High Heights Travel Agency Business Plan - Case Study Example

1.0 Executive summary Over the last few decades the tourism industry has been experiencing an augmented growth this is mainly attributed to the fact that there is the emergence of borderless world, an increased level of information dissemination among individuals in almost all the places in the world with the Australian region being no exception (Mintzer, 2007). HH services to the customers will be positioned in such a way that the customers’ needs are provided with characteristics such as high quality services, informative services and the services will also be tailored based on each customers individual needs thus at the end of its all the companies objectives will ultimately be achieved and the customers will have a much greater gratefulness on the surrounding natural environment (WOOD, 2010). Contents 1.0 Executive summary 1 1.1 Objectives 5 1.2 Mission statement 5 1.3 Keys to success 6 2.0 Company 8 2.1 company ownership 8 2.2 Startup summary 8 2.3 Company locations and operations 9 3.0 Services 9 3.1 Service description 9 3.2 Competitive comparisons 10 4.0 Market analysis 10 4.1 Market segmentation 10 4.2 Target market segment strategy 11 4.2.1 Market needs 11 4.2.2 Market trends 12 4.2.3 Market growth 12 4.3 Service business analysis 12 4.3.1 Business participants 13 4.3.2 Distribution patterns 13 4.3.3 Competition and buying patterns 13 4.3.4 Main competitors 14 5.0 Strategy and implementation 14 5.1 Value proposition 14 5.2 Competitive edge 15 5.3 Marketing strategy 15 5.3.1 Positioning statement 15 5.3.2 Pricing strategy 16 5.3.3 Promotion strategy 16 5.3. 4 Distribution strategy 17 5.3.5 Marketing programs 17 5.4 sales strategy 17 5.4.1 Sales forecast 17 5.5 strategic alliances 17 5.6 Milestones 18 6.0 Management 18 6.1 organizational structures 18 6.2 Personnel plan 19 7.0 Financial plan 19 7.1 important assumptions 19 7.2 Projected profit and loss 20 7.3 Projected cash flow 20 High heights projected cash flow is clearly depicted in table in the appendix section. 20 7.4 Projected balance sheet 20 The projected balance sheet for the company is clearly shown in table in the appendix section of the business plan. 20 8.0 Controls 20 Tourism in Australia has been increasing speedily over time this is mainly attributed to the fact that a large number of people are seeking to take their vacations in Australia. Keeping this in mind HH travel agency is determined to enlarge the marketing programs. There will be the introduction of brochures and other sales literature that will ensure that HH market its service to the potential clients. The marketing programs with be evaluated form time to time so as to ensure that the set objectives are achieved and within the required time limit. 20 Bibliography 21 CHAFFEY, D. & ELLIS-CHADWICK, F. Internet marketing. New Jersey: Pearson Education. 2008. 21 HOOLEY, G. NICOULAUD, B. & PIERCY, N. Marketing Strategy and Competitive Positioning. New Jersey: Pearson Education.2011. 21 Appendix 22 Table 1 Start- up requirements 22 Table 2: General assumption made 22 Table 3: projected Balance sheet 23 Table 4: projected Profit and loss 24 1.1 Objectives HH travel agency has set certain objectives which they aim to achieve and attain, the objectives include The company aims at having an accelerating level in sales The company will develop its brand name to ensure that there is a higher retention level of the clients and also in one way help in increasing HH’s pricing power. Increase the level of customer satisfaction by offering services of high quality which will make the company prosperous. Development of premeditated alliances with the most efficient service providers so as to ensure the delivery of better services to their clients. 1.2 Mission statement The mission of high heights travel agencies is to offer exclusive, extravagance tours and travel proficiencies to the customers which will lead to a high level of customer’s satisfaction. The company employee will be nurtured and created in vigorous, enthusiastic, reverential and pleasant surrounding and they will be remunerated accordingly thus there will be respect for the clients since they are the core of the business. Measurement of the level of customer satisfaction will be done by evaluating the number of time a client’s returns to the company to be offered a similar service as before. HH travel agency will differentiate itself from the other companies offering similar services by majoring mostly on adventure and leisure. HH will consequently provide incomparable services to their esteemed clients with the chief aim of forestalling the desires and wants of all clients. This will be achieved by the use of an effective and efficient program which will be run by the highly skilled personnel in the company which will ultimately ensure that both the staff and the employed enjoy the service been delivered and the offering of the service so in essence everyone will be appealed due to the high level of professionalism been used in the line of service delivery. 