What is an Airbnb business plan?

An Airbnb business plan is a formal document that details a roadmap and strategy for your property. The document will outline key goals and objectives, and explain how these will be met. It will also discuss factors like budget, target markets, and brand vision.

Your Airbnb business plan should be comprehensive but clear and easy to understand. You’ll need to refer to it often as you go about building your business to give yourself the best chance at success.

This blog will tell you everything you need to know about creating an Airbnb business plan and how to make sure your property is here to stay.

Why is having an Airbnb business plan important?

An Airbnb business plan is important if you want your project to be successful long-term. Starting a business is hard, but keeping a business alive for 5, 10, or 20+ years is even harder. 

Developing and using a business plan gives you a blueprint to follow and provides a strong foundation from which you can launch from and build upon as your business grows over time.

In fact, it’s been found that 71% of fast-growing businesses have written plans, while only 35% of smaller businesses take the time to create them. Business plans also help achieve double the profit for those who use them. Perhaps the biggest stat of them all is that if you have a business plan, you’re 260% more likely to ACTUALLY launch your business!

So, it’s clear that once you create your business plan, you’ll have a huge advantage over most of your competitors.

What are the benefits of creating an Airbnb management business plan?

There are countless benefits of creating an Airbnb business management plan, not least of which is that it will help you decide if your business idea is even viable and if you should go through with it. 

Once that’s ticked off, the business plan will help you:

  • Decide what resources you need
  • Gain support or funding
  • Feel in control of your fate
  • Evaluate whether you’re on or off track at all times
  • Know when key milestones have been achieved

Having a business plan also allows you to change the plan if you need to. If something happens in a way that you didn’t expect, you can refer to your plan and make adjustments to get yourself back on the path to success.

What are the key components of an Airbnb rental business plan?

There are a number of elements that can make up an Airbnb rental business plan. You might see it explained in more or less steps depending on which content you are reading. For us, there are four main components you need to get right, all of which include important smaller steps within them.

Here are the four pillars you need to start off with:

1. Executive summary and overview

This is perhaps the most important part of the business plan to get right. It will discuss and inform the rest of your plan.

Here you will talk about what you are aiming to achieve, what your approach will be, what will help you see success, what results you expect, and ultimately why your plan is a winning one.

This will usually also include a mission statement, brand vision, and breakdown of your goals.

2. Industry analysis

The industry analysis will look close at the tourism and hospitality industry. You should identify any current trends and statistics that will influence your business plan.

How are travellers behaving? What does the technology landscape look like? What global issues or movements are impacting accommodation providers?

This will help you position your business strongly, to capture as much attention as possible.

3. Customer analysis

This will drill down into your specific customer base. What types of guests do you want to target and hope to win bookings from?

If couples are your main target market, for example, you need to understand:

  • What motivates and inspires them to travel
  • What their budget is
  • What their booking behaviour is and what their preferences are
  • What kind of experiences they enjoy
  • And more

It goes without saying that if you don’t understand your intended customer, or don’t have a plan to attract anyone in particular, your business will struggle to get off the ground.

4. Competitor analysis

You must always dedicate a section of your business plan to your competitive market. Knowing the strengths and weaknesses of properties that are similar to yours will help you understand your own business better.

The knowledge you gain from this exercise will also make it easier for you to gain an edge over the competition within your destination. Is there a gap where you can easily win? What can you offer that they can’t?

How to write a business plan for Airbnb in eight simple steps

Writing a business plan for your Airbnb will require a lot of in-depth thinking, research, and careful articulation on the page. Being a written narrative, your business plan will probably end up being multiple pages long. Some business plans can even reach up to 30 pages.

The amount of detail you go into will depend on the specifics of your business and also a personal preference on how comprehensive you want to be. Focusing on the four pillars above will get you off on the right foot. However there’s even more to it than that.

