Getting business plan ready. Any advice?

Hey Paudie,

Welcome to the show! :)

The way I see it, people are looking for cheaper accommodation these days (more and more hotels are becoming insolvent) and many people may be taking (involuntary) career breaks and travelling more. Do you agree?

IMHO it's more about conscious budget traveling. When people have less money, they start rethink their options. Some people can travel for months for the same price of a two week all inclusive holiday and some of our guests can really surprise us what options they can take to feed their travelbug planted in their ears... :D

I understand that it all depends on the location but does anyone have any advice on how much expenses a hostel goes through in its first couple of years? (from office supplies and canteen costs to waste collection fees and insurance costs). Obviously I want to keep costs down to an absolute minimal to begin with.

The idea is a 50 bed hostel (4rooms x 4bunk beds, 4 triples, 3 x double/twin rooms). [is this a workable set-up?] The general location is Ireland but no concrete idea on a location yet.

Ireland is a good choice... strangely not many good hostels there yet! My suggestion would be to get away from the crowdy Dublin and find a good location on the countryside. My favourite town is Galway, at least one more good hostel is definitely needed over there.

Personally I'd make it around 60 beds, more dorms, less triples and probably a building near Eyre square or Quay street... or a much smaller, seasonal hostel in Aran Islands.

The main questions I have are:
What assumptions should I make before working on figures (staff wages, rent, insurance, fixture and fitting costs?)

I'd suggest you should make a site trip. Pick the location, visit some real estate agents, check on the internet if possible (for example here) and if you've got the right town, visit the city council for zoning laws as well. They'll tell you what restrictions they have to get a hostel permission.

As soon as you've got the right location, you could visit the surrounding cities with hostels and ask the owners themselves, they most likely will help you...

Are sites like hostelworld and hostelsclub worth joining and are there any disadvantages to being on them? Alternatively, can I generate enough bookings from my own website?

There are both advantages and disadvantages to be present on booking engines. They will fill you up quickly, all you have to do is to provide good ratings. The price for it is the 10% commission. The most profitable ones are definitely Hostelworld and Hostelbookers. You can register your hostel to other ones as well and remove the allocation on each engine manually as soon as you have a full house (to avoid overbookings). This is a painful job (as long as the API is not provided globally ;) ) but after getting a routine you will know which engines are worth to keep.

Should the dorms/showers be same-sex only or communal?

Could work both ways. Mixed dorms would be better, showers could be either individual with a dressing room or communal. The smaller shower rooms you've got the better.

Electric or boiler system showers?

Gas is usually cheaper everywhere. We've got a mixed mode system, a gas boiler as the primary source attached to an electric heated tank. We don't spend much electricity as the tank keeps the water hot all the time.

What kind of laundry machine should I look for or can I outsource this?

Laundry needs lots of space and work but if you outsource it you gotta pay them to do that. For such sized hostel I guess you could do it yourself.

What average occupancy should I work with (50% - 60%)?

That would be ideal for a break even, so the plans should be calculated around it. Ideally a hostel would be around 80% occupancy, anything above that is a good business, IMHO. ;)

Do I need a reception program or can I just as easily use excel?

You could even work on paper sheets, although not recommended. There are plenty of property management software mentioned on this forum, I'm sure reading after will help to make the right decision.

Good luck with the hostel! ;)