You can run your bed and breakfast alone if you are the independent type. Or the bed and breakfast can be a family affair, with everyone – even the kids – contributing to the running of the business.
Depending on how many rooms you want to rent out when you open a bed and breakfast, you could enjoy a part-time or a full-time income. If your business is seasonal, catering to a ski crowd or summer vacationers, you can close down and travel during the off season, if you want.
Bed and breakfasts are the fastest growing segment of the lodging business.
What Bed and Breakfast Businesses Do
Bed and breakfast owners provide a private space in their own homes for overnight visitors. Entrepreneurial owners should expect to wear multiple hats as marketers, concierges, cooks, chefs, maids, tour guides, bookkeepers and host/hostesses.
For many people, running a bed and breakfast (B&B) may seem like a dream job. However, this is a business, that you'll need to go into with your eyes wide open. If you're not a people person committed to working 24/7, running a B&B may be more like a recurring nightmare. Do some homework to ensure your plan is not only viable but doable.
Things to Consider Before Starting a Bed & Breakfast Business
1. Evaluate whether you have the personality and interest to host guests in your house night and day, season after season. Being outgoing and friendly is part of the job whether or not you feel like it. Interview other B&B owners and learn about their lives --and whether that's the life you really want.
Before spending a lot of time and money, use this personal assessment survey to help determine if you and your partner (if you have one) have the skills needed.
Answer honestly by writing (answering) yes or no to each statement below. (Remember, this survey is for you if you're not completely honest with your answers, it won't do you any good!)
Complete the survey for both yourself and for your partner (if applicable). Have your partner do the same. (So you both fill out the survey twice.)
Personal Assessment Survey
- I enjoy getting up early and preparing meals.
- I'm highly organized and manage my time well.
- I'm self-motivated and a self-starter.
- I can do several tasks at one time.
- I enjoy entertaining.
- I find it easy to get along with most people.
- I'm tolerant and patient.
- I can handle conflict without alienation.
- I work well under pressure.
- I can work long hours and face a variety of interruptions.
- I learn from mistakes and make changes as needed.
- I keep my home neat and clean at all times.
- I enjoy performing home maintenance.
- I'm cheerful.
- I enjoy interior decorating and remodeling.
- I enjoy gardening and landscaping.
- I have a regular income.
- I communicate well on the phone.
- I write well and regularly.
- I'm persistent.
- I consider myself a risk-taker.
- I have a high energy level.
- I enjoy serving others.
- I consider myself flexible.
- I have a good business sense.
- I can handle the business end of a B&B.
- I handle emergencies well.
Now identify, in writing, your strengths and weaknesses. If you plan to become an innkeeper, your strengths should outweigh your weaknesses and you need to determine ways to compensate for the weak areas.
2. Decide where you'd like to live and work. Locations close to tourist areas are generally the most popular, although out-of-the-way accommodations can be just as popular if there is something distinctive and alluring about the place or its surroundings.
3. Check local zoning codes by calling the zoning board at your town hall to ask about the process for getting approval for a B&B. Be aware that some areas prohibit them. If you plan to renovate an existing building, have a contractor confirm compliance with local building codes. Find out whether there are any restrictions on the types of food that can be served, such as a full breakfast versus just coffee and muffins.
4. Draw up a business plan. Work your numbers carefully. The profit margin for many B&Bs is modest at best. Contact national trade associations such as the American Bed and Breakfast Association (abba.com) for guidelines about setting up a B&B. Also, talk to other B&B owners; some might share financial information.
5. Determine how many guests you can and want to accommodate. Some B&Bs limit themselves to just a few guests, others take in 20 and more. Investigate how this will be impacted by the building codes; B&Bs
with more than five rooms must comply with the Americans with Disabilities Act (ADA.gov). For Canadians visit BBCanada.com for provinical and federal information.
6. Survey local competitors' prices. You'll want to be competitive with others in the area.
7. Develop an effective yet realistic marketing plan and budget. How will people hear about your B&B?
Effective advertising can be expensive and high-income customers may be difficult to reach. Free ink is terrific marketing, and cheaper than advertising, so explore getting editorial coverage in local papers, regional publications and national travel magazines. A good PR consultant may be worth the cost if you get the right coverage.
