I have briefly described all basic requirements needed to establish a tourism business in Tanzania. There may be other requirements and steps needed depending on the uniqueness of your business and or personal additional requirements that you need to add.
The article is mostly targeted to new participant in the business and or foreigners who had never invested or did business in Tanzania environments.
Step #1: Deciding to enter into tourism
Decision making for anything someone want to do always carries a lot of spiritual and mental preparedness to start and develop any project or task. Since there a lot of ups and downs to manage a tourism business your decision will make you persevere, cope and go through the challenge to the other side of success. Decision making involve committing resources, time and friends/partners towards the establishment and management of the project.
Step #2: SWOT analysis and Capacity building
It is a good idea to know the external and internal factors that will influence your business. For big businesses you can hire a legal consultant to do some legal systems opportunities and constraints that will probably hinder the existence of your tourism business in Tanzania. Alongside, the consultant will also scan the opportunities that exists and will probably favor the project nourishment.
The other part of your analysis is your or your partners’ strengths and weakness in doing the business. Get the relevant capacity building to the areas of weakness so that you are capable to handle all important areas of your business, issues like legal issues, marketing areas, logistics and tourism management and administration etc.
Step #3: Tourism market survey
Market survey is important to be done before the start of the business in order to know the following:
How many tourists visit Tanzania per year at least in the past 3 years?
How much in terms of US Dollars do they transact each year for the past 3 years?
How many businesses are involved in doing tourism – the major ones?
Where do you fit in?
How will you fit in?
Step #4: Office Establishment
The location for tourism business is simple because customers do not buy physical products and hence office is of less importance compared to the other businesses.
However, the office establishment will tremendously add value to reliability of your customers for the future goodwill of the business.
Please make sure the place where you will construct or rent an office will be easily reachable, secured and furnished with all necessary equipment and tools for tourism.
The availability of internet (now days fiber cable internet if possible), water and power is a mandatory requirement
Step #5: Business legal form selection and registration
Again, you will need a business consultant to help here if you are not experienced in this area. For many businesses, Company Limited by Share if the best option from legal perspective. To run a business under the form of company limited is secure to both parties, owners and customers. Because of registration and regulatory things, it is easier to monitor and locate the company compare to an individual. Like wise if for no reasons the company go bankrupt or involved with accidental judiciary case and or a customer or competitor filed a case for violating certain rights, it is probable the company assets will be confiscated and not the individual assets.
Step #6: Taxation
To know which tax, you pay or will pay in the near future of your business is very important so that you include in your business plan beforehand.
Below are some of the notable list of taxes: For more details please visit http://www.tra.go.tz website
Income tax for small businesses and VAT for big businesses
Import tax if you intend to buy assets abroad
Withholding tax for paying investment return or service fees
Employee pension (10% of employee gross salary)
Worker compensation funds (1% of the total salaries)
Skills and Development Levy (SDL) (4.5% of employee gross salary)
Step #7: Insurance
Insurance for these areas is recommended
Professional liability insurance. -covers a business against negligence claims due to harm that results from mistakes or failure to perform
Property insurance. -Whether a business owns or leases its space, property insurance is a must. This insurance covers equipment, signage, inventory and furniture in the event of a fire, storm or theft
Workers’ compensation insurance. -This covers medical treatment, disability and death benefits in the event an employee is injured or dies as a result of his work with the business.
Home-based businesses. Ask for additional insurance from the Insurance company if you work from home to protect your home-based business
Vehicle insurance. Comprehensive insurance is optional but third-party insurance is a must to cover the security of legal passengers in the vehicle
Business interruption insurance. This covers the destruction caused by catastrophes which actually impact extremely in ability to work and get regular revenue – optional for small businesses
Step #8: Tourism Licensing
Doing tourism business in Tanzania requires some licenses to do the job
Step #10: Business Plan Development and Financial Planning
It is now time to develop a business plan that covers these areas:
Market and Competition Analysis
Business Management Summary
Project Implementation Plan
Attachments to the Business Plan
Step #11: Staff Recruitment and Management
Step #12: Service Provider Scanning, Negotiation and Selection
Step #13: Tourism Product (itineraries) Design and Development,
Step #15: Marketing and Market research (develop marketing programs and consumer research – An ongoing activities)
Step #16: Selling phase
Step #17: Business monitoring, evaluation/review and redesign
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