How To Start Your Own Hotel Business in Nigeria: —- Over the past decade, the hospitality industry in Nigeria has grown significantly, with millions of people in Lagos alone traveling to other cities and states within the country to take advantage of the hotels and hospitality businesses that have opened up in recent years.
With this increase in demand, business owners will often look for new opportunities to expand their current businesses or start something entirely new within the hospitality industry, like opening their own hotel business in Nigeria. However, it can be difficult to know where to begin when you are looking to start your own hotel business in Nigeria, whether it’s your first time starting a hotel or your tenth time!. his guide will walk you through everything you need to know about how to start your own hotel business in Nigeria from scratch.
Step 1: Choosing your Hotel Business Niche
There are many factors to consider when choosing a hotel business niche, so make sure you are truly passionate about what you want to do and always keep your financial goals in mind. The first step is determining what type of ownership interest you are looking for.
Do you want to be an owner/operator?
Each has its own set of advantages and disadvantages, which vary greatly depending on personal circumstances and goals.
Step 2: Setting up for Success in Hotel Business
In order to succeed, you will need to set up a hotel business in Nigeria correctly from day one. Below are a few tips that will help you get started on your path to success as a hotel entrepreneur.
1) Know your market and have a target audience for your hotel. The most important part of starting any business is knowing who your customers are and how much they are willing to pay for your products or services. For example, if you are opening a resort, then your customers might be families looking for a relaxing vacation spot; if you are opening a boutique hotel in Lagos or Abuja, then your customers might be business travelers who are looking for upscale accommodations at an affordable price. If you don’t know exactly who you want to serve with your new hotel venture (and how much they can afford), then it could be difficult to find success with your new hotel business.
2) Find a great location for your hotel. Once you know who you want to serve and how much they are willing to spend, it’s time to start thinking about where you should locate your hotel business. Ideally, you should pick a location that has high foot and vehicular traffic so that people will see your signage when they walk by but also pick a location where rents are low enough so that there won’t be too big of an impact on profits if things don’t go well initially.
Step 3 : Finding a Location for your Hotel Business.
You might think your best bet is to buy a stand or build a hotel from scratch, but here’s some advice for how to start your own hotel business in Nigeria, build it yourself. Scouring over lists of available hotels can be as frustrating as looking at pictures of happily married couples who met through online dating sites. Don’t spend an unnecessary amount of time trying to find a location that meets all your needs when you could just do it yourself. If you have enough capital and are willing to invest, building a hotel from scratch can be one of your best options. But if you don’t have enough money for construction and need to get things going quickly, look into buying an existing a hotel structure and renovating it instead.
Step 4 : Cost of Starting Hotel Business in Nigeria
Before starting a hotel business in Nigeria, you will need to come up with an investment plan. In Nigeria, you can start a hotel business in Nigeria about N20 million and above depending on the number of rooms and amenities you want your hotel to have; however, that money should be used as seed capital only and you shouldn’t begin making any big purchases until your hotel is making revenue. You can then use those revenue numbers to determine how much more money you will need and get a clearer idea of what your annual budget will look like going forward.
Below are some other questions you might want to consider when determining your initial budget:
How much does it cost to run a typical hotel?
What about overhead costs? How much do employees make per month?
How much rent or mortgage payment will I have to pay each month?
How much money will I need for marketing my hotel?
How much profit margin should I aim for?
Do I have enough cash on hand to cover these expenses while still keeping my business afloat during its first few months of operation?
How long can I last without generating income from my new business before running out of funds completely?
The answers to these questions and many others will help you determine how large your initial investment needs to be.
Step 5 : Carry out Market Research for your Hotel Business in Nigeria
The first and most important thing you need to do when starting your hotel business in Nigeria is conduct thorough market research.
In your hotel market research learn everything you can about what people want, how they act and what they expect from a hotel?
Is there a shortage of hotels in any particular area?
What kind of amenities are most popular with customers?
Is there anything that could set your hotel apart from competition?
From an operations standpoint, how will you handle a high volume of guests during peak season?
Are potential employees hard to find for certain positions?
How much will it cost to build out a property?
Where should it be located?
How many rooms should it have?
Should it be built from scratch or purchased as an existing building?
How much does construction cost per square foot or per room, and how much profit margin does each type of room generate (if you’re planning on buying an existing building)?
