Shared power bank. Individual Business Model and Plan

Individual Business Model and Plan
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Executive Summary
The report has presented a business model and detailed planning policies and procedures for a service-based business venture known as AAB (Australia Advance Booking) company located at Melbourne, Australia. AAB will provide online marketplace for introducing booking options related to lodging in different cities of Australia. Individuals and hotels registered on platform for providing accommodations are hosts and tourists booking the accommodations for rental purposes are guests. In order to generate revenues, hosts will be charged 2% of total payments and guests are charged 1% of total payments. Potential of rental market can be judged from the fact that holidays rental market has generated revenues of more than $3 billion in 2018. Important competitors like Airbnb and HomeAway have majority market share. In order to achieve a competitive advantage, AAB is going to utilize the in-house developed algorithms for conducting real-time data analytics. Customers purchasing trends can be identified through data analytics and these trends are essential for developing more effective policies for offering discounts to guests on online platform. AAB company will introduce different projects for fulfilling the corporate social responsibility and it is going to increase the goodwill in upcoming years. Customer information is protected by following the guidelines mentioned in privacy act developed by the government. Owner owns 100% equity and company structure is sole proprietorship. Employees are encouraged to present ideas that can be used for developing future policies and procedures, and this approach is essential for motivating the employees. The projected performance shows that company is going to generate positive cash flows in next three years. Company operations are financed by investing owner’s personal savings and debt financing option can be used in upcoming years for expansion purposes.
Table of Content
1. Introduction. 4
2. Business Model Canvas. 4
2.1. Key Partners. 4
2.2. Key Activities. 4
2.3. Value Proposition. 5
2.4. Customer Relationships. 5
2.5. Customer Segments. 5
2.6. Key Resources. 5
2.7. Channels. 5
2.8. Cost Structure. 5
2.9. Revenue Streams. 6
2.10 Summary of Business Model Canvas. 6
3. Market 7
3.1. Market size. 7
3.2. Market Growth Rate. 7
3.3. Data Analytics Trend Creating a Positive Impact on Hospitality Industry. 8
3.4. Market Segmentation. 8
3.5. Targeted Customers. 10
3.6. Major Competitors. 10
3.7. Current Location of AAB company and Forecasted Number of Customers. 11
4. Operations and Technology. 11
4.1. Online platform and Mobile Application Development 12
4.2. Emerging Technological Changes Impact on Company. 12
4.3. Options for Developing Service. 12
4.4. Options for Sales and Distribution. 12
4.5. Resources Required for Development 13
4.6. Important Regulation Related to Business. 13
4.7. Ethical or Moral Issue. 13
5. Human Resources (HR) Management 13
5.1. Technical and Management Experience. 13
5.2. Owner and Other Executives Roles and Responsibility. 13
5.3. Ownership Structure. 14
5.4. Human Resource Requirements. 14
5.5. AAB Company Growth Strategy. 15
6. Finance. 15
6.1. Project Revenues. 15
6.2. Start-up Costs and Capital Costs. 15
6.3. Projected Profit and Loss Statement for Next 3 Years. 15
6.4. Source of Financing. 15
References. 16
Appendixes. 20
Appendix 1: Start-up Costs. 20
Appendix 2: Equipment/ Capital Costs. 20
Appendix 3: Profit and Loss Statements for Next Three Years. 21
Individual Business Model and Plan
1. Introduction
Business ventures require innovative ideas and effective strategies for achieving competitive advantage and high profitability on a continuous basis. A service-based business venture is developed for competing in the hospitality industry of Australia. The business venture is known as Australia Advance Booking (AAB) company and its objective is to provide an online marketplace for presenting booking options related to lodging in different cities of Australia. AAB is going to provide a high-quality tourism experience to individuals willing to visit different unique tourist destinations in Australia. Individuals and hotels registered on AAB platform will provide temporary accommodation options to tourists during their visit to different locations. Individuals and companies providing the accommodations are hosts and tourists booking these accommodations are considered as guests by AAB company. Location of company office in Melbourne, Australia and both type of customers, hosts and guests can excess the website (online platform) from anywhere around the globe. In the initial phase, AAB operational activities are going to be limited to Australia and, hosts have the option of registering the accommodations within the country and guests from all over the globe can use the platform for reservations. The report has presented a business model and highlighted planning phase for AAB company. 
2. Business Model Canvas
Business model canvas for AAB company is discussed in this section.
2.1. Key Partners 
Most important partners are the hosts providing accommodations for rental purposes. Other partners include the travel companies, maps providing companies, payment platforms, investors and venture capitalist firms.
2.2. Key Activities 
Providing an online platform for connecting the hosts and guests for lodging purposes. Developing strategies for improving the engagement of key partners. Gathering and analyzing the data collected through the platform for identifying the significant insights that can be used for providing more suitable options to tourists visiting different destinations in Australia. AAB company is going to implement an in-house developed algorithm for providing a comparative analysis to customers about different accommodation options with suitable prices. 
