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Sephats Tours

Executive Summary

Opportunity

Problem

The tourism industry has undergone rapid growth of unsurpassed nature over the last several decades. This has mainly been due to the advent of a ‘borderless’ world and increased information dissemination about the majestic sceneries throughout the world, with the southern African region being no exception.

Solution

Sephats Tours intends to provide individual and group travel to leisure clients. Services and products provided by Sephats will initially include pre-arranged tours, custom packages according to clients specifications, travel consultation, and as time progresses making reservations for lodging amongst other related services. Sephats Tours seeks to differentiate itself as the premier adventure travel company in the greater Gaborone (Botswana) area.

Market

We will be focusing on those foreign tourists seeking leisure travel and excursions whilst on vacation in Botswana, with the intention of letting them see and appreciate the numerous attractions in our country. Though we realize that the majority of our tourists come from South Africa we shall be mainly targeting those from Europe and the Americas who often do not have transport or adequate knowledge about the country, unlike their South African counterparts who often do. Hence we shall be mainly targeting those who are not that mobile but wanting to see as many sites as possible. These people often do not want to waste their money on hiring vehicles to move about by themselves, but instead want to be escorted around places of interest by a reliable source. Hence the need to professionally market ourselves and the services we provide, offering a service of uncompromised nature.

Competition

We have identified competing companies, some firmly established, that fill the same needs as Sephats Tours. We intend to market ourselves in such a way that with time competitor customers will choose our service over competitors’ on the basis of our higher quality and informative excursions. 

Why Us?

Sephats Tours is poised to take advantage of this growth and moderate competition in the city travel portion of the industry, with a dedicated and experienced staff, excellent networking, and effective management and marketing. Sephats Tours intends to provide travel and adventure packages to tourists primarily in the Southern region, but also the whole of Botswana. Services and products provided by Sephats will initially include pre-arranged tours, custom packages according to clients specifications, travel consultation, and as time progresses making reservations for lodging amongst other related services. Sephats Tours seeks to differentiate itself as the premier adventure mobile operator in the greater Gaborone area.

Expectations

Forecast

We foresee a slow initial growth in sales, as we strive to ensure we are known on the market, though operating expenses will be relatively high, and a bump in our sales and revenue generation as we spread our services during expansion.

Collection days are very important. We do not want to let our average collection days get above the client’s actual subscription period under any circumstances. This could cause a serious problem with cash flow, because our working capital situation is chronically tight. However, we recognize that we cannot control this factor easily, because of the relationship we wish to create with our clients.

Financial Highlights by Year

Chart visualizing the data for Financial Highlights by Year

Financing Needed

We wil have 2 investors that will contribute: 

investor 1 – P100,000

investor 2 – P102.000

This will cover all our necessary expenses until we are able to start making a net profit 

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Opportunity

Problem & Solution

Problem Worth Solving

The tourism industry has undergone rapid growth of unsurpassed nature over the last several decades. This has mainly been due to the advent of a ‘borderless’ world and increased information dissemination about the majestic sceneries throughout the world, with the southern African region being no exception. Customers want to travel, to see the world. They are in need of a company where they can enjoy the sites and the luxuries without having to pay a huge price. 

Our Solution

Sephats Tours intends to provide individual and group travel to leisure clients. Services and products provided by Sephats will initially include pre-arranged tours, custom packages according to clients specifications, travel consultation, and as time progresses making reservations for lodging amongst other related services. Sephats Tours seeks to differentiate itself as the premier adventure travel company in the greater Gaborone area. Customers will think we are well worth the expense 

As it grows it will take on people and expand into related markets and services. It will also look for additional leverage by establishing relationships and representations with appropriate strategic allies.

