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Business Planning

Planning is one of the most important aspects of starting and growing your business. Proper planning helps to define your business and identify goals that will help you to make good business decisions.

Developing a detailed business plan that covers the areas of marketing, management, human resources and finance will enable you to determine your vision for your business and identify opportunities, threats, strengths and weaknesses in order to react quickly to market changes.


Tools: The Department of Employment, Economic Development and Innovation website provides interactive tools to assist. These include: Planning is vital Writing a business plan

Business Goals

To assist in achieving business success it is important to be clear about what you want to achieve and set SMART business Goals:

Specific - what exactly would you like to achieve?
Measurable - how will you know if you have succeeded?
Action oriented - does it have an action that you can actually ‘do’?
Realistic - is it really achievable?
Time bound - does it have a deadline?

Example: To increase share of backpackers by 20% by December 2009.

Research

Market research is an important ingredient in your business planning process. It is important to find out as much as you can about your market place, competitors and potential customers. This information will help to determine the business you are in, your target market, your business goals and, what actions you need to take to achieve your goals.

Some possible questions to ask:

How much are people paying for other similar experiences in other places?

How many people visit your town or community, and which times of the year are the peak periods?

Will any of the new planned tourism products or services compete with you or bring you more customers?

How will your customers get to you - what are the transport options to where you are?


Tools: A Customer Profile Chart might assist you in putting together information about your customers. Resources: Tourism Queensland provides research on a number of areas of the tourism industry and access to regionally specific research and information. This includes: International market research Domestic and International aviation research Destinations - including a regional update, regional snapshot, visitor surveys, aviation information and fact sheets

Owners of the Heritage Tea Rooms, Allan and Michelle Sharpe discuss the importance of conducting research when starting a business. By taking the time to undertake thorough research of the market, Allan and Michelle were able to develop a business that provided a different and unique experience for visitors to the Townsville region.

Part 1 - Market Research

Research and development is key to knowing who your market is, and how to accommodate their needs. Tourism Queensland alongside the Regional Tourism Organisations are a reference point to finding out this essential knowledge.

Part 10 - Research and development


Additional resources: Regional Tourism Organisations Australian Bureau of Statistics Cooperative Research Centre for Sustainable Tourism Tourism Research Australia Industry sector organisations

Financial Management

As a tourism operator you must ensure you have a financial management plan in place. This plan should be reviewed on a regular basis to monitor your businesses cash flow and to ensure business viability.


Tools: The Department of Employment, Economic Development and Innovation provides online diagnostic tools to help assess the strengths and weaknesses of your business. The Financial Benchmarking Tool will assist in finding out how well your business is performing compared with other competitors. SmartSkills is an interactive online tool which has finance and cash modules for helping business owners develop new skills, including: Financing your business Annual cash flow forecast Annual profit budget Control your cash flow Business records you should keep

Seasonality

The tourism industry is very susceptible to seasonal fluctuations, some of which are beyond the tourism operator’s control. Measures should be put in place to allow for these performance fluctuations to ensure business sustainability.
Visitor arrivals vary significantly depending on the time of year. They also vary between markets.

Factors that influence seasonality:

Weather / season (of Australia and source markets)

School and university holidays

Public and religious holidays

Special events

Pricing of air transportation and accommodation

What is affected by seasonality?

Air capacity

Availability of accommodation

Pricing

Employment

Budget management / cash flow

At both the destination and enterprise levels, there are several general strategies that are used, including:

pricing—such as seasonal price variation; pricing to attract a target market;

diversifying the attraction— e.g. introduction of special events and development of incentives for a particular target market;

market diversification— e.g. target different markets for different seasons; and

facilitation by the state (government or tourism agencies).

The areas of greatest concern in relation to the impact of seasonality are:

the ability of tourism enterprises to individually overcome the problems associated with large swings in seasonal demand

the ability of the local destination to provide infrastructure to handle the substantial swings in demand

the desire for collaboration between tourism enterprises with destination and state agencies.

How does seasonality affect your VIC, your local area and your region?


Resources: For further information about seasonality in Australia refer to "Seasonality in the tourism industry: impacts and strategies" Available from the Sustainable Tourism Cooperative Research Centre

Additional Information

To find out the 25 Traits of a successful business click here