Owning and operating a bed and breakfast can be highly profitable under the right circumstances. If you want to start a new business venture or invest in property, you might find that opening a bed and breakfast is just what you need.
However, B&Bs aren’t for everyone. They take a little more dedication, and hospitality than average vacation rental homes typically require. Is running a B&B a good fit for you?
What Is A Bed And Breakfast?
A B&B is unique from typical hotels or vacation rental homes. Usually, they are set in large, historic homes. However, they can also be found in lighthouses, high-rises, farms, and newer homes.
As the name implies, a bed and breakfast offers the guests a room to sleep and a home-cooked breakfast.
Bed and breakfast establishments usually only have between 4 and 10 guest rooms. The owner or manager lives on-site with the travelers and interacts daily, making them feel they are guests in a private home.
Is Opening A Bed And Breakfast Right For You?
There are many more factors involved in running a B&B than owning a nightly or weekly rental home. For example, thanks to the internet, you can host your guests in typical rental homes without interacting with them one-on-one. Just tell them how to access the keys and direct them to your welcome letter or handbook; they’re good to go on their own.
B&Bs, on the other hand, requires that you give your guest much more attention. You will most likely live on the site and be in contact with guests every day. Not only will you handle the booking, but you will also be responsible for providing breakfasts and cleaning rooms.
A bed and breakfast owner must be personable and outgoing, ready to meet new people and welcome them into their homes. It is not your typical nine to five gig. The constant flow of new guests will keep you busy day in and day out. Consider the following traits when determining whether opening a bed and breakfast is right for you:
- Do you know how to start conversations and make people feel at ease?
- Can you balance entertaining your guests and giving them space to enjoy their vacation?
- Are you and your family members comfortable having strangers in your home weekly and possibly daily?
- Can you maintain professionalism when guests are demanding or complaintive?
- Will being available to your customers 24/7 strain your other relationships?
How To Start A Bed And Breakfast?
If you’ve decided that this fast-paced, ever-changing job description suits you, you may wonder how to start a bed and breakfast business. Truthfully, many factors should be considered before opening a bed and breakfast.
Here are just a few things you should consider before buying a rental property for your B&B business:
1. Location
Before converting your home or buying a property with hopes of it becoming a B&B, you’ll want to consider the location. Are there nearby attractions that will entice guests to stay with you? Is there a high demand for nightly stays in the area? What kind of clientele will your property attract?
2. Condition
How much work will the house be put into making it a viable option for guests? For example, how well has it been kept up if you buy a Victorian-era home? Will a remodel or extreme renovations be needed to make the space livable and inviting? Before investing, ensure you add up the cost of the alterations, you’ll need to make on the house.
3. Investment
Do your research. Look at similar properties in surrounding areas to be sure whether you’re getting a good deal. Knowing the market well will give you the power to buy with confidence.
It would help to estimate the costs of running a bed and breakfast before buying the property. Get the inns for sale right here at bedandbreakfastforsale.com.
Have you considered how you will finance your new business? Ask yourself the following questions before going any further.
- What kind of loan or mortgage will I need?
- How high monthly payments can I afford?
- What will the renovation cost?
- How much will I be able to set aside for furniture and other amenities?
- Will I be able to afford additional expenses such as cleaning, repairs, and maintenance?
- Have I considered the cost of marketing and OTA fees?
Something commonly overlooked is the costs of taxes and licenses. You also want to ensure you have plenty of financial leeway in case of emergencies or other expenses you didn’t anticipate.
1. Legalities
Transforming your home space into a business space will require applying to make these changes with the Local Planning Committee. Other necessary legal steps could include updating your home insurance, obtaining a food safety handling permit, enforcing local smoking regulations, or getting a license to sell alcohol, depending on your national and local laws.
Securing a license before you begin operating a bed and breakfast is vital. For starters, you will need a general business license as your local government requires. Depending on your state or country’s regulations, you may also need to prove that your primary residence is at a different address.
As with any business, taxes are inevitable. Paying your taxes is just as important as getting a license to run your business. Thankfully, there are several items you can count as deductible expenses. Please keep track of these things throughout the year and include them when you file your taxes.
2. Bed and Breakfast Business Plan
A written business plan is essential to profiting from your bed and breakfast. The essentials to your business plan include:
- Initial Cost (includes property price, renovations, furniture, linens, etc.)
- Cost of operation (includes utilities, cable, WIFI, etc.)
- Employees and payroll (what tasks you are willing to hire for and how much you’re ready to pay)
- Room price per night
- Estimated monthly income
- Marketing and advertising (includes the price of posting on vacation rental platforms)
With a bed and breakfast business plan, you can make crucial decisions quickly and easily based on the rules and frameworks you already have.
Nothing will benefit you to identify risks before you invest than having a viable business plan. Creating one will help you define your business strategies in the opening stages of your business and in the future. You can refer back to that plan anytime you need to make a decision, and it will ensure you’re headed in the right direction.
The best way to know if investing in a B&B will be worthwhile is to create a business plan before you purchase the property.
Takeaway
There are many factors to consider before jumping into the B&B business experience. It can be a rewarding business venture with considerable profit potential, but diligent research and planning are essential to success.
With the right drive and personality, you can successfully run your B&B. Just be sure to follow the tips above and don’t cut corners. A little extra work now will make all the difference in the fate of your B&B.