Target Market

Market Size & Segments

We will be focusing on those foreign tourists seeking leisure travel and excursions whilst on vacation in Botswana, with the intention of letting them see and appreciate the numerous attractions in our country. Though we realize that the majority of our tourists come from South Africa we shall be mainly targeting those from Europe and the Americas who often do not have transport or adequate knowledge about the country, unlike their South African counterparts who often do. Hence we shall be mainly targeting those who are not that mobile but wanting to see as many sites as possible. These people often do not want to waste their money on hiring vehicles to move about by themselves, but instead want to be escorted around places of interest by a reliable source. Hence the need to professionally market ourselves and the services we provide, offering a service of uncompromised nature. />Our marketing strategy will be based mainly on making the right service(s) available to the right target customer. We will ensure that our services’ prices take into consideration organizations’ and peoples’ budgets, and that these people know that we exist, appreciate the value of our services, and how to contact us. The marketing will convey the sense of quality in every picture, every promotion, and every publication. Our intension will be to target those individuals and groups looking for leisure activities and places to visit. We realize the need to focus our marketing message and our service offerings. We need to develop our message, communicate it, and make good on it. The decision to establish strategic alliances with several hotels, lodges and travel agencies is aimed at tapping our target market effectively and efficiently.

Competition

Current Alternatives

We have identified competing companies, some firmly established, that fill the same needs as Sephats Tours. We intend to market ourselves in such a way that with time competitor customers will choose our service over competitors’ on the basis of our higher quality and informative excursions. A more thorough outline of our main competitors including their strengths and weaknesses follows:

  1. XXX: Located on the first floor of the G Hotel, Gear Adventures specializes in tailor-made safaris throughout Botswana and her neighboring countries. Gear Adventures offers Mobile Wilderness Safaris, Weekend Adventures, One-day explorations and safari operators. Of particular concern to us are the day tours around Gaborone that it offers to G Hotel guests. Research indicated that Gear Adventures is the only operator that offers day trips in and around Gaborone. Several of its services include: [details omitted].
  2. YYY: Arguably one of the most reputable companies in our intended line of business. It has a fleet of nineteen buses comprising two semi-luxury B7 Volvo train-buses, six semi-luxury B7 Volvo, five M/Benz, four Nissan and two DAF buses. All the Volvo buses have radio facilities, and one of the train-buses has toilet facilities. With close to twenty years of experience Mr. K supported by his wife, Mrs. K, are achieving most of what they envisioned when they started their business-to provide a nation-wide road transport service renowned for its efficiency and reliability. The recent launch of a new imported South American double-decker luxury bus serves as testimony of their continued dedication towards providing a good service to their clients.
  3. ZZZ: Similar to YYY, Z is well respected in the market with a large fleet of buses. As well as providing daily transport to Selebi Phikwe and several towns it also provides local and international trips by hire. However they lack the marketing edge and foreign tourist focus we intend to have.

Upon closer analysis of the above competitors it may be observed that the majority of these are offering safari excursions, and this represents an opportunity to be realized by us. According to the Central Statistics Office there are approximately 81 travel agents, tour operators and safari operators in Botswana at present, the majority of which have a South African background either in directorship or actual origin.

Our Advantages

Our advantages are best described as our strengths: 

  • Diversified client base: This will reduce our dependency on one particular market.
  • Combination of skills in employees: The directors intend to engage well-qualified and experienced employees to jointly develop business strategy and long-term plans, so as to attain company objectives.
  • Extensive advertising and marketing: The company will undertake extensive advertising and marketing, promoting both its name as well as service/product awareness. Hence an aggressive and focused marketing campaign with clear goals and strategies shall be one of our mainstays.

Keys to Success

Keys to Success

The keys to Sephats Tours success will undoubtedly be effective market segmentation through identification of several niche markets and implementation strategies. Along these lines the company intends to implement advertising, personal selling and direct marketing strategies to the target markets. Our personal selling marketing strategies will rotate around keeping in touch with hotels and travel agencies for major customers, and advertising for more individual customers. Hence our key success factors will include the following:

