This HND Travel and Tourism Entrepreneur Assignment covers the different skills required by an entrepreneur and the various other decisions and policies that an entrepreneur has to take for developing the new business in the travel and tourism industry.
1.1 Discuss the skills needed for successful entrepreneurship
Entrepreneurship is a process of identifying and commencing a new business venture. It involves organising and sourcing of required resources. Entrepreneur is an individual who organises and operates a business (Cohen, 2006). An entrepreneur must have the ability to lead the business in the appropriate direction. He should be able to do proper planning and adapt to the changing environment. An entrepreneur commercializes his innovation.
- Self Confidence
- Sense of Ownership
- Communication Skills
- Passionate Learner
- Team Player
- Leader by Example
- Willing to take the risk
- Managerial Skills
1.2 Produce a self-appraisal that identifies strengths and weakness and strategies for development benchmark to successful entrepreneur
I have to start a new travel and tourism company that will provide the various holidays and business packages. The company will also take care of the domestic and international tourists and help them in getting the best tourist destinations and experience. The idea behind this company is to establish a travel company that stands out of the other companies in industry. As an entrepreneur I have to assess my skills so that I can evaluate my own strengths and weaknesses. Below is the self-appraisal of y strengths and weaknesses:
As per my own evaluation I have the following strengths:
- Self Confidence: I have the self-confidence in me as this is the hallmark of an entrepreneur. I have the confidence in my abilities to succeed and face the challenges. My self-confidence will lead me towards the right direction and help me in gaining the popularity and respect among the peers and my subordinates.
- Sense of Ownership: I have this skill in me as i am ready to take the responsibility for getting the things done in an appropriate manner. I consider myself as a sole owner of every success and failure. I am ready to take pride in finding the best solution for the problems and improve the situations rather than running from them.
- Communication Skills: I possess the good communication skills as this is the most essential skill required for successful entrepreneurship. I can easily deal with all kind of human resources for managing business activities. I have ability to communicate in such a manner that it will build successful relationship with the people. Good communications skills will give me the advantage of gaining the best of available resources.
- Passionate Learner: I am a quick learner and consider learning as an ongoing process. Entrepreneurship cannot be learned in the classroom. I am ready to learn from the information, doing the personal research and asking the questions.
- Team Player: Since I have done the job as a leader with a leading organisation, I am confident of this skill. This is another very essential skill required by an entrepreneur. In the current demanding environment a person cannot succeed without the team. I know how to involve with the team effectively.
- Optimistic: I am an optimistic personality and look out positivity in every circumstance. Positive outlook of entrepreneur is important for successful operations of business. My positive mind set and optimism will help me in giving the momentum and impetus for increased hopefulness and greater accomplishments.
- Creativity: This is the spark for starting the business that drives towards development of new and innovative products and services. Creativity pushes towards the improvement and innovation. For my new venture in travel industry. My skill will help me a lot as this industry demands lots of creativity.
The above mentioned were my strengths, however I have certain weaknesses as well that I require to work upon to become successful entrepreneur. My weaknesses are:
- Leader by Example: Entrepreneurs are required to lead themselves through self-motivation and should also have the skills to lead others. However I have assessed and found that I lack in this skill and need to work upon this as this is crucial for the success of my business.
- Willing to take the risk: Risk is an integral part of the business. However, I f eel little scared of taking the risk and i certainly want to avoid this situation. But the fact is that risk is the natural ingredient of the goals and objectives. I must learn to accept the challenges and risks.
- Managerial Skills: I am counting this as my weakness because I don’t have experience in this field. This involves the skills regarding the planning, organising, staffing and controlling. These are the foundation stones of the organisation and the entrepreneur must excel in these. This skill involves the most important aspect that is planning for the goals and then ensuring the performance as per the plans.
From the self-evaluation, I can rate myself on the rank of 7. This is because I have certain weaknesses that are required to be covered. These weaknesses can either be covered in the given course of time with experience, but till then this can be a threat to my new venture. As an entrepreneur I need to be aware of weaknesses and find the solution to overcome that. However my strengths are also good and I can use them in finding the new opportunities for my business. As mentioned, I have the ability to learn, so I will definitely overcome my weakness and in some time, I will be successful with the appropriate experience. With my realistic vision I will Draft a good business strategy for commencing my new venture.
