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I am looking for advice to start a small business in the tourism and hospitality industry

Veteran

Robert Duffy Troy, AL

I would like to start a small lodge with outdoor activities in Alaska. I want to turn the focus to helping veterans with a passion for the outdoors have employment opportunities in the said business. I would eventually like to turn a portion of the company into a non profit focused on outdoor activities for veterans with disabilities.

or would it better serve me to focus on non profit and grow the for profit side later?

anyone in the tourism or hospitality willing to discuss these options or someone with experience starting up both for profit and non profit.

11 January 2022 8 replies Small Business

Answers

Advisor

Theodore Kennedy Andover, MA

Robert - This sounds very similar to what the Travis Mills Foundation is doing in central Maine. Perhaps you could contact them for some advice?

Good luck!

24 January 2022 Helpful answer

Advisor

Lucy Jensen Topanga, CA

Have you thought of owning a franchise in the hospitality industry?
Franchise Ownership - FREE Service for Our Veterans
One in seven franchises in the United States is owned by a military veteran. I represent some profitable franchises that are looking for veterans interested in becoming their own boss.
Please call with any questions or need further information, 310-455-2002

18 January 2022 Helpful answer

Advisor

Paul Tusting Salt Lake City, UT

Hi Robert,
This sounds like a very worthy venture.

Here are some ideas of things to look into before having to make the profit/non-profit decision. I don't know your background, so a lot of this may not be applicable (like if you can buy/build a lodge with cash, or have worked as an outfitter before).

Often financing of residential vs. business (regardless if profit/non-profit) real estate is quite different, with the latter requiring a lot more money down and different interest rates. If you have a region of AK that you are drawn to, consider working for an outfitter in the region to 1) get to know the area, 2) get to know the business, and 3) start making connections there. In regards to #3, it is fairly common for people to buy companies with "owner financing", meaning the new owner pays the previous owner directly. This is appealing in scenarios where conventional business financing is unavailable or unappealing, and allows the previous owner to transition the business (but they don't get a big one time payout). But, these typically come from some sort of working relationship.

Most regions have things called "Convention and Visitor Bureaus" (or "Destination Marketing Organization", "Tourism Marketing Council", etc.) which often funded by certain local tourist-focused taxes (hotels, car rentals, etc.) to support the region.
https://www.visitnewportbeach.com/meetings/article/destination-specialists-cvb-or-dmo/

Mostly these are at the local level, but they often are also affiliated with the state agency (which is funded differently). Here's a couple examples for AK from a quick google search:
State level => https://www.travelalaska.com/
How they break up the regions/communities =>
https://www.travelalaska.com/Destinations/Regions.aspx
https://www.travelalaska.com/Destinations/Communities.aspx
Here's the travel group for the Kenai => https://kenaipeninsula.org/
[I found this quickly by just googling "visit kenai peninsula"]

It's these peoples' job to know what is going on with the local outfitters, lodges, guides, etc. The smaller regional groups are often staffed with long time locals who know everyone + everything going on, and more than anything LOVE their region.

If you don't already know where you want to be and have a strong lay of the land, this is where I suggest starting. They can give you feedback about pros of cons of certain ventures in certain regions. This is an obscure book but does a good job of talking about this broader landscape (I heard the author speak at a tourism conference 10+ years ago).
Civic Tourism, Dan Shilling
https://www.amazon.com/Civic-Tourism-Poetry-Politics-Place/dp/092757926X

If you do go the non-profit route, there are three primary methods of generating revenue (this is an oversimplification):
1) Conventional Fundraising => letters you get in the mail each fall + events
2) Membership => Just what it sounds like
3) Grants => Applying to other organizations for money (government, for profit companies, or larger non-profit funds).
Here's a group to look into in regards to that => https://www.councilofnonprofits.org/

I hope this helps, and please feel free to reach out 1:1 (via this site) if there is anything I can help with.
-Paul Tusting

15 January 2022 Helpful answer

Advisor

June Webb Washington, DC

Hi Robert,

If you want to connect with me on Linkedin, I can introduce you a good friend of mine who have been in the travel and tourism industry as an entrepreneur for over thirty years. He and another partner just recently (one year ago) started a company called The Sky Squad (airport and travel services) and are actively hiring.

June Webb

12 January 2022 Helpful answer

Advisor

Michael Horn Marietta, GA

A free, live, online nine week program is available at Warrior Rising. This link gets you to the registration page. https://www.warriorrising.org/vettoceo/ This program is free to all Active Duty, Reserve, National Guard, and veterans. Join the thousands of others who have taken the Entrepreneurship for Transitioning Warriors course. You can compete for a $20K grant, also.

Advisor

Jordie Kern Amherst, MA

go to www.score.org and get a mentor in the tourism industry. They are awesome. Make sure to conserve your cash, boostrap everything, and find some mentors on LinkedIn. Happy to help you anytime. Go get 'em!

Veteran

Robert Duffy Troy, AL

Thank you both June and Rob.

Connection sent to both.

Rob, I will call after next week as I would like to understand the private club idea more as I have not considered that.

Advisor

Rob Gasperetti Locust Valley, NY

Good morning Robert. I currently work in hospitality and also have been a board member in the non profit sector. They both have their separate sets of rules. You would need two corporations filed with Alaska if you want to separate it into a non profit and a for profit enterprise. You don't need to do both at once. Maybe build it as a for profit and then turn a portion of it into a non profit. Of course you could start as a NFP and just roll with that.
Another option is to set it up as a 501(c)7 like a private club. You would be responsible for sales taxes but have other exemptions. I am in New York, so I'm more familiar with our laws, which can be the most restrictive in the nation.
If you want to chat further, I am at 516-270-5185.

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