1.0 A business plan for Increasing Business Revenue
1.1 Executive Summary
Profitability is one of the primary objectives of establishing a business venture. The success of a business in the realization of its objectives does not come from the investor alone. Other key players such as stakeholders have significant contributions to the success of the business. Thus, companies are expected to maintain a healthy relationship with their stakeholders since good cooperation promotes business success (Rust, Moorman, & Dickson, 2002). Different companies offer various services and products depending on the business opportunities identified by the entrepreneurs. Yo: HA is a company that has been offering accommodation services for foreigners since most universities do not have enough accommodation facilities for all students. The company wishes to expand its revenue generation from the current level. This would be realized by increasing the number of students by creating a high demand for our services or by lowering the operation costs of the company. Due to high competition from our rivals, quality improvement would also be another strategy for achieving the high revenue. The current financial capacity of the company tends to limit its ability to generate more revenue. Consideration of more sources of financial support would also help in supporting business expansion. The current position of the business suggests that Yo: HA has great potential to expand if various actions are taken towards the realization of its main objectives. Various developments have been realized by the company for the last few years. However, continuous improvements are essential to keep pace with our competitors in terms of quality improvements and the market for the accommodation services. The company projects more revenue in future, a goal that will be realized if some of the business challenges it faces will be addressed. This paper will present some of the things that can be done to improve the revenue for the company.
2.0 Creating high demand for accommodation by subsidizing the prices of some services
Competition exists nearly in every market. As such, various strategies must be used to induce demand for products or services of a particular company. Competition is essential for improving the quality of services offered by the companies. On the other hand, it can lead to business failure if the company does not implement effective mechanisms to withstand it. The demand for goods or services is proportional to the total revenue (Rust, Moorman, & Dickson, 2002). If demand increases, the total revenue tends to increase since the demand entails the willingness as well as the ability to purchase something. Provision of services at subsidized prices helps to increase the demand. If the company reduces the prices of some services like catering, more students will attracted to the company and demand will increase. High demand will result in increased revenue. Therefore Yo: HA should contemplate subsidizing some of its services since this will not only improve the revenue but will also enhance its competitiveness.
3.0 Reducing the total expenditure by outsourcing some services
The management of costs in a company is instrumental in enhancing the profitability. Business organizations adopt different mechanisms to reduce operation cost to the lowest possible level. Some of the strategies used by companies include outsourcing of labor for services that do not require full-time employees. Hiring of transport services only when goods or services need to be transported also help organizations to lower their expenses. Some of the services in the company contribute significantly to the total cost, yet the company does not require them on full time basis. For example, the cleaning of hostels constitutes a significant cost element that can be reduced by outsourcing. The company can make arrangements with companies that offer cleaning services to other business organization to provide cleaning services on part-time basis. This is an important improvement that will help to reduce labor cost and increase the total revenue. Transport services contribute significantly to the total expenditures of the company. However, the company does not transport services regularly. If the company considers outsourcing some transport services, the total expenditure will reduce and revenue increases. Most importantly, the budget allocation for outsourced services can be put to the expansion and improvement of services like renovation of hostels and construction of more rooms.
4.0 Facilitating the development of infrastructure
The security in any business organization is of paramount value. Insecurity does not only scare away entrepreneurs but also increase the risk to the business. Companies with poor security tend to have limited customers and consequently low profitability. Notably, security is a sensitive issue to companies that provide accommodation services (Barron, Buultjens, Cairncross, & Davidson, 2009). Thus, it contributes significantly to the profitability of an enterprise. However, the cost of hiring security is high and this force many companies to rely only on the government security which is not always reliable. International students may have turned to different universities due to insecurity in their countries. As such, security becomes a consideration when they are making decisions regarding the place of residence during their studies. The cost of security reduces the company’s revenue significantly. Infrastructural development is an essential add-on that will improve the revenue of the company drastically. Thus, the management should consider expanding the current infrastructure.