1.3 Keys to success Like any other company high heights travel agencies have certain aspects that they consider to be key to their success in the market. One of the major key to success is market segmentation HH will achieve these through a clear and concise identification of the niche market and the marketing strategies to be applied to those niche markets. Also advertisements will also me made so as to enlighten the society about the company the internet and personal selling will be the major form of advertisement to be used. Hence in essence HH’s key success factors are: i. Strategic alliances Due to the nature and types of services that the HH provides to its clients and also based on the late entry of the company into the market, HH is aware of the advantages of launching and maintaining tactical coalitions with numerous shareholders such as other travel agencies, hotels, restaurants and lodges so that there will be unwavering flow of customers year in year out and making sure that they utilize any obtainable chance to satisfy the client’s wants. ii. Market know how As a new entrant in the travel and adventure industry HH ought to undertake aggressive marketing campaigns and promotions so as to promote the companies services to the general public and to be among the most chosen prime by the potential clients. The aggressive campaigns and promotions will act as an impermanent warning for new entrants into the market. Advertising will be done on a regular basis so as to keep the client informed and to maintain their loyalty. iii. Timely response to customer request Since the company is new in the market they will offer the services to the customers in a quick and haste manner though quality will be observed. This will help in creating a positive image for the company and also a good reputation, this will ultimately lead to new customers thus creating and strengthening the future endeavors of the company. Henceforth a continuous communication with the client will be observed to make sure that the company is always at the aid of the customer and the customers expectation are achieved at all cost. This will ultimately make the customer more satisfied and they may at time refer the company to a friend and also they may be constant customers to the company if there is any adventure or leisure trips they want to make hence these been an advantage to the company. iv. Communicate the differentiation and quality of the offering This is another major objective of the company. The employees will ensure that this objective is attained through personal selling and also through the media. The company’s staff will intermingle with the clients and the general public so as to make them aware of the diverse ways that HH is better as compared to their competitors in the same industry. The media will solely be used so as to attract a greater number one electronic media thus in one way attracting a large customer base. v. Excellence in fulfilling the promise High heights travel agency propose to provide entirely pleasant, contented and enlightening travel trips that will guarantee that the customers are scrupulously contented and grateful at the end of their excursions. 2.0 Company High heights travel agency is an adventure travel agency that mainly offers transport to adventure locations within Australia; the company provides its services to all groups of people ranging from business people, to families going to vacation, professionals and the like. The company will station itself in such a way that it will ensure that it attracts a great number of customers who may wish to take an adventure trip and thus the company will end up generating a lot of income from that. 2.1 company ownership High heights travel agency is a sole proprietor. It is fully owned and operated by Teddy Bear in Canberra, Australia. There is a likely hood of the company may later develop to become a limited liability company but this will not happen immediately it will first operate as a sole proprietorship kind of business. 2.2 Startup summary Like any other business endeavor the high heights tours and travel will require a huge amount of finances for the startup of the company. HH’s total startup capital requirements are approximately$ 100, 000. The funding will mainly be derived from the owner’s personal savings, his personal investment and a loan from the local bank where he deposits his money. The preliminary startup capital for HH travel agency will be used to fund the startup costs and payroll expenses during the first year of operation of the company. The total amounts of fund required by the company are clearly depicted in the appendix section. 2.3 Company locations and operations HH has identified a number of possible locations for the company offices. All the potential locations are in the major cities in Australia that is Canberra, Sydney, Melbourne, Brisbane, Perth, Adelaide, Hobart and Darwin. The head office of the company will be situated at Canberra. 3.0 Services HH will offer services to the corporate world and also to individuals. The services that will be offered include rental car, prearranged tours, travel, reservations for lodges and many others. The company aims at differentiating itself from the other adventure companies by offering high quality services to the customers. 3.1 Service description HH is a travel agency that typical travel agency goods and services such as airfare and travel packages. Adventure travel is separated into two broad categories that is hard and soft adventure. The two broad categories chiefly engage lively athletic activities. Economic indicators in the market recommend that an augmented command for adventure travel services is available. High heights will situation itself as a niche supplier within the travel and tourism industry and it will provide supreme quality travel packages. High heights will serve as a top quality and all service providers in adventure. 3.2 Competitive comparisons The travel agency market is competitive and technology is essentially implemented this has really changed the way most travel agencies operate. The internet offers travel agencies and other individuals the capability to conduct research linked to travel (Chaffey & Ellis-chadwick, 2008). CRS have augmented the momentum and effectiveness of the agency to client transaction. They have also augmented the initial cost for travel agencies. Furthermore, industry rivalry and the augmented number of travel choices available made it obligatory for minor travel agencies to set up themselves as experts in one or more kinds of travel. HHTA has done this by majoring in adventure. HH travel agency will compete with other travel agencies in Australia since they have already established relationship with customer. 