  1. Excellence in fulfilling the promise: We intend to offer completely enjoyable, comfortable and informative travel excursions that will ensure that travelers are thoroughly satisfied and appreciative at the end of their trip.
  2. Timely response to customers’ requests: We cannot afford to delay our clients for whatever reason, as this will have a negative bearing on our image and reputation, including future business. Hence we need to be continually communicating with the client, including hotels and lodges so as to ensure that we are constantly available to the client meeting their expectations.
  3. Solid and fruitful strategic alliances: Considering the nature of our services and our relative infancy on the market, we realize the importance of establishing and maintaining fruitful strategic alliances with various stakeholders, including hotels, lodges, and travel agencies, amongst others, so as be assured of a constant flow of customers, fulfilling their needs at every opportunity.
  4. Marketing know-how: As a relatively new company on the market there will be a need to aggressively market our business and the services we provide so as to be continuously at the top of our prospective clients minds. This will also act as a temporary deterrent for companies contemplating entering our market. Advertising shall be undertaken on a regular basis.
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Execution

Marketing & Sales

Marketing Plan

One core element of our strategy will be that of differentiation from our competitors. In terms of marketing we intend to ensure that our name and services are marketed on an extensive basis so that customers are aware of our existence. We will have a Social Media Strategy. We will be in Twitter, on Facebook, and on LinkedIn. We will run promotions and sales and have our customers tell us their favorite vacations, and experiences and they will talk to each other. In price, we intend to offer reasonable and competitive prices in comparison to competition and we need to be able to sustain that. Our service marketing will strive to ensure that we establish long relationships with clients.

Sales Plan

For the short term at least, the selling process will depend on personal selling/networking and advertising to lure and inform potential customers about the services we offer and the benefits of utilizing our services. Our marketing does not intend to affect the perception of need as much as knowledge and awareness of the service category.

Operations

Locations & Facilities

At present the company offices are located at Plot Number 28338, Block 3, Belabela road opposite Gaborone Television Station, near Hill Crest Primary School. However, as time progresses the intention is to move into more accessible and attractive offices in a prime area. This regardless of the fact that our type of business is not too dependent on office location and size.

Technology

Sephats Tours will strive to ensure that it contains the latest, or extremely recent personal computer including relevant software so as to ensure that the company is continuously at the forefront in our market arena. The one certainty in our industry is that technology will continue to evolve and develop, changing what we market as well as how we market it. Our aim will be to be aware of the implications of this new technology and utilizing it in our existing framework where possible. However it should be noted that as we are new on the market it will take some time before we have in place our own website and other multimedia presentations. With time we also intend to have the latest and most efficient software in place to enable smooth operations.

Milestones & Metrics

Key Metrics

Our Key metrics are:

  • Tours sold (units, growth from month to month and year to year)
  • Tourists per tour (average, and changes over time)
  • Revenue per tour
  • Revenue per tourist
  • Total tourist prospects (estimates)
  • Inquiries
  • Facebook likes
  • Twitter follows
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Company

Overview

Ownership & Structure

Sephats Tours is a Private Limited company incorporated at the Registrar of Companies through the foresight and vision of Mr. X and Mrs. Y. It is a 100% wholly owned Botswana firm.

Team

Management Team

The founders of Sephats Tours are passionate about the activities it will promote and offer on the market. Management style will reflect the participation of the directors/shareholders. The company intends to respect its community and treat all employees well. We will develop and nurture the company as community. However we realize that we are not fully conversant in tourism and as such intend to engage experienced staff as well as undergo a training course from a reputable institution.

The Managing Director’s experience in public commercial transportation and government will assist in the establishment of good networks. He also has attended a course in Auto Mechanics at X Centre that will assist in servicing the vehicles. However acknowledging the importance of continuous training and improvement the Managing Director intends to undergo a course in Travel and Tourism so as to be fully conversant in the field, as well as obtain knowledge of the latest developments in the industry.

Personnel Table

2020 2021 2022
Accountant P30,000 P33,000 P36,300
Tourguide P24,000 P26,400 P29,040
Sales and Marketing P21,600 P23,760 P26,136
Driver P18,000 P18,900 P19,845
Personal Assistant P14,400 P15,840 P17,424
Cleaner (2) P14,400 P15,120 P15,876
Nightwatchman (2) P14,400 P15,120 P15,876
Mechanic (0.67) P15,000 P17,000
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Financial Plan

Forecast

Key Assumptions

The financial plan depends on important assumptions. From the beginning, we recognize that payment terms and hence collection days are critical, but not a factor we can influence easily. At least we are planning on the problem, and dealing with it. Interest rates, tax rates, and personnel burden are based on conservative assumptions.

