Dynamic Pricing in your B&B

Dynamic Pricing

….you may not know the term, but I bet you have been subject to it somewhere.

In it’s crudest form, it’s the massive price hike you see in holiday accommodation when the school holidays start.

In its’ more subtle form, you’ve probably seen it when trying to book flights…£50 on one day, £300 on another for the same flight..it’s all down to ‘Supply & Demand’ and historically in the accommodation industry your room rate would only alter from summer to winter, but these days it is becoming more and more the practice to review it more often.

There is software out there that will do this on a minute by minute basis, but before you think of taking on a new piece of kit, it’s always recommended to get a feel for it yourself by doing it yourself for a short while first.

You may find that you doing it works out fine for you, if you only have a few rooms, but it’s good to have a basis of knowledge before you start getting any automatic software involved.

Your Dynamic Pricing Strategy

So, here’s some steps to follow:

1.Determine the demand for room nights

The first step in implementing dynamic pricing is to understand the demand for room nights. You should look at your historical sales data from the past year to gain an understanding of the peak and off–peak periods. This will give you a better sense of when to apply the dynamic pricing model.

2. Research the Competition:

You should conduct research to understand the market rate for a room night in your area. This will be important to ensure that the dynamic pricing model will be competitive with other B&Bs in the area, but still maximize profits.

3. Set Up a Pricing Model:

Once you understand the demand pattern and the market rate for a room night, you can set up a pricing model. This will involve deciding how much of a discount or premium to charge depending on the time of year, the day of the week, the occupancy rate, etc. The pricing model should be flexible enough to allow you to adjust the prices as needed, and you should end up with the Minimum price you would be prepared to sell a room for and the Maximum that you would expect for that room.

4. Introduce the Dynamic Pricing Model:

Once the pricing model is set up, you should review your existing dates and identify any dates where demand is already high and apply the higher rate to those room nights. If demand is low, then apply the minimum price to generate sales(should you wish), the aim being, that you will sell some rooms, create a scarcity which will then allow you to charge the higher price on the remaining rooms.

5.Review your bookings

You’ll then review your bookings, I’d say minimum weekly, to highlight where changes may need to be made and then alter prices accordingly. As a new booking comes in, you can review the surrounding dates, to see if a price amendment needs to be made.

It can be as time consuming as you want it to be….I found once I had done it for a few weeks, I was able to review quickly as I knew my bookings so well(I had one b&b with 4 rooms and a 2 bed self catering to manage).

If you have a few properties, this will be more time consuming, but you could even do it just once per month.

It’s the same as anything, doing your socials as an example, the more effort you put in, the better results you will achieve.

The ultimate aim of the game is that you end up with a higher Revenue per available room(RevPar), over a time period, compared to if you had left room rates at a static.

If you need help with this just drop me a line- info@fieldslodge.co.uk

Here’s more business help

Thinking of starting a Small Business

Starting a small business

Introduction

If you’re thinking about starting a small business, you’ve probably already made the decision that it’s something that you want to do. But there are still many steps left before you open your doors for business. This article will outline some of the first steps in starting a small business and what to expect as you move forward with your new venture. The good news is, once you’ve past these first hurdles and get underway with your new startup, the rest becomes much easier!

Determine whether entrepreneurship is for you

Before you make any decisions, you should take some time to think about what exactly you’re getting yourself into.

What is your motivation for starting a business? Is it because you want more control over your life and career, or do you just want to run a business for the money? If it’s the latter, then maybe entrepreneurship is not for you. There are more lucrative ways of making money than starting your own company (like working as an employee).
Are your strengths aligned with those needed for entrepreneurship? For example: if someone has strengths in sales but lacks business acumen, then they might be better off finding employment rather than embarking on their own venture.
How much do other people depend on you financially? If there are many people relying on your income—such as children or elderly parents—then this could be an obstacle when considering entrepreneurship because of the risk involved when starting up a small business without any previous experience running one.

Know yourself.

Now that you’ve done your research and you’re ready to start a small business, it’s important to know yourself. Your strengths and weaknesses, what you’re good at and what you’re not so great at. What do you want to achieve? What do you want to avoid? How long do you want this business journey to last?

These are all questions that will help guide the way for your future success as an entrepreneur. If being an entrepreneur isn’t in your DNA but entrepreneurship is something that interests or fascinates you (like me), then there are other options such as working as an employee within another company or becoming a freelancer who takes on projects on behalf of others.

Conduct industry and market research.

What is market research?

Market research is the process of gathering information about your target audience and the industry in which you will be operating. It helps you make informed decisions that will help grow your business, both in the short-term and long-term. It can also help you make sure you’re meeting specific goals for your company by providing insights into how customers or clients might react to certain products or services. Market research allows you to understand what customers want from their products/services, how they use them, where they purchase or take advantage of these offerings, and how much money people are willing to spend on them. You can learn more about each type of market research below:

Why does it matter?

When starting a small business, one thing many entrepreneurs worry about is whether there will be enough demand for their product/service once they start selling it. Conducting market research will give you an idea if consumers find value in what your company offers before spending money marketing it—saving time and money along the way.

Write a business plan.

Once you have a business idea and start to develop it, it’s time to write a business plan. A good business plan will help you determine if the idea is feasible and how much money it will take to make it happen. It also allows you to figure out if the market has room for your product or service before spending time and money on developing it.

A well-written business plan should include:

An executive summary that describes the company’s mission statement, goals, strengths/weaknesses compared with competitors, target customer base/market segmentation (the different types of customers who would buy from your company), market analysis (how much demand there is for what you’re offering), competition analysis (who else offers similar products or services), financial projections (how much money will be needed for startup costs plus growth over a period of time), owner’s equity contributions or other funding sources.* A marketing section that describes how sales are going to be generated.* A financial section that explains how profits will be generated

Research your financing options.