4.0 Market analysis HHTA plans to center its preliminary hard work on the adventure travel market in the Australia. Adventure travel is principally placed in the leisure travel category. The funds generated from the leisure activities in Australia are high. 4.1 Market segmentation HHTA target customers married couples with a relatively high amount of income this is mainly because these categories of people are basically fascinated by fashionable adventure activities. Most of the adventure travelers are usually men with age ranging from eighteen to thirty four years. Nevertheless over time women have started to show a keen interest in adventure activities. Consequently with the augmented level of the number of women who are interested in adventure activities there will be an increased number of customers. The major customers of HH travel agency are the married couples and with children and with a salary of approximately $ 50,000 incomes. 4.2 Target market segment strategy A company ought to determine the strategy to use so as to reach the target customers. HH travel agency will mainly use the strategy of offering the right services to the customers. The company will also make sure that the prices they place on their services are considerate of the individuals’ budget. The marketing of the company’s services will depict quality in all aspects. The major and chief aim of HH travel agency is to aim at individuals who are passionate about adventure activities. The information to be delivered to the clients will be developed and conveyed to the client. The company will also form alliances with several lodges and other travel agencies in the area so as to tap the targeted successfully and professionally. 4.2.1 Market needs In most cases the most potential customers are usually uncertain of the sites they desire to visit in their adventure trips. HH travel agency is best positioned in that it has adequate knowledge of almost all places that the client wants to visit during their adventure activities. Clients will search for the agency for them to offer adequate knowledge coupled with a competitive price and the company is confident that it will be able to offer that to the customers. The company will ensure that the customers are not delayed in the delivery of service. 4.2.2 Market trends A lot of uncertainty surrounds the tourism industry in Australia. Thus it is vital to gauge how large the industry will grow over time. Based on how the extent of the industry, adventure will still have a place in the market. Tourism statistics in Australia provide a dependable guide as to the size of the market. According to the Australian bureau of statistics the number of tourist arriving in Australia for adventure purposes have increased and they will still increase over time and based on the season. 4.2.3 Market growth The travel and tourism industry in Australia is growing at a first rate. Leisure activities in the country have also increased. According to statics the adventure travel is also growing at a reasonable rate annually and it is one of the best performing segments in the travel industry. Hence the HH will be in a position to gain profits if the industry continues to grow with the same trend. 4.3 Service business analysis Tourism is a significant industry in the Australian economy in that it contributes to a great extent to the Australian economy each day. For example in the year 20110/11 the tourism industry in Australia represented 2.5 % of the Australian GDP. The travel industry also contributed greatly to the Australian economy. The market is essentially divided into two categories that are business and leisure travel. This market segment is later grouped into two broad categories that I the domestic travel and international travel. Leisure travelers are grouped based on the kinds of trips they opt to make, their age and t heir income levels. 4.3.1 Business participants The travel industry is similar to many others industry. In the industry there are large national home located companies and consolidators who are found on the internet. The large membership numbers in associations give a clear and accurate number of the high number of participants in the industry. HH travel agency has competitors both locally and internationally (Hollensen, 2010). 4.3.2 Distribution patterns The supplier, agent and consumer distribution pattern is the most common distribution pattern that is applied in the travel industry. The distribution between supplier and agency will be regulated. 4.3.3 Competition and buying patterns There are many activities and kinds of travel offered to people considering an adventure vacation. The most significant issue in this market is the superiority of the service and the places of adventure. This is mainly so bearing in mind the safety of individuals and groups since they aim at adventuring many places at a go. Pricing of the services is done based on the distance travelled. 4.3.4 Main competitors Like in any other business, the travel industry also has competitors. The main competitors of HH travel agencies are: Harvey world travel: it is among the greatest and long recognized retail travel agency in Australia. Austour: this is a family owned kind of company. It has been in existence since the early 1960’s. The company will be a major competitor since they have experience of over 45 years in the adventure industry. Adventure Travel Company: this company has been in existence since the late 1990’s. It has an added advantage in that it is affiliated to major companies such as house of travel. This will act as a major competitor to HH travel industry due to the highly motivated team and dedicated consultants the company. 