2.3. Value Proposition
The hosts are going to get profit generated opportunities by renting out the accommodations. Transactions made through a third-party payment method are secure for hosts and guests. The platform will provide opportunities to tourists for identifying the most suitable options according to requirements, location and price preferences.
2.4. Customer Relationships
Management is going to continuously communicate with hosts and guests through website and company mobile application. Communication plays a vital role in addressing the issues related to bookings or payments. The feedback collection policy is going to help in understanding the customers’ satisfaction levels and also going to contribute towards developing marketing policies that are necessary for improving the profitability and goodwill.
2.5. Customer Segments
Hosts providing the accommodations are going to be segmented on basis of location, type of property and prices. Segmentation for guests will be based on demographics, time period of stay and income levels.
2.6. Key Resources
The online platform and mobile application are the main assets of the AAB company. Collected data related to hosts and guests are analyzed by using in-house developed algorithms. Data analytics capabilities of management help in achieving competitive advantage. The user listings developed through online platform are vital resources for developing policies and offering discounts. The third-party payment system will be integrated into online platform and mobile application. 
2.7. Channels
Services of AAB company are provided through web and mobile applications. Payments are also processed through a third party payment system integrated into the online platform.
2.8. Cost Structure
Important costs are related to cost of debt, expansion, legal, infrastructure, third party payment system fees, salaries and wages, employees training, marketing and customer services.
2.9. Revenue Streams
Individual and hotels (hosts) providing the accommodations will be charged 2% of total payments and tourists (guests) booking the accommodations are going to be charged 1% of total payments.
3. Market
Industry market analysis is discussed in this section.
3.1. Market size
Revenue generated by hotels and resorts were $7.9 billion and restaurant industry generated a revenue of $20.2 billion (Hughes, 2017). The number of tourists in Australia increased to 9 million, international arrivals growth was 4.9% in 2018 and it is expected to grow by 6.2% (Deloitte Australia, 2019). Trips by Australians within the country are expected to grow by 4.2%, more than 7100 hotel rooms increased in 2018 and occupancy rate for hotels in Australia was 76% and averaged daily room booking increased to 1.8% (Deloitte Australia, 2019). The hospitality industry is experiencing the fastest growth since the Sydney Olympics and more than 270 hotels are to be completed by 2025 (Quaintance, 2019).
3.2. Market Growth Rate
Hotel and resorts industry grew by 3.4% in the last five years (Ibisworld, 2019). According to an estimate, more than 230 hotel projects are going to develop 43,730 hotel rooms until 2024 (Grace, 2018). It will contribute towards improving the hotel industry revenues. Revenue per room is going to rise by 2.5% in next three years (Deloitte Australia, 2019). Revenue per room decreased in 2019 as compared to 2018, and it can be observed from Australian hotels cities data mentioned in figure and it also indicates that Sydney city is top performer.
Figure 1: Revenue Per Room (Cities Data)
Source: (Australian Government, 2019)
3.3. Data Analytics Trend Creating a Positive Impact on the Hospitality Industry
Data analytics is creating a positive impact on the hospitality industry by improving the cost management process and it is an important benefit because hotels have to continuously incur a cost for improving facilities (McKinsey, 2019). Analytics can be used by AAB company for predicting the future consumers purchasing trends that can be used for presenting offers and discounts for attracting more customers on online platform. 
3.4. Market Segmentation
Hotels and individuals willing to rent out the personal property are segmented as hosts and tourists willing to rent out the accommodation are considered as guests. Potential of hosts market is very high, such as; there are total of 249 thousand hotel rooms in Australia in 2016 (Hughes, 2019). The total number of rooms in Australia has increased with a small percentage from 2007 to 2016, as reflected in figure mentioned below (Hughes, 2019).
Figure 2: Number of Hotel Rooms 
Source: (Hughes, 2019)
Potential of guests segmented market is also high. In the years 2018, there are more than 8.5 million visitors in Australia, $43.9 billion were spent and most importantly, 970 people arrived in every hour (Budget Direct, 2019). Most arrivals were from China with 143 million followed by 138 million visitors from New Zealand and it can be observed from figure mentioned below (Budget Direct, 2019).
Figure 3: Visitors Arrivals by Country in 2018
Source: (Budget Direct, 2019) 
3.5. Targeted Customers
AAB company has two different kinds of customers, guests and hosts. The guests are the tourists willing to visit different locations and hosts are the individuals and hotels providing the accommodations. Company has diversified customers and it is expected that diversifying the customers base is going to increase the revenues and growth (Davis, 2017).
3.6. Major Competitors
There are many companies operating in the Australian accommodation rental market. One of the most important competitors is Airbnb company. In year 2018, Airbnb has generated more than $1 billion from Australia (Tabakoff, 2018). Holiday rental supply increased to an additional 30,000 home rentals in February 2019, generating revenues of more than $3 billion and more than 83% of rental homes are registered on ...