Once you have your idea, it’s time to start researching your financing options. There are many resources available to help you get started. After all, it’s not just about making money; it’s also about making sure that the business is sustainable and will continue growing for years to come.

The first step in any business venture is creating a realistic budget that accounts for all expenses and revenue streams over a period of time. From there, you can figure out which sources are best suited for what needs at this stage in the company’s development:

Bank loans: A loan from a bank or financial institution may be an option if you’re looking for capital with very little risk involved on their part since they’ll own part or all of your company as collateral should anything go wrong during repayment (and things do go wrong). Banks usually charge higher interest rates than other lenders because they have more stringent requirements when evaluating applicants based on factors like credit score or debt-to-income ratio (how much income goes toward monthly bills). Angel investors: These individuals provide capital because they believe strongly in your vision but don’t want any kind of formal ownership stake (they might invest $50K-$500K into one business). They expect some return on investment within five years but do not require interest payments until after those five years have passed so long as they receive quarterly updates on progress made during those first five years until whatever milestones have been agreed upon among investor(s), founder(s), board members etcetera.”Venture capitalists” (VCs): these high net worth individuals typically look at big ideas from startups—new ventures that aren’t yet profitable but show promise through various metrics including market demand—and then decide whether investing money makes sense based on those metrics’ results plus other factors such as how much risk there would be associated with investing versus keeping cash in savings account.”Business credit cards”: If your startup has already been established with several employees working out of office space provided by another entity then chances

Choose a business structure.

Choose a business structure. There are many different types of business structures, including sole proprietorships, partnerships and corporations. Each has its own advantages and disadvantages. For example, sole proprietorships are easy to start but not as flexible as corporations because they’re taxed individually. Partnerships offer limited liability protection but can be difficult to manage if multiple parties are involved.
When choosing the right structure for your small business:
The most important thing is that you pick one that suits your individual situation best!
If you’re unsure which type of company is right for you or what steps need to be taken next, consult with an attorney who specializes in small businesses

Obtain licenses and permits.

Licenses and permits are required for many businesses and can be expensive and time-consuming to obtain. The process can be difficult if you don’t know the right people (or have the right paperwork).

If your business needs a license or permit, start by researching whether it is necessary at all. If so, figure out what type of license or permit will be best for you. A good place to start is an online search of state regulations with keywords like “business license” or “health inspection,” but there may also be additional requirements specific to your city or county as well.

Find the right people

Finding the right people to work with is one of the most important things you’ll do as an entrepreneur. It’s also one of the hardest. You have to find people who are good at what they do and work well together, but you also need them to be trustworthy and reliable, honest and hardworking, passionate about their job—and that’s not even getting into all of the different personalities and skills that go into making a successful team.

But don’t worry: This doesn’t mean finding a unicorn (I’ve never seen one). There are plenty of ways to find great employees if you know where to look!

Get an accountant and lawyer.

When you’re starting a small business, it’s important to get an accountant and lawyer on your team to help you file taxes and keep your business legal. An accountant can help you understand the financial implications of different decisions so that you know what it costs before making those decisions. A lawyer will protect your intellectual property and make sure that no one steals it or sues for patent infringement.

Both accountants and lawyers have their own specialties: accountants work with money, while lawyers work in contracts and agreements.

The best way to find an accountant is through referrals—ask people who’ve worked with them before if they could recommend someone good to hire! If they don’t know anyone personally who has used the services of an accountant before, then ask around until someone suggests someone else who might be able to help out too!

Secure financing.

You can get a business loan, line of credit and merchant account from your bank or other financial institution. If you need money for equipment, inventory or other needs, you’ll have to borrow it from somewhere else.

You may be able to apply for a new business loan using a personal guarantee (a personal guarantee is when someone acts as guarantor on your behalf). The bank will evaluate whether their risk is mitigated by the guarantor’s assets and income. If approved, then you should be able to receive financing in addition to any cash on hand that they might lend you directly.

If you don’t already have credit history, consider applying for a small-business credit card so that you can build up your credit score over time with responsible use of the card. This can also help establish trust between banks and entrepreneurs who want their own merchant accounts but haven’t yet established themselves as worthy borrowers (for example: if only one person works in the company).

Create a marketing plan.

Market analysis.
Target market.
Competitive analysis.
Product/service development.
Marketing strategy: What are you going to do to get your product in front of the right people? How will you interact with customers? How are you going to reach them? What kind of message will this send out about what your company stands for, and how are they going to perceive that? For example, if a customer is looking for a pizza place but has three options—one that delivers only on Tuesdays, one that serves quiche on Fridays and one that features live music—chances are good they’ll choose number three because it feels more fun (even though all three serve the same type of pizza). This is why some businesses think carefully about their branding and messaging as part of their marketing plan; it’s about making sure everyone who sees or hears about your business understands what makes yours different from everyone else’s so they will want yours over others’.

The first steps to starting any business are not easy, but with the right help and advice, they can be done well and successfully

Starting a business can be an overwhelming experience, but with the right help and advice, it can be done well and successfully.

Find the right people for your business.
Have the right financial backing in place before starting out.
Make sure you’ve got legal support on hand before you begin your journey as an entrepreneur or small business owner in this competitive world we live in today!

Conclusion

Starting a small business takes time, dedication, and hard work. But if you have the right knowledge, resources and support network, it can be one of the most rewarding experiences of your life.

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Title image courtesy of Alex Knight on Unsplash