It’s your big dream: starting a bed and breakfast in a beautiful house and getting to meet interesting people on a daily basis. That would beat your boring day job, no?
Starting a bed and breakfast can be a wonderful experience. You get to live in a fantastic house and work for yourself.
At the same time, it is a business. As such, there are several things you need to keep in mind to succeed with your bed and breakfast. In this guide, you’ll learn the ins and outs of starting a bed and breakfast business.
First up: how do you set up your bed and breakfast?
Starting a bed and breakfast business
Setting up your bed and breakfast
First things first, what’s a bed and breakfast?
A bed and breakfast is a something of a mix between a boutique hotel and a private home. Usually, the service is extremely personal. The manager might live on-site, and it’s not unusual that the manager and the guests spend time together.
Before you even think about opening a bed and breakfast, you need to plan ahead. Planning is essential before you set up your business. If you have a clear roadmap of what to do in certain situations along the way, you make your life a lot easier when you’re running your bed and breakfast.
Planning includes research. Do you know if there’s demand for a B&B in the area where you want to set it up? After all, demand is what makes or breaks a business.
Additionally, you need to plan your financials, marketing, sales, customer service, branding… The list is long.
Most bed and breakfasts are small, family-run businesses that don’t make a huge amount of money.
Most importantly, you should make sure that starting a bed and breakfast is the right thing to do. Mind you, it’s not for everyone. You need to run the administrative and operative side of the business. You need to be persistent (after all, it’ll take some time for your B&B to get profitable), flexible and have social skills. Last but not least, you shouldn’t start a bed and breakfast for the money. Most bed and breakfasts are small, family-run businesses that don’t make a huge amount of money.
Make sure you evaluate what it is you really want before you start looking for a location.
Type of ownership
There are three types of ownership you can choose from when you start a bed and breakfast. The first one – and probably the most popular alternative – is to own the property.
Clearly this has some benefits. If you have a mortgage, you get to keep more of the money once it’s paid off. If you already own the property, you get to keep a bigger part of the money from the start. Plus, you might be able to pocket a profit if you decide to sell the property down the line.
The other side of the coin is that owning the property comes with its own set of responsibilities. For example, if you have a bigger mortgage, it will take time to pay it off. Plus, there are other costs you need to take into consideration like maintenance of the property. Bear in mind that if your property is a bit older or something unexpected happens, those costs can be quite high. And they will affect your budget.
The second alternative is that you rent the property. This means that you don’t have the same responsibilities as an owner. For example, your landlord has the primary responsibility to take care of maintenance. Plus, you don’t have mortgages to pay off.
On the other hand, rent will always be deducted from your earnings. Additionally, your rental agreement might not be renewed for various reasons (or, it might even be canceled). In worst case, that would mean that you have to shut down your B&B. You can take measures to prevent that from happening. For example, you can try to negotiate a longer rental agreement. And, you might want to make sure you’re allowed to renovate the property.
As a hired manager, someone else owns the B&B, and you run it as an employee or a contractor. This is the option with the least risk. Besides, it’s the cheapest option. You don’t have maintenance, rent or any other costs to think about.
The downside is that you have less freedom. Someone else decides what the B&B looks like and how it should be run. If you want to start a bed and breakfast in order to work independently, this might not be the best option for you.
When you start a bed and breakfast, you need to figure out questions concerning the property.
First, you need to decide the living arrangements for your B&B. There are two options:
Either, you, as the manager, sleep in the same building as your guests. Alternatively, you sleep in a separate building. This depends on your preferences and the property. Living in a separate building gives you more privacy and space. On the other hand, your property might limit your ability to do so.
Second, you should define what type of property you want for your B&B. Do you want a historic house? It might help you attract customers, but it requires more work. Or do you want a more modern house? If your property is more generic, you might have to get creative and come up with ways to attract customers.
Demand is key to running a successful bed and breakfast.
