What is Entrepreneurship & Sustainable Tourism Principles for Business
What Is Entrepreneurship?Click to readclose 
Seeking a definition:
Entrepreneurship is commonly known as that process aimed at designing, planning and managing a new business or exploiting and diversifying an existing one.
While there are some obvious similitudes between Entrepreneurship and Management, these two concepts are not quite the same:
Conceptually speaking, within the same company entrepreneurs also play the role of managers whereas the opposite is improbable.
Most importantly, the entrepreneurs more than anyone else take on the so called “business risk” which is linked to the total amount of business, administrative, financial (and so) choices that affect the on-going life and the economic well-being of the firm itself.
•According to the initial literature and the historical practice, the ultimate aim of any firm – and therefore the entrepreneur’s only concern – was the realisation of profit no matter how this might be stressful for the firm’s environment itself.
•That has been an inviolate principle until the mid 60’s, when the worldwide famous economist Milton Friedman discussed the serious need of a paradigm’ switch.
•As stated by the author, firms and entrepreneurs needs to refocus their ultimate motivation considering the implication of their actions on the employees, the stakeholders and most importantly the environment.
•This ground-breaking assumption not only defined a completely new management discipline and research topic (CSR, Corporate Social Responsibility) but displayed also a total new set of business opportunities.
Entrepreneurship & Sustainable TourismClick to readclose
•In a world where people are increasingly sensitive to environmental and cultural issues, it is no surprise that each business industry had to re-evaluate the new existing opportunities and threats within the market where it operates.
•Sustainable tourism is exactly one of these and the basic concept is simply: tourist no longer as mere passengers visitors but as social agents capable of producing a positive impact.
•Here’s a brief video produced by The Travel Foundation that explains in clear details the phenomenon from the origins to the futures perspectives:
https://www.youtube.com/watch?v=JFbbKbdqoJg
•Sustainable Tourism counts few main pillars to effectively reduce the impact of mass tourism on local communities and natural ecosystem:
✔To inform about the culture and the environment of the communities visited.
✔Step outside your comfort-zone.
✔To anticipate and respect the local “Status Quo”.
✔To support and preserve local heritages and traditional values.
✔Remember: your vacation spot is someone else's home.
✔to encourage local business by participating to local economy.
✔Go green as mush as you can.
✔Do not leave any invasive trace of our passage.
•Is Sustainable Tourism a business opportunity? As an UNESCO’s analysis points out, the answer is yes:
“Learning about the impacts of tourism has led many people to seek more responsible holidays. These include various forms of alternative or sustainable tourism such as: ‘nature-based tourism’, ‘ecotourism’ and ‘cultural tourism’. Sustainable tourism is becoming so popular that some say that what we presently call ‘alternative’ will be the ‘mainstream’ in a decade.” (UNESCO)
Basics of business planning and financial planning
Pills of Financial and Business Planning for Sustainable TourismClick to readclose
•All we need is few tips on Business Planning in general and a reliable Financial plan.
The Business PlanClick to readclose
•Designing a Business Plan is an essential starting point regardless of the industry: it displays the main features of the business in terms of marketing, promotion, communication and financial resources.
•Here, according to a very consolidate model, the aspiring sustainable tourism entrepreneur plots down:
✔What are we going to offer to the market?
✔Where and How this offer is going to happen? (what are our macro and micro environment of action?).
✔When will we be at work?
✔And most importantly, Why are we doing this? (what is our driving force?).
•In practice, the content of a Business Plan considers:
✔Brief summary of the project
✔Entrepreneur’s CV and experience
✔Market analysis and a Strategic Marketing Plan
✔Technical feasibility of what we intend to do
✔Economic break-even-point analysis
✔ROI (Return on Investment – what this project will profit?) and risk factors
✔Time plan and activity forecast
The Financial PlanClick to readclose
•Despite its great generality, a Business Plan is not enough to convince bank and investors about the potentiality of our idea.
•Their main concern is to evaluate the economic and financial sustainability of our sustainable tourism business: being our first and main financial source, banks and investors want to make sure that their investment in our activity will be re-payed.