5.0 Improving the quality standards of the hostels
The quality of both goods and services is one of the attractive features that customers consider when making buying decisions. They must establish that the goods and services offered by a company meet and surpass what is offered by competitors. The demand for the services increases proportionally with the quality. Improving the quality tends to attract cost to most companies, making service delivery relatively expensive. As such, most companies associate quality improvements with increased cost. High costs tend to reduce the demand since prices will increase. Compromising the quality of the services due to high costs of operations will not make the company better off (Wu, Garza, & Guzman, 2015). A compromise needs to be sought between high quality and cost that will make the accommodation services more attractive. One way in which quality can be improved is by improving the standards of the hostels. Students living in high-quality rooms tend to feel comfortable and would advise their colleagues to come for services in Yo: HA. The increase in the number of students will result in high revenue for the company. Provision free internet services and a computer lab could be another way to improve the standards of the hostels. Internet constitutes a valuable learning resource for the students. Therefore, the provision a construction of a computer lab and provision of free internet will make the hostels more attractive thereby increasing the revenue for the company.
6.0 Seeking managerial advice
The marketing problem is a big challenge facing companies that deal with hospitality services. Revenue generated by a company depends on its customer base. Companies with small markets tend to have limited capacity to increase their revenue (Liabotis, & Bio, 2015). Therefore, marketing is an essential function in a business organization that should not be overlooked. Adoption of poor marketing strategies results in significant loss to the business due to costs involved. Also, the failure to implement effective marketing exposes the business to high marketing and financial risks. Therefore, the management of companies should adopt strategic marketing approaches to improve the revenue as well as reducing costs. Yo: HA can enhance its revenue generation if it can be supported in marketing activities. Creation of a communication platform between the company and the students would help the company to reach many customers. Also, such a platform will facilitate the marketing activities of the company to the students because it will be able to communicate to the students about the available services. Therefore, the company should consider creating a platform that allows the company to market its services to the students as this will significantly promote the total revenue of the company.
7.0 Conclusion
Effective business management is crucial for the success of a company in competitive markets. The establishment of a strong relationship with stakeholders has significant contributions to the capacity of the business to thrive in competitive business environments. Companies dealing with hospitality services must implement effective strategies to attract customers. Partnering with institutions that make up the major source of the market helps to support the marketing capacity of companies. The identification of the business problems and strategic approaches to seeking managerial advice is instrumental in promoting the power of a company to generate revenue. The provision of critical infrastructure and security in companies that host international students should be prioritized since students must consider the availability of basic infrastructure when making decisions concerning the best place of residence. Therefore, companies like Yo: HA should develop strong relationships with the universities to improve their revenue generation.
References
Al Hrou, S. A., & Mohamed, B. (2014). Human Resource Management Practice Tourism and Hotel Industry. In SHS Web of Conferences (Vol. 12, p. 01076). EDP Sciences.
Barron, P., Buultjens, J., Cairncross, G., & Davidson, M. (2009). Training needs for the hospitality industry. CRC for Sustainable Tourism.
Duangpracha, K. (2012). The accommodation challenges of international students (Doctoral dissertation, RMIT University).
.Liabotis, B., & Bio, V. (2015). Three strategies for achieving and sustaining growth. . Retrieved from http://iveybusinessjournal.com/publication/three-strategies-for-achieving-and-sustaining-growth/
Nasirudeen, A. M. A., Josephine, K. W. N., Adeline, L. L. C., Seng, L. L., & Ling, H. A. (2014). Acculturative stress among Asian international students in Singapore. Journal of International Students, 4(4), 363-373.
Rust, R. T., Moorman, C., & Dickson, P. R. (2002). Getting return on quality: revenue expansion, cost reduction, or both?. Journal of marketing, 66(4), 7-24.
Steele, K. D. (2008). Perceptions of Chinese international students in Singapore: Adjustment issues and support (Doctoral dissertation, University of Toronto).
Wu, H. P., Garza, E., & Guzman, N. (2015). International Student’s Challenge and Adjustment to College. Education Research International.
