Opening a Hotel

Opening an Hotel

Most people, at least if we consider the developed world where finding one’s next meal is not the majority’s preoccupation, people want to make money. Many people want to make money by acquiring the skills and qualifications that employers look for, or academic and experiential credentials, while other people prefer to take the more entrepreneurial route and become their own own boss.

Naturally, being your own boss has many advantages. You deduce how much vacations and free time you get, when and how hard you work, and even if you show up at work at all in many cases. However, being your own boss also has disadvantages. Most enterprises in this world have pros and cons. For example, if you happen to be the sole proprietor of a business firm, you alone bear all the risks of the company.

Hotel in Nassau. Photo by Elena

Still, the company can also go public if it is a large enough company to go public, or sell stock and raise capital that way. Thus, according to corporate law, the shareholders share in ownership of the company. Therefore, a Board of Directors may be created which could even fire the original founder through an unanimous vote! The principal agent theorem is often cited here because management’s first and foremost goal should be to maximize shareholders’ value, by paying higher dividends in profits, for example, but often times personal goals such as salary bonuses or other managerial cash incentives may be more appealing to a particular manager.

Another way for entrepreneurs to enter the business world without an initial business idea of their own, is through franchising. Choice Hotels is one such example. Choice Hotels include The Econo Lodge, The Comfort Inn, the Quality Inn and many other hotels chains which business owners could invest in. In a way, such a situation may be viewed as the best of both worlds, since the franchisee fees take care of the business concept, but the entrepreneur still has a business he or she gets to run.