How long will it take to break even on your investment (and how much money do you have available)?
How much debt can you realistically afford to incur?
How long until you start making a profit?
How much money do you need upfront to get started?
These are just some of the questions you will need answers to before beginning construction or purchasing an existing building. Don’t rush into anything; spend time learning as much as possible so that when it comes time to make decisions, your decision making process is informed by data rather than emotion.
Step 6 : Creating a Hotel Business Plan
Without a hotel business plan, you are likely to make a series of mistakes that will cost you time and money and may even tank your business before it gets off the ground. Creating a hotel business plan forces you to think through all aspects of your idea and, most importantly, allows you to go back and change things as needed. (A great deal of new businesses fail because they don’t have enough capital.) If you want to start a hotel business in Nigeria, below are some steps you can take:
The first step is to create a financial forecast for your new hotel business. This will help you determine how much money you will need to start up and run your operation, as well as how much revenue you can expect. It also helps you decide whether or not it’s worth it to pursue your idea. If you don’t have enough capital to get started, it might be better to look into other options. If you do have enough capital but don’t see a high enough return on investment (ROI), perhaps there are ways to tweak your plan so that it makes more sense financially.
In addition to creating a financial forecast, you should also put together an operations plan that includes information about where your hotel will be located and how many rooms it will have.
You will want to figure out how much each room will cost on average, as well as how much revenue you can expect from other sources (like food and beverage).
You will also need to think through what types of services or amenities your hotel will offer and how much they will cost.
And finally, you will need to decide how you’re going to market your new business.
The more targeted your marketing efforts are, the better off you will be. For example, if most of your guests are likely to come from one particular area or demographic group, focus all of your marketing efforts there.
Step 7 : Types of Investors to Approach for your Hotel Business.
Before you pitch your hotel business to investors, it’s important to learn about their background and what they may want to see from a potential investment. Belo are some examples of common investor types, from which you can build on and craft a pitch that aligns with their interests. It’s also important to keep in mind that not all investors will fall into one category; an angel investor, for example, could be either a retail or accredited investor depending on how much money he has made over his lifetime. Regardless of how many types of investors there are out there, it is crucial for entrepreneurs to know exactly who they are pitching before approaching them. If you don’t have time to do your own research, consider hiring a hotel consulting firm that specializes in helping startups find funding.
Step 8 : When to Incorporate for your Hotel Business.
It’s never too early to start thinking about your company as a business, and you might find that incorporating at an early stage provides some benefits. For example, if your business is a sole proprietorship (or LLC), you are personally liable for all of its debts and actions; if someone slips and falls at your office party or someone sues you because your products caused an injury, they can sue both you and your personal bank account. By contrast, if you incorporate your business for example, by forming a corporation you limit your liability by keeping most of your assets separate from those of your business. This means that creditors and plaintiffs would have to go after only what you own personally instead of what’s held by the corporation.
Therefore is a need to register your hotel in Nigeria either as an enterprise or a limited liability company with the Corporate Affairs Commission of Nigeria (CAC). To register your hotel business with the CAC is not a difficult thing. But if you need assistance with the registration, simply send me a direct mail to email@example.com and I will have it done for you in 2 weeks.
Step 9 : Managing your Hotel Business Staff Efficiently
When you are starting your own hotel business in Nigeria, it’s important to know how to manage your staff efficiently. Staff management is essential for a successful and profitable hotel business. At any given time you could have over 50 people working under you such as
So it’s important that you learn how to hire and fire effectively and communicate with employees as needed.
Step 10 : Insurance and Permits for your Hotel Business.
Running a hotel business requires a lot of time and money, so make sure you protect your investment with liability insurance. This coverage helps reimburse losses from accidents that are not caused by your negligence. For example, if someone slips and falls on broken tiles in your hotel, you would be liable for their medical bills but liability insurance would help cover these costs and more. The cost of insurance varies depending on factors like how much coverage you want and what type of business you’re running (hotel versus bed & breakfast). Make sure to research local laws regarding permits; in some areas, hotels must obtain special licenses or permits before they can operate. If you do need a permit, don’t let it deter you most cities have websites where you can learn about requirements and submit applications online. It might also be helpful to find an attorney who specializes in real estate law, as he or she will likely know all about regulations surrounding commercial property and may even be able to refer customers looking for a new business opportunity.