Third, and most importantly, you need to figure out where you want to set up your B&B. Keep in mind; demand is key to running a successful bed and breakfast. This means that location is everything.
Need inspiration for finding the perfect location for your bed and breakfast? Below is a list of emerging travel destinations in the US and Europe. Plus, some more unusual travel destinations that attract a lot of tourists on a yearly basis.
Destinations in USA
According to AirBnB, Oak Lawn in Dallas (Texas) had a 260% growth rate last year as a travel destination. Similarly, Poncey-Highland in Atlanta (Georgia) has grown 240%.
TripAdvisor compiles yearly lists of travel destinations that are growing in popularity. These destinations include:
- Laconia (New Hampshire)
- Rosemary Beach (Florida)
- Munising (Michigan)
- Mount Desert Island (Maine)
- Rocky Mountain National Park (Colorado)
- Door County (Wisconsin)
- Seaside (Florida)
- Lago Vistas (Florida)
- Wimberley (Texas)
- Zion National Park (Utah)
- Red River (New Mexico)
- West Yellowstone (Montana)
- Crystal Beach (Texas)
- Lake Geneva (Wisconsin)
- Bushkill (Pennsylvania)
Destinations in Europe
In Europe, AirBnB reports that destinations like Capucins in Bordeaux (France), Koukaki, Athens (Greece), Triana, Seville (Spain) and Hammerbrook, Hamburg (Germany) are growing in popularity. TripAdvisor lists Porto (Portugal) and Brighton (United Kingdom) as top destinations on the rise.
Don’t forget that there’s a vast number of travel destinations that are less ordinary. Here’s a list of curious travel destinations with lots of tourists (in need of accommodation!):
- US Space and Rocket Center, Huntsville (Alabama). A popular destination for space hobbyists of all ages.
- Kentucky Bourbon Trail (Kentucky). A must-see for those who love bourbon.
- Cedar Point, Sandusky (Ohio). Cedar Point is one of the oldest amusement parks and the world’s roller coaster capital.
- Roswell (New Mexico). Home to the International UFO Museum & Research Center, as well as the Annual Roswell UFO Festival during the July 4th weekend.
- The southernmost point, Key West (Florida). The closest connection point to Cuba.
- Wilson’s Creek Battlefield (Missouri). The best-preserved battlefield that hosts an annual candlelight tour and a ceremony.
- The Oregon Vortex and The House of Mystery (Oregon). Home to weird phenomena.
- Bracken Cave (Texas). The world’s largest bat colony with millions of bats flying out at dusk.
Plus, don’t forget that your bed and breakfast could be a travel destination. AirBnB lists 40 of its most popular accommodations. Most of them are located in historic, famous or quirky houses. Tourists choose to book these accommodations (often at a higher price point) because of the experience of staying at such B&Bs.
Laws, regulations and security considerations
Your B&B is a business. As such, you need to be aware of laws and regulations in your country.
If your business falls within US legislation, this means that you need to have things like business licenses in order. What’s more, your property and your services are regulated by several laws. Plus, you need to ensure that the area in which your B&B is located is zoned for bed and breakfast. If not, you’ll need to apply for a variance or a conditional use permit. This leads to interesting situations; you might not be allowed to use signage to attract visitors, and you might have to appear before a planning commission to argument for your B&B business.
All in all, it might take 2-3 years for your bed and breakfast to have all required permits and licenses. Here’s a list of some of the licenses and checks you need to take care of to start a bed and breakfast.
In Europe, you need to adhere to similar regulations. If you set up a B&B in the European Union, there might be specific EU legislation that you need to take into consideration.
Irrespective of where you plan to set up your B&B, one of the most important things to keep in mind is that there are various ordinances on a national and local level that regulate safety. You’ll need to plan for things like fire and food safety. Plus, you might need business insurances.
Running a bed and breakfast
What does your bed and breakfast look like?
To run a successful B&B, you need to make sure you create a concept that works for your customers and yourself. As a hospitality business, this is the main reason visitors choose your B&B instead of a hotel.
