Travel and Tourism Entrepreneurs Assignment
The need of this paper is to focus on analyzing important skills needed for being a successful entrepreneur in the sector of tourism and travel in order to relate to individual skills in relation to the sector. The paper is based on learning outcomes however the distribution of content in the paper is as per the task requirements identified. This Travel and Tourism Entrepreneurs Assignment focus on the entrepreneur's strategies used by different organizations in travel and tourism sector.
1.b Personal Skills and Characteristics
To become an entrepreneur I need to analyze the following factors as being an entrepreneur it is essential to have these underlying qualities
- If I analyze my feature I can see that I have an aptitude of travelling. I have been travelling various places with my parents therefore, consciously or unconsciously, one thing has been developed in my mind if I want to start any business it should be related to travelling. Travelling business requires plenty of risk taking skills. I am having risk taking capability. Therefore, I have some similarity with Mandy Nikerson
- Although I have an aptitude towards visiting new places but when I want to relate it with business I am sure about my risk taking quality although I am not certain about self motivation as dream and passion leads to generate self motivation however, my passion is not so high that automatically motivates me to drive this business. However, I am not telling that I will not succeed in this business. Who knows! while carrying out the activities I will become passionate about this business and automatically I will become self motivated. Therefore, my positive attitude is my strength by which I am able to get over my limitations.
- Since I am a new entrepreneur therefore, I am in experienced in this business which is a drawback. However, I am young and energetic and I am a qualified person therefore, I can introduce some new ideas into the business. When Mandy started her business she was in experienced but she introduced her own style while carrying out her responsibilities which is a valuable source of inspiration. And I ought to follow her and make my own introduction in this business. (William, 2006)
- Interpersonal skill is one of my strength and in my business objective I must include it and in all circumstances I will look after the well being of my customers and employees as I consider them the two pillars of the business. In this aspect I am able to surpass the limitation of Mandy who was not able to develop her as a people person.
- Since Mandy was not a people person therefore in the matter of selling skills she used to depend on individual level and fulfill the sale target. However, in my case, since I have good communication skills therefore, I will try to develop a good network between employees, customers and other stakeholders who will help me to develop my business. The primary thing I need to do is to understand the needs of the customers and trend of the market.
- To start a business capital is required. Capital refers source of money for initial investment into the business and working capital to meet the operating costs. Since my saving is not compatible with the requirement of investment I need to depend upon borrowing money from the money lenders or banks. Therefore, I need to prepare a comprehensive financial plan in order to receive the desired capital. At the same time I need to cautious about paying off the loan amount to the lenders timely. Moreover, it is required to aware about financial position of the company. Particularly, about the market rate relating to procured materials and customer offer price. I need to assist in the matter of regulating funds of the business. In this respect, my way of thinking is similar with the working policy of Mandy. (Bygrave & Zacharakis, 2004)
- As it is already stated that there is one basic difference about myself and Mandy. She used to analyze the market at individual level which I differ. I like to build up a strong network in order to grow my business and gain more market value as I believe that team work is like a synergic effort which gives better result than individual effort.
Apart from the above qualities I would like to develop my leadership style qualities, communication skills and I would like to introduce democratic leadership style in my business as I believe that employee contribution is very helpful for the growth of the business.
2.a Start- Up Idea
The managing board of Hexagon travel has decided to make a new venture in India. For analyzing the development of an entrepreneurial enterprise following factors need to be analyzed
- Likely sources of startup funding
To collect the required investment amount in order to commence the tourism business in India the following sources are important for fund collection.
- Self-funding: It means the company itself provide the required sum or part of the required sum from its own savings
- Loan from Bank: Bank loan is available in India for starting up a new business.
- Private investors: There are so many investors are available in India who are eager to provide money to the foreign entrepreneurs.
- Venture capital: The function of the Venture capitalist is to take the opportunity by taking a considerable possession of a new business where high risk is involved. It prepares the initial infrastructure of the business.
- Angels: They are regarded as affluent investors who make a direct investment to the same nature of new business where they belong.
- Business incubators: This kind of investors invests their resources in different stages of the operations.
- The principal company can sell one of its subsidiary company and use that selling price for the purpose of investment in the new venture.
- Market opportunity: Likely to say about the market opportunity it is an identification of a need as well as demand trend which the firm seeks to exploit and which has not been addressed yet to the competitors of the firm. Since there is a significant change happened in the Indian economy and earning is increased to a high degree therefore, there lies ample of scopes to tap the disposable money of the Indian. Moreover, Indian people seek to incur their money against high class services. Considering the situation Hexagon travels decide to commence tourism business in India.
