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A PG business plan is not paperwork for its own sake. Writing it forces you to answer the questions that decide whether the PG makes money — before you sign a lease. It is also what a bank, a partner or a landlord will ask for. Below is a section-by-section template, with a sample plan for a 24-bed PG filled in. Copy the structure, replace every number with your own, and test it in the PG profit calculator.
1. Executive summary
Half a page: what you will run, where, for whom, at what price, how much it costs to start, and when it pays back.
Sample: A 24-bed co-ed PG for working professionals in a residential lane 1.5 km from a large IT park. Double and triple sharing with meals, Wi-Fi and housekeeping, at ₹8,000–₹10,000 per bed. Setup budget ₹7 lakh; break-even at about 65% occupancy; target 85% within six months.
2. Market and location
- Demand sources within 3 km: offices, IT parks, colleges, hospitals — with approximate headcount.
- Competition: list 10 nearby PGs with sharing types, prices and what is included.
- Price benchmark: use real rents, not asking prices. Our PG Rent Index and city pages such as PG rent in Bangalore show what tenants actually pay.
- Your edge: one or two things residents will notice — location, cleanliness, food, AC, flexible meals, women-only floors.
3. Rooms, services and pricing
| Room type | Rooms | Beds | Rent per bed (sample) |
|---|---|---|---|
| Double sharing, AC | 4 | 8 | ₹10,000 |
| Double sharing, non-AC | 4 | 8 | ₹8,500 |
| Triple sharing, non-AC | 2 | 6 | ₹7,500 |
| Single room | 2 | 2 | ₹13,000 |
| Total | 12 | 24 |
State what the rent includes (meals, Wi-Fi, electricity up to a limit, housekeeping, laundry), the deposit (one to two months’ rent is common), notice period and lock-in.
4. Setup budget
| Item | Sample amount |
|---|---|
| Lease security deposit and advance | ₹2,40,000 |
| Beds, mattresses, cupboards, tables (24 beds) | ₹2,20,000 |
| Painting, repairs, plumbing and wiring | ₹80,000 |
| Kitchen equipment | ₹60,000 |
| Water purifier, geysers, washing machine | ₹45,000 |
| CCTV, fire extinguishers, locks | ₹30,000 |
| Licences, registrations, marketing launch | ₹25,000 |
| Total | ₹7,00,000 |
Get three quotes for the big items. Keep a contingency of 10–15%.
5. Monthly profit and loss
| At 70% (17 beds) | At 83% (20 beds) | |
|---|---|---|
| Rent collected (average ₹9,000/bed) | ₹1,53,000 | ₹1,80,000 |
| Lease rent | ₹55,000 | ₹55,000 |
| Food (₹2,500 per resident) | ₹42,500 | ₹50,000 |
| Staff (cook, cleaner, part-time warden) | ₹30,000 | ₹30,000 |
| Electricity, water, gas (net) | ₹12,000 | ₹14,000 |
| Wi-Fi, repairs, consumables, software | ₹8,000 | ₹9,000 |
| Profit | ₹5,500 | ₹22,000 |
The sample shows the core truth of PG economics: the gap between 70% and 83% occupancy is the business. Your plan should say exactly how you will reach and hold the higher number.
6. Break-even and payback
- Fixed costs (lease, staff, base utilities, Wi-Fi): about ₹1,05,000 a month in the sample.
- Contribution per occupied bed: ₹9,000 rent − ₹2,500 food = ₹6,500.
- Break-even: ₹1,05,000 ÷ ₹6,500 ≈ 16 beds, or about 67% occupancy.
- Payback at 83%: ₹7,00,000 ÷ ₹22,000 ≈ 32 months.
If payback is longer than the lease lock-in protects you for, rethink the lease, the price or the setup budget.
7. Licences and compliance
List what you will obtain and when: municipal trade licence, fire safety clearance where required, FSSAI registration for the kitchen, police verification of residents, written agreements with stamp duty, and your GST position. Details in our compliance checklist, GST on PG rent and police verification guide.
8. Operations plan
- Staff: roles, salaries, shifts and who has keys.
- Rent collection: due date, reminders, online payments, receipts — and who follows up on dues.
- Food: weekly menu, grocery budget per resident, feedback.
- Maintenance: weekly checks, a repair budget, a complaint process with response times.
- Records: resident IDs, agreements, deposits and payments in one system. An app such as PG management software keeps this in one place from day one.
9. Marketing plan
- Google Business Profile with photos, prices and phone number.
- Listings on PG directories and social media groups for the area.
- Tie-ups with nearby offices’ HR teams and college offices.
- Referral offer for current residents.
- Target: 50% occupancy by month 2, 75% by month 4, 85% by month 6.
10. Risks and how you will handle them
| Risk | Mitigation |
|---|---|
| Slow occupancy | Launch offers, referral bonus, keep fixed costs low until 70% |
| Landlord ends lease | Lease with PG use permitted and a lock-in matching your payback |
| Rule changes (licensing, safety) | Budget for compliance; keep records ready for inspections |
| Late rent and bad debts | Deposits, written agreements, automatic reminders |
| Food cost overruns | Weekly grocery tracking against a per-resident budget |
One-page checklist
- Demand and competitor prices checked on the ground
- Lease allows PG use, in writing
- Room mix and prices set against real local rents
- Setup budget from three quotes, plus contingency
- Monthly P&L at 70% and 85% occupancy (or your own scenarios)
- Break-even and payback calculated
- Licences listed with dates
- Operations and rent-collection process written down
- Marketing plan with occupancy targets
- Risks and mitigations
Frequently asked questions
How much investment is needed to start a PG?
It depends on the city, number of beds, whether you lease or own, and whether you serve food. Build a setup budget from real quotes — the sample above for a leased 24-bed PG comes to about ₹7 lakh.
What should a PG business plan include?
Summary, market and location, rooms and pricing, setup budget, monthly profit and loss, break-even and payback, licences, operations, marketing and risks.
Do banks give loans for a PG business?
Many banks finance small businesses with a clear plan and registration; Udyam (MSME) registration can help. Talk to your bank with this plan and your property documents.
Next steps: read how to start a PG business and is a PG business profitable?
Last reviewed: October 2026. Sample figures are illustrations, not market averages.
We build My PG Manager, the app PG and hostel owners use for rooms, tenants, rent collection and WhatsApp reminders. Our guides come from running it with owners across India.