5.0 Strategy and implementation In the aim of achieving its goal of been the largest adventure travel agency in Australia, HH travel agency will take on the following strategies: Offering of high quality services so as to build trust and attract a great number of clients. Promote the commitment in adventure sports as a fit attempt to all human beings Set up its status as a distinguished supplier of quality services. This will be accomplished by the application of dissimilar marketing communication program at HH’s target market and also by the utilization of various media. 5.1 Value proposition The value proposition of HH’s services is resultant from HH’s knowledge with and adore for adventure. HH’s employees are convinced in their capability to meet the desires of the clients since they share the client’s eagerness for the services HH offers. The company is convinced and capability transforms into assurance for clients and it cats as a starting point in the growth of long-term connections and trust. 5.2 Competitive edge HH’s competitive edge is the company’s center, ardor and knowledge in adventure activities. HH aims at promoting and offering access to escapade sports and travel. HH offers a distinguished with the management knowledge, funds and obligation to make it work. 5.3 Marketing strategy HH travel agency is in the belief that the major and chief objective of an organization is to make and keep clients. The marketing strategy of HH will mirror this goal as it assembles its status in Australia. Although the company functions in the travel industry, it offers grater services. HH provides both adventure and freedom. The company promotes the benefits of adventure travel. These benefits include aspects such as better health, enthusiasm, personal growth and a whole lot of fun (Hooley, Nicoulaud & Piercy, 2011). 5.3.1 Positioning statement HH is the leader in the adventure and travel industry in Australia and it is available for all individuals and corporations who may want to take vocational trips. The company’s knowledge with and keenness for adventure travel is clearly depicted in the excellent service, value and guidance that it offers t their clients. 5.3.2 Pricing strategy Much of HH’s pricing is determined by market standards. Due to the preliminary nature of the company’s services the company plans to apply a penetration pricing strategy that will attract potential customers with lower pieces and hiking the prices while the company is fully operational and has a high number of customers. The cost structure of the company will match that income structure of the company, this will guarantee that the remuneration of the employees guarantee the delivery of high quality service. 5.3.3 Promotion strategy There will be a grand opening of the company which will be merged together with athletic events which will be fully organized and supported by the company that is HH. The events will be used as a great opportunity to give information of the services that the company provides to the general public. Also the local radio stations will also make advertisement on behalf of the company at a fee. In the aim of attracting a greater number of customers HH travel agency will station their sales representatives in almost all major towns in Australia so as to develop personal familiarity between the company’s employees and the society that they are serving. 5.3. 4 Distribution strategy HH distribution strategy will mainly center on the target market in Australia and the company will sell directly to this target market. Also, HH will seek to launch allocation capability on the internet so as to advance its ability to set up a national standing. 5.3.5 Marketing programs Traditional marketing methods ought to be applied so as to market the services offered by the company to their clients. Most people nowadays opt to purchase their tickets over the internet; hence the internet will act as a good and viable media to market the company. 5.4 sales strategy HH will sell the benefits of the services it offers and the activities it promotes. The company will aim at providing a fit and an impartial life style for all their clients. The company concern will not be solely the maximization of profits but also the satisfaction of customer needs. By doing this there will reduction of cost and ultimately an increase in profits generated. Thus relationship will be maintained since it is less costly to maintain relationship than to build new ones. 5.4.1 Sales forecast Detailed projections are located in the total sales by month table in the appendix section. 5.5 strategic alliances Most businesses today ought to create strategic alliance with others for them to remain competitive in the market. Thus it is an advantage to the firm to create and maintain healthy relations with others for the firm to benefit and also the other firm to benefit hence every party will have an advantage. Strategic alliance will be formed with reputable organizations in the travel and hotel industry. The company will also establish alliances with other adventure trips providers in other countries so as to have a wide range of locations where they can take their clients. 5.6 Milestones HH important milestones are detailed in the appendix section of this business plan. The milestones are used to mirror HH’s viewpoint that is vital for HH to set goals. Goals in essence are used to determine the strategy and tactics that the company is likely to apply and they also aids the company in maintaining a corporate focus. Thus the milestones will be used as a basis of measuring HH’s success in achieving is stated goals. 