First and foremost, is your bed and breakfast open year-round or seasonally? This depends on the location of your property and your own preferences. For example, if you’re property is in an area with lots of tourists in the summer and fewer in the winter, it makes most sense to run a seasonal B&B.
Further, you need to decide what services you offer. Do you have a swimming pool? Do you have theme nights or weekends? Do you host weddings? Or do you offer some leisure activities, like horse riding or tennis?
Additionally, you need to figure out how many meals you serve per day. Normally, a B&B includes a breakfast and some complimentary snacks and drinks. Do you want to offer dinner one or several nights of the week for an extra fee? Or maybe something special, like picnic baskets that guests can bring to the nearby beach?
Branding, sales, and marketing
The most important aspect of your bed and breakfast is to have a steady stream of visitors. Without them, you don’t have a business.
To ensure that people find your B&B, you need to have a good sales and marketing strategy.
Before you focus on spreading the word, you need to decide on your branding.
It’s crucial that you do so because you want to attract the right customer to your business. Remember, if you’re selling to everyone, you’re selling to no one. To establish a brand, you need to cater to a niche. That way, you attract the right people – those who’re interested in your offering and who you want to do business with.
For example, are your target customers retirees who enjoy French cuisine and wine? Or are they families with small kids who love to play in the pool? Maybe you want to target wedding parties and honeymooners. Either way, make sure you have one type of customer in mind.
When you have your niche figured out, you need to decide how you’ll reach out to them by establishing a marketing strategy.
Here’s what you can do:
- Set up your own website.
- Contact the local tourist office and chamber of commerce.
- Attend local event or fairs.
- List on B&B websites and AirBnB.
- List on Craigslist.
- Set up partnerships with local service providers.
- Blog to reach an online audience.
- Learn the basics of SEO to reach customers through Google searches.
- Ask potential and previous customers to sign up for your newsletter and send out emails to them.
- Provide excellent customer service to your guests to tap into word of mouth marketing.
- Put effort into your TripAdvisor listing and the reviews there.
Managing your finances and calculating your room rate
To make sure that your business is stable, you need to make sure you manage your finances correctly.
Most bed and breakfasts won’t make big money. For example, almost half of all European bed and breakfasts make less than EUR10,000 per year. On the other hand, this figure doesn’t tell the whole story. Many B&B owners rent out a few spare rooms in their houses or have seasonal B&Bs. In other words, B&Bs can support you like a full-time job. But you need to be prepared to work hard for it.
To manage your finances, you must make sure that you have your expenses figured out. These include:
- Mortgage. If you don’t own your property, you need to pay a mortgage, which can be a major monthly cost.
- Decoration. This is no small cost. Expenses can go up to tens of thousands of dollars or euros.
- Running costs. These are monthly costs you need to take into account, such as food, electricity, cleaning, your own salary, and insurance.
- Annual expenses. These include costs like accounting.
- Taxes. As a business, you need to pay taxes. If you operate within the European Union, you need to account for VAT.
Now that you have your expenses figured out, you need to calculate your room rate. Your room rate depends on several factors, like:
- Location. Is your bed and breakfast centrally located? Or close to a beach? Is it a popular tourist spot or do you attract business travelers? In that case, you can charge more than if you are located far away.
- Amenities and services. If you offer luxury amenities, you can charge more. Similarly, if you offer more services, that means you can increase your rates.
- The average rate in your area. While you can position yourself as a luxury bed and breakfast with higher prices than other hospitality options in your area, you have to be aware of other prices in your region. Otherwise, you risk losing business.
- Season and weekday. Rates tend to go down in off-seasons or during weekdays due to the decrease in demand.
Apart from these points, your rate needs to make sense for your business. To figure that out, you should divide expenses with the expected amount of visitors over a certain period of time. That way, you can calculate your rate and understand your profit margin per visitor.