2.1 Analyse the development of an entrepreneurial enterprise
Since I am looking for the new travel company set up, I have analysed the development of enterprise in that field.
Entrepreneurial development is about developing entrepreneurial traits and skills. The travel Industry is the fastest growing industry of the decade. Nothing can stop its demand. The industry has many opportunities and the challenges. Travel experts have to offer the wide array of services to the consumers (Williams, 2007).
Entrepreneurs are the bosses of themselves. They have to look out for the opportunities in business and design the entire work platform.
- The first phase is to decide on the factor that why to become an entrepreneur and the main reason behind starting the business. This phase involves the evaluation of the basic idea behind starting the business. At this phase, the emerging entrepreneur has to look out for the opportunities in the selected industry.
- The second phase involves the decisions and downfalls. Here entrepreneur has to take the decision regarding the funding, capital market analysis and the real potential of the business.
- The third phase involves the decision regarding the market and the product. In travel industry, it is important to plan about the various vacation packages and the cost attached to them for successful launch of the business.
- The fourth phase involves the strategy development for the entry in the market. One important factor is the uniqueness of the idea. By making an endeavour stand out from its competitors, uniqueness can help smooth the progress of the entry of a new product or service into the market.
- The last phase involves the planning regarding the marketing strategy. For the new business venture, this is significant. An entrepreneur has to make the potential customers aware of the products and services they are offering.
The entrepreneur is required to make the business analysis that includes – demand forecasting, projection of annual revenue, estimating the total cost, calculation of the fixed expenses and the feasibility analysis. For all the above mentioned points, the entrepreneur requires the managerial skills. This involves the skills regarding the planning, organising, staffing and controlling. These are the foundation stones of the organisation and the entrepreneur must excel in these. This skill involves the most important aspect that is planning for the goals and then ensuring the performance as per the plans.
Along with this in the travel industry the entrepreneur requires to be creative. This is the spark for starting the business that drives towards development of new and innovative products and services (Drucker, 1985). Creativity pushes towards the improvement and innovation. It also involves the continuous learning and thinking.
Business management involves the promotion and achieving the goals of entrepreneur. For this entrepreneur has to develop the vision and optimism in his work. A positive outlook of entrepreneur is important for successful operations of business. An entrepreneur must not have the setback attitude towards the failures and challenges in the business operations. A positive mind set and optimism of an entrepreneur helps in giving the momentum and impetus for increased hopefulness and greater accomplishments. Entrepreneurship cannot be learned in the classroom. He must learn from seeking the information, doing the personal research and asking the questions. He must be able to learn from his own mistake rather than being arrogant. To teach is to learn is the key to successful entrepreneurship.
See here another Travel and Tourism Entrepreneur Assignment
2.2 Evaluate the factors that have led to the success of an enterprise
The main factors for the success of an enterprise are the managerial and the professional skills of an entrepreneur. This can be explained by the example of a famous entrepreneur in travel and tourism industry.
Richard Branson - Virgin Group
The Virgin Group started its first business venture with a magazine known as “Student”. Later Richard Branson started a mail order record business and in year 1972, he managed to open the chain of record stores which were named as Virgin Mega stores. In 1980, he expanded his business by launching the Virgin Atlantic airlines.
The entrepreneur started his business at a small scale, but with time he achieved the success and makes the business popular globally. This was because of the hard work and passion towards his business. After analysing the skills of this entrepreneur, the observations are as follows:
- He is very confident and has the managerial skills. He started his business with proper planning and made the strategies that have helped him in achieving the goals. His vision and mission towards the objectives never failed and he continued to work towards that. The best part was the organising. He organised the plans well and ensure that everything is going in the right direction as per the plans. He designed the workplace only or achieving the success. He keeps himself involved with the human resource that has direct as well as indirect impact on his business. He has good planning, organising, leading and controlling skills. He has the knowledge and gained the expertise with his business operations.
- Another observation is that, he is professional in his business approach. The entrepreneur’s professional skills are very crucial for the success of an organisation. Their professional and committed approach towards their customers was the key to success. He keeps the constant contact with the business alliances and the customers in order to keep their services best in class. He has the sense of ownership and possess the good communication skills.