6.0 Management Human resource aspects are vital aspects in the delivery of quality services to the customers. the management will ensure that all customers are taken care off well this will be achieved by positioning competent and empowered individuals to relate to the customers this will act as a competitive advantage so that to fulfill the customers wants expansively. 6.1 organizational structures HH travel agency will be supervised chiefly by effective partners. A functional organization structure will be implemented in the company in that every individual working in the company will focus mainly on the major area of proficiency. Also open communication will be encouraged so as to make communication easy and easier. As the company increases in size more structures will be incorporated into it and with time the company will have employees all the required employees and all employees will be utilized to the full potential. HH travel agency recognizes that triumphant hiring, inspiration and regulation measures vary key to the enlargement of the utilizing. Therefore HH plan to encourage and preserve good labor relations, brawny morale and high eminence work from every employee. 6.2 Personnel plan The detailed monthly personnel for the first year are included in the appendix section of this plan. The company’s personnel will be remunerated well to make sure that they don’t move to other companies and also to retain their professionalism within the organization this will ultimately lead to job satisfaction which will be achieved through the delegation of duties. 7.0 Financial plan HH’s financial plan is detailed in the following section. Preface estimates propose that HH will experience slow growth during the first year this will be mainly attributed to the fact that the company is new in the industry and also to the changes in seasons which means that at time there are no clients while at other times there is a large number of customers. HH travel agency has the required amount of money to tolerate the unenthusiastic cash flow that may come their way. HH predict an augment in the gross margin and sales volume. In essence the general financial plan offers a conventional but sensible description of HH travel agency financial position. 7.1 important assumptions HH will make definite postulation they include: That the market enlargement estimates for the industry are correct National economic situation which are advantageous to the industry will remain at constant for a period of time. Global conditions will be complimentary for service providers and HH travel agency will strive at maintaining the relationships. Table in the appendix section depicts general assumption that were made 7.2 Projected profit and loss High heights intend to improve its operations as time progress. The projected profit and loss of the company is depicted in the appendix section 7.3 Projected cash flow High heights projected cash flow is clearly depicted in table in the appendix section. 7.4 Projected balance sheet The projected balance sheet for the company is clearly shown in table in the appendix section of the business plan. 8.0 Controls Tourism in Australia has been increasing speedily over time this is mainly attributed to the fact that a large number of people are seeking to take their vacations in Australia. Keeping this in mind HH travel agency is determined to enlarge the marketing programs. There will be the introduction of brochures and other sales literature that will ensure that HH market its service to the potential clients. The marketing programs with be evaluated form time to time so as to ensure that the set objectives are achieved and within the required time limit. Bibliography CHAFFEY, D. & ELLIS-CHADWICK, F. Internet marketing. New Jersey: Pearson Education. 2008. HOLLENSEN, S. Global Marketing. New Jersey: Pearson education. 2010. HOOLEY, G. NICOULAUD, B. & PIERCY, N. Marketing Strategy and Competitive Positioning. New Jersey: Pearson Education.2011. MINTZER, R. Start your own travel business and more: cruise, adventure travel, tours, and senior travel. Irvine: Entrepreneur press. 2007. WOOD, M. Essential guide to marketing planning. New Jersey: Pearson education.2010. Appendix Table 1 Start- up requirements Start-up requirements Start-up expenses Amount legal $ 550 Equipment $ 16,000 Insurance $ 400 Rent $ 2,625 Stationery $ 500 Brochures $1,000 Others $ 500 Total start-up expense $ 23,575 Start-up assets Cash required $ 35,000 Long-term assets $ 26,925 Other current assets $ 17,500 Total Assets $ 76, 425 Total requirements $ 100, 000 Table 2: General assumption made General Assumptions Year 1 Year 2 Year 3 Plan month Tax rate 25 % 25 % 25 % Long term interest rate 15% 15% 15% Current interest rate 15% 15% 15% other 0 0 0 Table 3: projected Balance sheet $ $ Current assets Account receivables 100,000 Stock (food & beverages) 600,000 Total current assets 700,000 Fixed assets Premises 150,000 Machinery 100,000 Furniture 120,000 Vehicles 350,000 Total fixed assets 720,000 Total assets 1,420,000 Current liabilities Account payables 150,000 Short term loan 300,000 Total current liabilities 450,000 Long term liabilities Long term loan 900,000 Total long term liabilities 900,000 Total liabilities 1,000,000 Owners’ Equity 390,000 Total liabilities and owners’ Equity 1,390,000 Table 4: projected Profit and loss $ Revenue 1,000,000 Cost of revenue 400,000 Gross profit 600,000 Other income 150,000 Total income 750,000 Expenses Accounting fees 5,000 Advertising and promotion 10,000 Bank interest 45,000 Depreciation 30,000 Insurance 150,000 Legal fees 5, 000 Motor vehicle expenses 40,000 Rent 45,000 Repairs and maintenance 30,000 Wages and salaries 150,000 Other expenses 10,000 Total expenses 520,000 Net income 230, 000 Read More