How running a bed and breakfast affects your life
There’s one thing you’ll notice when you run a bed and breakfast: it has a huge impact on your life.
Running a bed and breakfast is a job that stretches way beyond the normal 40-hour work week. As the owner, you’re responsible for everything. Starting a bed and breakfast means that you might have to give up other things that you love in your life, like your hobbies. There’s simply no time for things like traveling, going on long hikes or eating out several days of the week.
Instead, 99% of your time goes into your business. When you have guests, your job is to entertain and be there for them. Cleaning, cooking, small-talking… that’s your job. And when there are fewer guests, you’ll need to put extra effort into finding them. You work harder at marketing your business, managing your website, attending events and so forth.
Lots of new bed and breakfast owners are not aware of the sacrifices they might have to make.
Lots of new bed and breakfast owners are not aware of the sacrifices they might have to make. Once they run their bed and breakfast, the reality hits them hard. But if you’re willing to make those sacrifices, running a bed and breakfast might be just the thing for you.
Tips and Advice from Professional Innkeepers
Don’t be a cheapskate
There is a nugget of truth in the old saying “you gotta spend money to make money.” You really can not afford to skimp on marketing nor on maintenance and upkeep. Another old saying with an underlying truth, “penny-wise, pound-foolish.” Certainly very few have unlimited deep pockets, so the trick is to be realistic, know your limits, and not over-extend yourself (although you may have to extend…).
Know what you are offering
Determine your “unique selling proposition,” or USP) and market it appropriately. Don’t try to sell your place as something that it is not. You want to attract guests who will appreciate your offering, and avoid attracting guests whose expectations you will never be able to meet. Again, be realistic, know your limits, and do not overextend yourself. Everyone, your guests and yourself, will be happier.
You are going to need help
Cultivate a network of vendors and service providers that you can rely on. Be realistic in your expectations of them, understand the constraints they operate under, treat them as the valued professionals that they are, pay their bills in a timely manner, and they will favor you. (See “don’t be a cheapskate.”)
You may need employees
Finding, hiring, training, managing, and retaining good employees requires its own special skill set and mindset. One of the keys here is training — training of the employee and training of yourself! The people that you hire are not mind-readers and will most likely not know right off the bat what it is you expect of them. You need to learn to communicate with them and how to do it, show them not just tell them, be realistic in your expectations of them, understand that people’s lives can be complicated, treat them as the valued members of your team that they are, pay them well, and they will favor you. (See “you are going to need help” and “don’t be a cheapskate.”)
You are running a business
Your business needs to maintain adequate cash flow to meet ongoing expenses, and ultimately needs to generate revenue in excess of expenses. You need to know the numbers. Familiarize yourself with the basic principles of accounting and with the relevant tax codes (and other laws) that impact your business. Stay on top of your book-keeping and learn how to get the information out of your systems that you need to make decisions. (But know your limits, and do not overextend yourself. See “you are going to need help,” a professional accountant perhaps?)
Innkeeping is not for wimps
Be prepared to do the unthinkable when the unthinkable happens like repair a bed at 2AM in the morning after honeymooners broke it and are still in it, or unclog places that you never knew could clog.
Innkeepers are in the people business, and people are the icing on the cake. But most guests do not realize the amount of sweat equity that goes into running a bed and breakfast, it’s takes plenty of plain old elbow grease. If you cannot do many household chores yourself, you will lose the benefit of owning and operating an inn. Hiring someone from outside to do so many of the tasks will bring your bottom line down significantly.
Your day will never be dull and your commute enviable.
The most important factor I have learned to owning an inn is that you run the business and don’t let the business run you. This is common for all small or family owned businesses, and add to the equation that you most likely will live in this business, you have to learn how to make time for yourself and your relationships. As we say often, as an innkeeper “You can check in but you can’t check out” so make every moment count and have fun.
Start a pre-planning notebook or spreadsheet.