- Potential for growth: It means the market should have the following possibilities. These areas are 1) growth in the level of demand, 2) use of digital technology, 3) encouragement of investment and the implementation of agenda related to the reform of regulations, 4) ensuring that the environment is suitable for growth, 5) increasing the level of supply with respect to labor, participation and skills, 6) building the resilience, quality and productivity of the industry (William, 2006) Since all the possibilities are found in the Indian market therefore, the venture of Hexagon travels is justified.
- Unique selling point: It is a factor which distinguishes a company’s product or service from its competitors. The USP of Hexagon travel lies in maintaining ethical responsibility while operating the tourism business in different places. Ethical responsibility is supposed to mean participating in the sustainable developmental program wherever the company carried out its business. Sustainable economic development has a major impact on the life of the local people in terms of their cultures and their life styles. Therefore, ethical responsibility in the tourism service provides an opportunity to the tourists to experience the local culture of the place, its people and their way of spending the life.
- Key Factors of Existence: The process of entrepreneurship in Hexagon travels is very dynamic for the creation of wealth. The process of entrepreneurship has involved searching continuous changes in the market and making its response accordingly in order to exploit the opportunities to gain more market value over its competitors. This company is a successful company because the structure and culture of the company is suitable for healthy working environment as the company does not follow extreme hierarchy in their structure nor its cultural value is stringent to follow. Therefore, no unpleasant behavioral changes are found among the employees of this company.
2.b Analysis of factors
In order to start a business one of the most important factor is introduction of capital. Without money no progression is possible in this aspect. Hexagon Travels have chosen an outskirt place of a metro city in India. After analyzing all the pros and cons of different sources of capital this company prioritizes on bank loan as the loan interest is pretty low comparing with the other sources of capital. Since all its branches are doing well it has rejected to sell any of its running operation. It has approached to a nationalized Bank called State Bank Of India for loan. Since the company is world famous and its record of paying off the loan amount is satisfactory therefore, the Bank has sanctioned the loan. (Poland, 2014). Current Indian economy is viable. Moreover, the state where Hexagon seeks to open its business has a stable Government and the survey analysis report states that there is a huge possibility of the growth of the traveling business in this business oriented region due to the floatation of disposable income of the people therefore, as far market possibility is concerned this place is an ideal place for commencing a business.
The income level of Indian people has risen to a large extent and they seek to use their earnings to avail world class services in every sphere. Therefore, there is a satisfactory demand for availing the facility of world class hotel which is lacking in this place. The Government policy is supportive for commencing a new business and it invites companies of national level as well as international level to do the business here. In addition, skilled labor is highly available with lower rates. There is a scope of enormous growth in the coming years. This company is responsible to maintain ethical issues responsibility wherever it executes its operation. Ethical commitment includes aiding towards sustainable economic development of the region where business is going on, which is considered as a force of influencing the culture as well as environment of that place. Considering this factor if this company starts its operation in India it will maintain this ethical responsibility. (Hunter, 2006). In order to sustain in the market on long term basis it is required to become more responsive to the changes take place in the market and accordingly, create a strategic plan to cope with that changes and become more valuable in the market. It requires a flexible and well composed management structure. The company like Hexagon travels has a healthy working environment. The management maintains flexibility and it considers its employees as an integral part of the business. Thus this kind of work thoughts is compatible for carrying on a business in India.
3.a Evaluate various sources of funding in relation to their suitability for your enterprise
Regarding the matter of choosing the option of inflow of money there exist several sources of finance which are discussed below. While discussing sources evaluation is also done simultaneously.
- Self funding: It means individual himself or company itself provide the required sum or part of the required sum from its own savings. However, being a student if I want to form a company in the tourism sector it is not possible for opting the option like self finance.
- Loan from Bank: If an appropriate project report is prepared and approach to the Bank for granting loan, the bank can provide loan. However, repayment of Loan amount principal plus interest amount which is higher comparing to the other available resources like Angels and business incubators. Moreover, except money no other resources are available from bank. Therefore, this source is not feasible for starting a new business relating to walking tours at Greenwich. (Qualman, 2011)
- Private investors: There are so many investors are available at London and nearby places of Greenwich. But they charge excessive interest which is not acceptable at the present moment. Therefore, I have rejected to opt for this source.
- Venture capital: The function of Venture capitalist is to take the opportunity by taking a considerable possession of a new business where high risk is involved. It prepares the initial infrastructure of the business. Since I am a new entrepreneur and I am having insufficient savings which does not pursuit the minimum requirement of the terms of venture capitalist therefore, they are not interested about my business. Moreover, I am not so interested about their terms to control, entirely, my business initially without considering any of my opinion to run the business.
- Angels: They are regarded as affluent investors who make a direct investment to the same nature of new business where they belong. I cannot accept their proposal as I require other sources like skilled labor, and office room nearby Greenwich which remains lacking from their part. Moreover, the repayment amount is pretty high that I am unable to afford.