Here are eight steps you should follow:

1. Start with your mission statement

Your vision and goals should be clearly outlined, including what your business stands for.

2. Describe your business offering

What exactly are you offering guests and what type of property are you? E.g Are you a romantic couples getaway providing a custom-built treehouse? Maybe you’re a family-friendly cabin or a chic city apartment.

3. Perform your analysis

This can include the market, customers, and competitors as we mentioned above. This is crucial for knowing how to sell yourself.

4. Calculate your budget

You need to know your upfront costs, ongoing expenses, and any maintenance and management costs that may arise. E.g ongoing costs may include consumables that guests use such as toiletries.

5. Discuss your marketing plan

Your budget may play into this. How will you attract the attention of potential guests, grow a loyal customer base, and build the reputation of your brand?

6. Detail your operations

What are the things that need to be done on a day-to-day basis to keep the business running and how will they be done?

7. List your management team

Who is the team and what responsibilities does each team member have?

8. Explain your financing

Where is the money for your project coming from? And how will you continue to keep the business afloat? E.g are you self-funded or do you have partnerships? What will you price your property at?

If you can do all this, you should have a pretty solid Airbnb business plan and be ready to start taking the initial steps to launch your business. 

Sample Airbnb business plan

While your own business plan might be many pages long, below we’ve created a brief sample of what it might include and how it might be structured, based on what we’ve discussed so far.

  • Mission statement – [Property name] is a unique, eco-conscious, cabin that seeks to give guests the ultimate wellness escape in a safe and responsible rainforest environment.
  • Business offering – Our accommodation gives guests the chance to reconnect with themselves and nature, while providing all the necessary comforts of home such as a cosy bed, separate bathroom and toilet, kitchenette, sofa and TV, and free wi-fi.
  • Analysis – The market is moving towards a more environmentally friendly approach. This is both driven by and mirrored by consumers becoming more conscious of how their activities affect the planet. Many of our potential competitors have not yet capitalised on this in the way that we plan to.
  • Budget – Much of our upfront cost will come from sourcing a location and constructing our cabin(s). Ongoing costs will be minimal thanks to our eco-friendly approach. A lot of water will be provided via tank, power via solar, and guest items via recycled materials. Maintenance costs might include property repair and maintaining the ground or access to the property.
  • Marketing – Much of our marketing will at first come from the third-party channels we partner with to sell our accommodation. We are confident in building strong word-of-mouth from happy customers and steadily building a social media presence on Facebook and Instagram.
  • Operations – Much of the property will be self-sufficient but cleaning and replenishing of supplies will need to take place after each stay. Guest communication and personalisation will also be important to maintain.
  • Management – The property will be run and managed by the owners, [name] and [name].
  • Financing – [Property name] will be self-funded thanks to previous equity acquired from previous careers and investments. We have the finances readily available to pursue our passion project.

Best practice for Airbnb property management business plan 

One best practice that can make or break your Airbnb business is how you manage your bookings, inventory, and guest reservation data.

If you plan on selling your rooms on Airbnb as well as other sites like Booking.com or Expedia, AND your own website, you’ll need technology to help you manage it all successfully.

Without technology, you’ll be required to perform a lot of time-consuming and manual tasks. This can not only result in errors, but also create guest friction and cause you to lose revenue.

Think about what happens when someone books your room on Airbnb, and you aren’t fast enough to update your availability on Booking.com before someone books the same room there. It creates a frustrating and awkward experience for everyone.

Using hotel software to automate the process takes all the stress away. Find out how below.

By Dean Elphick

Dean is the Senior Content Marketing Specialist of Little Hotelier, the all-in-one software solution purpose-built to make the lives of small accommodation providers easier. Dean has made writing and creating content his passion for the entirety of his professional life, which includes more than six years at Little Hotelier. Through content, Dean aims to provide education, inspiration, assistance, and, ultimately, value for small accommodation businesses looking to improve the way they run their operations (and live their life).