Whats really needed to start a respectable hostel

Maybe it is just me but I have been to many hostels and my favorite were the small ones with a good vibe. This is why I am starting my hostel in this same fashion.

My Hostle is going to be a 4 bedroom, 2 full bath hostel. There will be 22 beds in the building and me and my partner will live there in a seperate room. We will stress cleanliness and we have great ideas for how we will make it look like our favorites...(Greg-Tom Hostel in Poland). Do we need to do anything to the house other then paint? We look to take a loan to cover the first years rent ($1500 a month + 3000 for Utilities, estimate) and all the furniture, etc... that will be invovled. I know that I will have to get permits to run as a "inn" but why will I have to attack electricity and Plumbing in the building? only ask this because I see that people are spending a lot more then we ever dreamed of spending. Also we would like to be able to open a second location that will be for short-long term stays for a month or two, what kind of regulation is needed for that. I know that in the States, Loftstel and USA Hostels do this. Please Advice?