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Richard Branson is a unique individual and his greatest strength lies in being able to cut through the waffle and getting the point of matter.
3.1 Evaluate sources of finance and support available to the enterprise in the travel and tourism sector
The travel and tourism entrepreneur have to struggle a lot for finding the source of capital required for commencing a business. There are many different sources to be considered that are available to an enterprise in travel and tourism (Allen, 2001).
The available sources are:
Personal Savings: This is the best source of capital available to an entrepreneur. This is the most easy form and very quick to access. Along with this there is neither any payback terms involved nor any kind of equity transfer required. It also gives the positive impact to the investors about the entrepreneur’s preserving habit and willingness to take the risk. This is also known as the seed capital.
Family and Friends: This is the second easiest way of getting fund for the business. It does not have any paperwork formality and the funds are easily accessible. Along with this there is neither any payback terms involved nor any kind of equity transfer required. There is one disadvantage of this source, if the funds are lost due to the business failure the relationship comes at the stake.
Bank Loan: Banks are known as the conservative lenders. For granting the loan to the new entrepreneur they require the pledge of any outside asset against the borrowings. This source of fund required lots of formal paperwork and has the payback terms along with interest money attached to it. Entrepreneurs usually fail to get this due to insufficiency of assets. However, if entrepreneur has the bank balance, he can get the easy loan against that. These loans are usually the short term loans provided to the entrepreneurs.
Venture Investors: This is the most common source of funds for new entrepreneurs who have the strong potential for business growth. The funding is based on the venture investors who keep the part of ownership in the funded business. There are formal institutional ventures that maintain the passive partnership in the firm they fund. This is usually in the form of retirement funds. The corporate venture funds are the large corporations that provide the funds to new ventures and take some control over the new business.
Overdraft facility: This is provided by the banks that allows the account holder to withdraw the money more than they have in their savings account. This is a kind of credit agreement between the financial institution and the account holder. This helps the new entrepreneur to raise the short term cash for commencing the business.
Private Placement: This involves the sale of securities to the investors for raising the capital. Investors involved in this are the banks, insurance companies, pension funds and mutual funds.
Angel Investors: They are the successful entrepreneurs who have the extra capital and are willing to take the risk. Funds from angel investors are easy and quick to access as compared to the corporate venture funds. This is a good source of raising fund for the new business.
3.2 Develop and justify the potential for success of a concept from an enterprise in travel and tourism context
In the past 20 years tourism industry has become the most dynamic industry of an economy. Apart from the various challenges, the industry has lots of opportunities to grow and expand in future. The tourism industry is growing with rapid speed and is giving the endless opportunities.
In recent years, the attention has moved from the quantitative growth of tourism demand, towards the qualitative transform in the nature of that demand.
Macro Trends in Tourism
The development of travel and tourism industry in the recent decade is largely influenced by the total development of the society. The rise in the per capita income has given the rise to tourism industry as a leisure activity. The globalization has also increased the demand and supply of tourism industry (OECD, 2010). The key drivers of increasing the international tourism are:
- Rise in incomes
- Developed means of transport
- Intensive use of Information and Communication technologies.
The above changes have led to development more network intensive society.
The growth of the network society is the most basic change that has taken place across political, social, cultural and economic realms (Castells, 1996). The travel and tourism industry is also largely touched by this and as a result the latest trend among the industry is based on networking.
The social networking is an integral part of leisure and work. Through networking, the tour operations become easy, operators are actually able to find more customers and contacts. Also it plays vital role in decision making. The current trend in travel sector has very complex model of value chain that have different supplier beyond the travel sector. The travel industry is not dependent on the old economic infrastructure that used to have the airline seats, hotel beds and the shelves of travel agents. Now the industry relies on the new and flexible network economy. The society and the travel industry have become more interlinked.
The important drivers of travel industry:
- Ageing society is important factor as in Europe the young and children are in shorter supply than elderly.
- There is growing demand for the individual holidays as compared to the packaged holidays.
- The new structure of the families are small and even the singles are in majority.
- People have become more health conscious; as a result the destinations that have any kind of potential health hazard are avoided by the people.
