Are you planning to open your own hostel?

If you have always wanted to run your own hostel and have finally decided to go for it, start by turning the idea into a plan. Do the research, and don't be shy about asking people how the business works, even if it means knocking on the doors of hostels that are already open.

A good first step is a SWOT analysis: an honest look at your strengths, weaknesses, opportunities and threats.

Strengths

List what you have going for you. The building is often the biggest strength. If you own the property or can use a family home, you avoid rent, and that matters most in the first few months, which are rarely the most profitable. Every cost you don't carry at the start gives you more time to build up bookings.

Weaknesses

Be honest about what you don't know. Many owners open with no hospitality experience and learn on the job, sometimes the hard way. Your guests can help: experienced travellers have stayed in dozens of hostels and know what works. A typical tip is to take a deposit for room keys, since guests lose them and every copy costs money.

You don't have to learn alone either. HostelManagement.com has run forums for hostel owners, managers and staff since 2004, and there are owners' groups on social media where people share advice every day.

Opportunities

Being the first hostel in town is a real opportunity, but it is not a requirement. New hostels open all the time. Look for a good location, rent you can afford and a building that won't need heavy renovation. You may also find a hostel for sale in a good spot with fair rent. If you do, check how long the lease has left to run before you commit.

Threats

Sooner or later, new hostels will open near you. More competition usually pushes rates down, so plan for it from the start. Some threats are outside anyone's control, such as political crises or natural disasters, and they belong in the plan too.

Choosing the location

Beyond the SWOT, check these before you sign anything:

• Things to do nearby. Museums, sights, restaurants and nightlife are what bring travellers to an area.
• Transport links. Guests need trains, buses or flights to reach you, and a way to get around once they arrive.
• Safety. Run-down areas are cheaper, but most travellers won't trade their safety for a lower price.
• The neighbours. Think carefully about how your hostel will affect the people who live around it.
• Language. Ordering a meal is one thing. Negotiating a lease, hiring staff and dealing with suppliers in the local language is another.
• Travel trends. Check whether the area is still popular with budget travellers, or whether they are moving out as more expensive developments move in.
• A central address. It is not essential. In a safe area with good transport, a good atmosphere and good facilities can compete with a spot in the centre.

Once the doors open, the day-to-day work begins. With thelobbyboy, you can price dorms per bed and keep your rates and availability in sync with Hostelworld, Booking.com and the other major OTAs, so your time goes to the guests.