8. Compile an e-mail list of past guests to take advantage of cheap and effective outreach. Make sure you are listed in all relevant B&B guides and directories, and both printed publications and online resources. Pay attention to your competition's advertising: What works and what doesn't? Remember that marketing can seem like a financial black hole, so spend for maximum measurable impact. Put up a website to attract customers from all over
9. Hire qualified staff to keep things running smoothly. A house cleaner is vital; a cook, dishwasher, bartender, waiter and groundskeeper may be helpful additions during the high season and as the business grows.
10. Subscribe to a reservation service agency in order to reach a broader market, reduce your workload, and turn over the financial dealings to the experts. Turning over reservation and payment arrangements may negate the need for a merchant credit card account, too. However, there is an annual fee and a commission to be paid for each reservation handled. B&B Midwest Reservations (bandbmidwest.com), for example, charges a $75 setup fee and takes 25 percent of each reservation made on a member's behalf.
11. Set guest policies and house rules regarding check-in and -out schedules, cancellations and late arrivals, as well as whether pets, children and smoking are permitted.
12. Cater to your guests by making their experience as wonderful as possible. Serve excellent food and build a good wine list. Make sure the rooms are spotless, cozy and inviting. Remember that it's the little things that will keep guests coming back, such as the homemade muffins, the twilight kayak paddle or the tour of the gardens.
13. Network with fellow B&B owners, visitors bureaus, tourism offices and chambers of commerce to increase awareness of your business. Join national trade associations like ABBA.
Recommended Skills and Experience to Run a Bed and Breakfast
Bed and breakfast business owners need to have exceptional people skills as well as a willingness to allow strangers into almost all aspects of their lives. As well, innkeepers should:
- Be willing to read, network and educate themselves about the bed and breakfast business constantly;
- Have strong communication skills, including talking on the phone and answering emails;
- Understand that hiring contractors is sometimes necessary, and have the skills to hire and/or fire landscapers, managers, cleaners and hostesses;
- Know that sometimes running a B&B is very similar to running a household with children, such as cleaning up after people constantly, ensuring every need and request is taken care of, and that people are warm, fed and content every step of their visit.
The start up costs to run a bed and breakfast are considerably higher than most business start ups, as both property and upgrading are almost always required before opening up for business. Although, many people who decide to start a bed and breakfast business do so because they already have a big beautiful home (and whose children have left the nest).
Expect to budget for furniture, linens, interior decorating, landscaping, amenities (such as soap and toiletries), food and remodeling (like adding additional bathrooms).
A computer, dedicated phone line, fax machine, and printer will also be required, as will reservations software ($250-1,000), a website that accepts online reservations, and the ability to process credit card transactions.
Finally, related business organizations and taking part in online B&B business guidebooks will also add to the final start up tally.
How Much Can a Bed and Breakfast Business Make?
Independent bed and breakfast businesses charge anywhere from $45 a night per person to $150 a night or more depending on location, amenities and current, concurrent events. An easy way to determine going rates in the area of interest is perform a market analysis by perusing the local yellow pages and reviewing what other B&B businesses are charging, and what sort of amenities come along with the price. As an example:
- If a B&B charges $80/night and has 2 rooms to rent, they can potentially make $1120 a week, or $58,240 a year.
- Most B&B owners take at least two weeks off a year ($2240) and only have a 50% occupancy rate at any given time ($27,000 approx.).
- Therefore a B&B owner with two rooms available at all times, taking two weeks off a year for vacation time, can expect to earn $27,000 a year. This doesn't include expenses however, which are better calculated by crunching the numbers in a basic business plan financial worksheet.
First off, take a peek at a bed and breakfast business plan for a better idea as to what is required to run the business on a day-to-day basis. As well, the following resources should be of assistance:
- Professional Association of Innkeepers International;
- Be An Innkeeper - a fantastic free online resource from About.com;
- Complete Idiot's Guide to Running a Bed and Breakfast, by Susannah Craig and Park Davis;
- Start and Run a Profitable Bed and Breakfast Business, by Monica and Richard Taylor; and
- How To Start and Operate Your Own Bed and Breakfast, by Martha Watson Murphy and Amelia Rockwell
Additional Resources
The Ultimate Guide to
Starting a Bed and Breakfast Business
Starting a B&B in Canada, here's a great resource:
http://www.bbcanada.com/bb_marketplace/instructors/
If starting a bed and breakfast business is something you're considering, I hope you found this post helpful.
Until tomorrow,
Terry