- The society has become more value oriented.
- In Western Europe, the age of retirement has been increased and hence the number of senior travellers is reduced.
- With technological advancement, the information is readily available over the World Wide Web and hence the booking information has become very easy.
- The mode of transport has become cheaper and faster
- The new destination search and the tracking facilities are also available now
- The technology for environmental control is most important for current travel industry.
- The competition has increased a lot and as a result the tourist demands more at low prices.
- The divergence of demand for luxury and cheap offers
- Growing exposure of the financial market
- The unspoiled nature and destinations are scarce and hence are more valuable.
- The climatic change has led to opening of new tourist destinations.
- Due to increased traffic jams, the travelling has become cumbersome.
- Depletion of ozone layer has made the tourist to avoid certain destinations that are near the equator.
- Due to political uncertainties the travel gets increased or restricted at some point of time.
- Due to terrorism growth, the immigration and visa procedures are become tougher and security oriented.
- Travelling becomes dangerous with the clash of cultures.
These are the latest trends in the travel market. Leisure tourism is a mass market however it is still not well organized. The individualistic approach is gaining the momentum and the package holidays are losing the charm (Richards, 2005).
3.3 Present a persuasive business start-up plan
Below are the critical points that make the best start up plan for a travel company:
- Executive summary: This includes the description and essence of the travel company. This is divided in two main categories – mission statement and the objective of the company. The mission is to establish a travel company that provides the best services to the customers for domestic as well as international travel. The objective is to make the global foot prints in next ten years.
- Company Analysis: This includes the detailed information on the company’s unique selling points.
- Industry Analysis: This includes the information regarding the current trends in industry and market and its impact on my travel company. This is important from the investor’s point of view.
- Customer Analysis: This includes the detailed analysis about the target market that is comprised of geographical, socio – economic, demographic and psycho – graphic details. This basically includes the analysis of consumer behaviour regarding the services provided by the travel companies.
- Competitive Analysis: This includes the analysis of global and local competitors with the SWOT analysis. This helps in differentiating among the competitors.
- Strategic Plan: This includes the plans regarding the marketing, distribution and revenue management.
- Operations Plan: This involves the plan regarding the operations of the company that includes the detailed analysis of number of personnel required for successful running of company. It also includes the standard of services provided.
- Financial Plans and key milestones:Financial plans include the calculation of the start-up cost and analysing the source of funds. Key milestones include – location selection, Licenses and permits, staffing and training. The success and failure of the business depends 80% on the cash flow analysis. It is a very important business tool. It tells the business about available finances and resources to run and expand the business.
|Details||Amount in £’000|
|Cash balance at the start||5000|
|Cash receipt from Customers||2200|
|Other operating revenue||0|
|Total Operating Revenue||4945|
|Other operating Expense||100|
|Cash Balance at the end||7566|
The above cash flow analysis clearly states the initial financial feasibility of the travel company. Initially the revenue may not be very high but with the growth and proper marketing this can be increased significantly. The cost of services can be covered with the revenue from the tourist packages. The estimated cash flow can be very helpful for proper allocation of financial resources. The proposed project can be successful if the finances are allocated properly with the above estimations.
|Objective||To create a company that is service based and its mission is to exceed to customers’ satisfaction along with capturing the market share and sustainable business. The company aspire to achieve a 35% return rate of customers within the first three years.|
|Mission||To provide the highest quality adventure in domestic as well as international locations.|
|Start-up summary||The start-up cost is explained in the cash flow above|
|Services||In beginning there will be six main packages offered to customers - skiing trips to Canada, India, and New Zealand, mountain biking trip and white-water rafting trips to New Zealand and Costa Rica.|
|Target market||Young professionals and adventure lovers|
To conclude, this is observed that entrepreneurship is a complex process that requires lots of decisions and initiatives from an entrepreneur. For accomplishing this entrepreneur requires the specific skill set that is crucial for the success of the new enterprise. In the past 20 years tourism industry has become the most dynamic industry of an economy. Apart from the various challenges, the industry has lots of opportunities to grow and expand in future. The tourism industry is growing with rapid speed and is giving the endless opportunities. So for setting the new travel company an entrepreneur has to do the market research and understand the latest trends of market.