- Business incubators: This kind of investors invests their resources in different stages of the operations. They not only provide adequate money as a capital for commencing a business but also provide other relevant resources from time to time. I am likely to adopt this source of finance as one of the incubators based on nearby place of Greenwich agrees to meet all my requirements like financing and other relevant resources. Since I desperately need an office place and skilled as well as experienced guide initially they agree to provide me this kind of assistance. Moreover, they will also support me in the matter of developing my business and provide me consultancy for having customers. They also give me the facility of credit which can be extended for another one month according the situation of the business for which they will charge any extra amount. Moreover, their terms and conditions as well as repayment amount is not so high according to the facilities they commit to provide me. Therefore, I have decided to avail their service and start my business of walking tours in Greenwich. (Acdeniz, 2013)
3.b Develop and justify the potential for success of your new walking tour company
Name of the company: Progressive walking tour
It is said that the Greenwich is said as a magnet for the travelers especially for the school children. Various travelers come here to visit different places like Greenwich foot tunnel, Cutty sark, Greenwich park etc. Therefore, walking tour business is considered as a viable project which has a large scope for a new entrepreneur who has a clear vision about the future of his project. (Kreitner & Cassidi, 2009). As I have already said that for source capital i want to collect money from incubators. Other resources are also available from them which are very effective for running the business. Moreover, I will get their advice for obtaining customers. They are a well experienced player in this business line. Their expertise definitely is helpful for the foundation of the business.
I need to be well aware about the needs of the customers. Not only that I need to understand what type of customer generally come in this place. My analysis can be based on demographic wise or it can be based on financial potentiality of the visitors. Demographically I will emphasize to tap the young generation specially the school children who often visit this place either by school tour or with their parents. To make the place accessible to all types of tourist I need to develop a cost effective package for all which will become the USP of my business as many customers are unable to visit this frequently considering the costs of visiting this place. My intention is to create such a walking tour package which is able to fulfill the needs of types of customers within an affordable budget. (Brown, 2013)
I am sure that there will be a significant growth happening in due course of time as the demand to visit this place is moving up day after day which causes to heighten my business. Moreover, since I shall provide a cost effective walking tour package to the visitors, I will see the growth of my business. Since I will provide employment to the job seekers therefore, I can employ skilled workers into my business which is also considered as a potential reason for the growth of my business. Not only that, the scope of employment is definitely brings an ethical advantage in my business.
Since I want to introduce democratic leadership strategy in my business therefore, the future employees will be encouraged to maintain integrity among the business which will help my business to gather more market value in the industry. Considering the above factors I think that the mane of my company speaks itself the prosperous side of the business and I am sure in coming days I am able to fulfill my vision.
3.c Financial Persuasive Start- Up Plan
It is a prime objective of my business to render unparallel service to my customers and they will get a first class experience against their expenses. But to fulfill the objective it is required to prepare a suitable plan which should be compatible with my business. Unless and until a business plan is prepared financing will be of no use. Therefore, business plan is considered as a road map of the business. In order to set a plan it is required to perceive what my needs from doing such business are and that needs should not be irrational. Information which is relevant is useful for the business and these should be the part of the business plan. (Kelly, 2012)
When a business plan is established it is then ready to produce on the table of the financer. After checking the business plan when the financer think that the plan is set out in a suitable manner and there is an effective scope of growth he becomes interested in financing the project.
Following things are essential to follow in order to build up an effective plan
- Executive summary: It consists of two things. These are mission statement and objectives. Mission refers to tell the essence of my business
- Company analysis: Here my USP need to be described
- Industry analysis : It is about to make a discussion about the current trend of the traveling industry
- Customer analysis: Analyze the customers demographically, geographically, economically and determine the target customers.
- Competitive analysis: Analyze competitors applying SWOT analysis for this purpose.
- Strategic plan: What will be the strategy for marketing, distribution and revenue earning that is required to analyze and put up suitable strategies in this aspect.
- Operation plan: How to run the operation of the business comes under the purview of operation planning which is required to set.
- Management team: It is required to assess the unique quality to run the management of the walking tour business successfully.
- Financial Plan: It is required to assess the capital investment costs and working capital costs for running the business (Taylor, 2011)
- Other operations which include: location selection, license, staffing and training etc.
I think if my business follows the above factors it will definitely be a profit making project at the same time it will start to increase the market value in the near future which is more important than profit making.
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The process entrepreneurship had involved continuously looking for change that responded to it and exploited it in the form of an opportunity. This point helps in stating that these types of campaigns contributed in making unique and different proposition to the customers in order to convince them for switching brands. As in the case of Hexagon Travel, the activities of globalization can contribute in creating a homogenous nature in the activities of the business as well as the environment of the business.
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