long-term Assets11.54%11.59%11.64%12.00%
        TOTAL ASSETS100.00%100.00%100.00%100.00%
        Current Liabilities4.89%4.93%4.97%4.34%
        Long-term Liabilities0.00%0.00%0.00%0.00%
        Total Liabilities7.57%7.63%7.70%7.38%
        NET WORTH100.40%101.20%102.13%110.00%
        Percent of Sales    
        Gross Margin94.50%97.05%99.77%99.00%
        Selling, General & Administrative Expenses93.00%95.51%98.19%97.80%
        Advertising Expenses1.39%1.43%1.47%1.40%
        Profit Before Interest and Taxes41.44%42.56%43.75%33.90%
        Main Ratios    
        Total Debt to Total Assets0.18%0.18%0.17%0.40%
        Pre-tax Return on Net Worth72.75%74.50%75.00%75.00%
        Pre-tax Return on Assets94.90%99.65%104.63%111.30%
        Additional RatiosYear 1Year 2Year 3 
        Net Profit Margin33.45%34.49%35.56%N.A.
        Return on Equity56.00%57.74%59.53%N.A.
        Activity Ratios    
        Accounts Receivable Turnover7.77.87.8N.A.
        Collection Days100100100N.A.
        Inventory Turnover3334.6535N.A.
        Accounts Payable Turnover151616.3N.A.
        Payment Days272727N.A.
        Total Asset Turnover2.42.52.6N.A.
        Debt Ratios    
        Debt to Net Worth-0.04-0.03-0.04N.A.
        Current Liab. to Liab.111N.A.
        Liquidity Ratios    
        Net Working Capital$243,800$257,453$271,870N.A.
        Interest Coverage000N.A.
        Additional Ratios    
        Assets to Sales0.860.870.87N.A.
        Current Debt/Total Assets1%0%0%N.A.
        Acid Test2929.1229.36N.A.
        Sales/Net Worth2.12.22.3N.A.
        Dividend Payout000N.A.

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