•To do so, they will be primarily interested in one specific financial index:
ROI (Return On Investment) = Net Income / Investment
Where:
•Net Income = Gross Profit – cost and expenses
•Investment = Stock of loan + interest
•This calculation is possible thanks to a second financial measure that goes under the Cash Flow tag and indicates the amount of cash money that daily/weekly/monthly moves into the activity’s bank account, so in other words, the profitability of our business idea.
•Once we are able to prove the solvency of our business idea – and except for other complications – we will have the credit access necessary to kick off our activities.
Value Chain and Networking for Sustainable Tourism
Value Chain and NetworkingClick to readclose
•First described by Micheal Porter in the mid ‘80s, The Value Chain Model has since been a “milestone” in strategic management studies.
•It describes how an industry operates through its activities in order to generate value (in terms of profit margins).
•As we see, each main company’s function belongs to a category of activities:
✔PRIMARY ACTIVITIES
These activities are essential to create a competitive advantage context and firms won’t never be able to operate without them.
We are talking about: Inbound and Outbound Logistics, Input transformation, Marketing and Sales, Services.
✔SUPPORT ACTIVITIES
These activities are not directly impacting but they are fundamental to enable the first ones.
We are talking about: Infrastructure (legal, finance, PR, etc.), Technology, HR, Procurement (Outsourcing contracts and so on).
•Speaking in terms of Sustainable Tourism and Value Chain, much attention goes into Marketing and Sales, Infrastructure and Services, but also, it is very important to depict a fourth dimension that Porter’s model forget to cite on its own: Stakeholders and Networking Relationship.
•The previous diagram (full document available here) depicts incredibly well the multiple facets of the Sustainable Tourism phenomenon once linked and contextualized outside the firm’s bond.
•With such, so many dimensions are linked to each other, the social and economic actors within them can’t pretend to ignore their respective needs.
•While the communities look at the economic interest as an opportunity to revive and enrich their traditions, the businesses make them participate in a win-win game where inhabitants, tourists and local business have something so gain from one another.
Basic of Sharing Economy and Soft Skills for Sharing Economy
Basic of Sharing Economy and Soft Skills for Sharing EconomyClick to readclose
•For these reasons, it is not wrong to admit that the Sustainable Tourism Industry collocates itself in that “universe” known as the Sharing Economy, a term used to refer to any form economic activity that implies strong network transactions of some sort.
•Typical examples of businesses imprinted on a Sharing Economy paradigm are: car sharing, house sharing, food sharing, coworking, crowdfunding, etc.
•According to many experts, sharing economies are destined to be the “general rule” considering their exponential growth potentials and their incredibly high margins of economies of scale.
•(Most of) All Sharing Economies presents four main features:
✔Platform – the classic input-processing phase is now completely dismissed, people (through the use of online platforms) share by themselves what they need when they need it.
✔Community – so to build a strong commitment of each user to the platform itself and the serviced/goods provided by people just like him/her.
•(Most of) All Sharing Economies presents four main features:
✔Convenience – mainly in terms of efficiency, effectiveness and overall satisfaction.
✔Technology – maybe the main pillar behind the phenomenon, considering how sharing economies through technologies made accessible such a vast set of unthinkable services.
•In the following documentary, Jeremy Rifkin (one of the most appreciated and well-respect modern economist) discusses about the challenge of modern capital markets and how sharing economies might represent the next chapter on human history:
https://www.youtube.com/watch?v=QX3M8Ka9vUA
•According to others, the capabilities that the entrepreneurial world needs at the edge of this new era are somehow profoundly different from the ones of any other historical era:
✔Design Thinking – all-inclusive and structured thinking.
✔Complex Problem Solving – so not only “problem-solving” but the ability to deal with a set of complex problems closely related to each other.
✔Complexity Management – the management of uncertainty and non-deterministic contexts.
✔Systemic and “chaos effect” thinking – “what is happening right now cannot not have a impact in the future somewhere else”.
✔Contextual Relational Capabilities – communication and interpersonal skills that are “relatively adequate” to where we are in a precise moment and in a precise context.
Title
Entrepreneurship for sustainable tourism
Keywords
Tourism, Sustainable Tourism, Entrepreneurship, Sharing Economy, Skills, Capabilities, Value Chain and Networking
Author
IDP
Language
English
Demo
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