Some of the more important underlying assumptions are:

  • We assume a strong economy, without major recession.
  • We assume, of course, that there are no unforeseen changes in economic policy to make our service immediately obsolete or unwanted.

Revenue by Month

Chart visualizing the data for Revenue by Month

Expenses by Month

Chart visualizing the data for Expenses by Month

Net Profit (or Loss) by Year

Chart visualizing the data for Net Profit (or Loss) by Year

Financing

Use of Funds

Thus far we have purchased a Mercedes Benz mini bus to run tours for our customers, for P167,00, which was purchased with P32,000 down and the rest on a 5-year 6% loan. Other start-up expenses covered include  legal costs, business plan compilation, license costs and related expenses. 

START-UP REQUIREMENTS

Start-up Expenses

  • Legal P1,000
  • Logo, branding. P500
  • Website, collaterals P700
  • Consultants P1,200
  • Insurance P800
  • Rent P500
  • Other P300

TOTAL START-UP EXPENSES P5,000

Sources of Funds

We have 2 investors, investor 1 is investing P100,000, investor 2 is investing 102,000. 

Statements

Projected Profit & Loss

2020 2021 2022
Gross Margin P352,560 P417,040 P476,320
Operating Expenses
Salaries & Wages P136,800 P163,140 P177,497
Employee Related Expenses P27,360 P32,628 P35,499
Rent P14,400 P14,400 P14,400
Sales and Marketing P101,700 P120,300 P137,400
Insurance P12,000 P12,000 P12,000
Travel P1,800 P1,800 P1,800
Miscellaneous P2,400 P2,400 P2,400
Maintenance P12,000 P12,000 P12,000
Startup Expenses P5,000
Interest Incurred P7,451 P5,978 P4,416
Depreciation and Amortization P16,700 P16,700 P16,700
Gain or Loss from Sale of Assets
Income Taxes P2,242 P5,354 P9,332
Total Expenses P665,293 P771,660 P863,124
Net Profit P12,707 P30,340 P52,876

Projected Balance Sheet

Starting Balances 2020 2021 2022
Cash P25,365 P46,323 P57,282
Accounts Receivable P43,500 P40,100 P45,800
Inventory
Other Current Assets
Total Current Assets P68,865 P86,423 P103,082
Long-Term Assets P167,000 P167,000 P167,000
Accumulated Depreciation (P16,700) (P33,400) (P50,100)
Total Long-Term Assets P150,300 P133,600 P116,900
Accounts Payable P26,085 P22,827 P25,820
Income Taxes Payable P2,242 P1,360 P2,355
Sales Taxes Payable P0 P0 P0
Short-Term Debt P23,869 P25,342 P26,905 P28,564
Prepaid Revenue
Total Current Liabilities P23,869 P53,669 P51,092 P56,739
Long-Term Debt P111,131 P85,789 P58,885 P30,321
Long-Term Liabilities P111,131 P85,789 P58,885 P30,321
Paid-In Capital P202,000 P202,000 P202,000
Retained Earnings (P135,000) (P135,000) (P122,293) (P121,953)
Earnings P12,707 P30,340 P52,876

Projected Cash Flow Statement

2020 2021 2022
Net Cash Flow from Operations
Net Profit P12,707 P30,340 P52,876
Depreciation & Amortization P16,700 P16,700 P16,700
Change in Accounts Receivable (P43,500) P3,400 (P5,700)
Change in Inventory
Change in Accounts Payable P26,085 (P3,258) P2,993
Change in Income Tax Payable P2,242 (P882) P995
Change in Sales Tax Payable P0 P0 P0
Change in Prepaid Revenue
Investing & Financing
Assets Purchased or Sold (P167,000)
Investments Received P202,000
Dividends & Distributions (P30,000)
Change in Short-Term Debt P1,472 P1,563 P1,659
Change in Long-Term Debt (P25,342) (P26,905) (P28,564)
Cash at Beginning of Period P0 P25,365 P46,323
Net Change in Cash P25,365 P20,958 P10,959
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