Just as the real estate brokers say – “location location location”. A destination location and at least a 5-6 room inn will likely support you and your mortgage. A lesser location or smaller property can be a success also, but flexibility and adaptability to what works in your area will be essential. Make sure your local zoning/planning rules will let you proceed with your plans. Getting local rules and determinations about your project in writing will stand you in good stead when local officials move on to other areas.
You will need more upfront $ than you think you need.
You will need to be an expert on your house or building’s construction and systems: plumbing, heating, air conditioning. You need to know how it all goes together and how it works in order to maintain it yourself, or to hire competent help.
You will need to be your own marketer and bookkeeper.
A guest friendly easy to use website with great SEO is a must. I find a reservation system with the capacity for related expense records to be a big help. Again – good to know at least the basics of how those processes work.
A critical eye must be used to evaluate your property, your rooms and your service. Is yours up to the standards you expect when staying in lodgings yourself?
The food part is really important!
Past restaurant experience will be a huge help in menu and service planning. Especially if you are cooking and serving without additional help, all kitchen and dining room layout plus cooking and service procedures must be efficient so you can do it all, roll with the punches and keep a smile on your face!
Guests will puzzle you, pester you and absolutely be a pleasure. If making them happy genuinely makes you happy – inn-keeping just may be for you!
If you are “off the path” or rural, it is important to give people a reason to come to your area – and to stay with you. I made my area and my small city a destination. I made turn-by-turn routes to see things in my area, and nothing is too small to include because if it is there someone will be interested in it (I mark those places as FYI). Guests know nothing of your area and it is up to you to tell them why they should come.
Rail-trails, Covered Bridges, Farmers markets, historic things, birthplace of, burial place of, attractions, golf courses, birding sites, wineries, orchards & U-Pick, anything and everything. I must have done something right because we celebrate 20 years as a B & B (start-up) in July.
Also, never be afraid to share information or help someone AND be involved in your community. They have families who need a place to stay sometimes. I am an “import aka an alien” to my city although from this State originally. I built a reputation as being honest, helping when needed, and a person of integrity – these things help in getting local people to recommend you.
Start with a good B&B Website
We have many great WordPress Themes for B&Bs, all come with theme updates and one-on-one support. Hundreds of amazing properties (client showcase) worldwide already use our themes, you would be in really good company.
Keep on learning
Last but not least, any business owner needs to keep something in mind: never stop learning
Before you even start your business, there’s just so much information out there. Even when your business is blooming it will constantly evolve, and you need to stay on track.
Here are online courses that will help you start your bed and breakfast.
Courses that teach you how to start a bed and breakfast:
- Lynda.com (Several options)
- Google Online Marketing Challenge (Free, and you get a USD250 AdWords budget to spend on your business)
- Inbound Digital Marketing Course + Certification (Free)
Checklist for starting a bed and breakfast
- Research your business: location, customers and marketing;
- Create a roadmap for your business so that you know what to do in all situations;
- Determine if you want to own or rent your B&B property or become a hired manager;
- Figure out what type of property you’re looking for;
- Research legislation and regulations that apply on your business in your country and region;
- Build your brand and set up a marketing strategy;
- Figure out your finances – calculate expenses and room rates;
- Sign up for one or several online courses to keep on learning.
Bed and breakfast owners’ experiences
- Living the Dream of Owning a B&B (WSJ)
- Any tips on starting a B&B? (The Guardian)
- Suite Dreams: Opening a Bed and Breakfast (Time)
- How to run your own bed and breakfast business (BBC)
Other useful links
- Bed and Breakfast (Tips for B&B owners, USA)
- Bed and Breakfast Europe (Tips for B&B owners, Europe)
- Buy a B&B in USA
- Buy a B&B in Europe
- INNspiring.com | Innkeeper Forum
List your B&B:
Have your say
How do you see the life of a bed and breakfast owner, is it for you? What do you think are the main perks and benefits of running a bed and breakfast? Share your thoughts in the comments area below!