Your Trustworthy Guide To Starting Bed & Breakfast

What’s in it for me?

If you’re one of those wanting to pursue a full-time career in opening a bed and breakfast, this article is for you. Know the nitty-gritty of starting from scratch, the requirements, the factors favorable, etc. for helping your new venture flourish. This article is also for those who are looking to derive some additional income from their b&b business-a complete, transparent guide helping you know where to start and where to stop your search!

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Imagine a romantic getaway for two in a home, aglow with the patina of the lovely restored antiques, the sparkle of silver, and the luster of fine china. The rich and robust aroma of fresh, French pressed coffee along with homemade cinnamon rolls with the fire crackling in the hearth….

…This may be what most people conjure while considering a stay at a bed and breakfast (B&B). This is exactly what makes B&B a lucrative option for guests as well as an attractive business prospect for everyone. However, there are various things to consider in case you want to tread the path of ownership for starting bed & breakfast. Owning and running a B&B could be profitable under the perfect circumstances. Hence, if you are looking to venture into the hospitality business, B&B might be an ideal thing for you.

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What Type Of Business Is A Bed And Breakfast?

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If you’ve never had the opportunity to experience a B&B, you might easily confuse it with privately run small hotels. A B&B is a type of accommodation that hosts the guests for a short duration, let’s say for an overnight stay, and provides them with breakfast in the morning. The experience is very much unlike that of the hotels, inns, and motels where the dynamics are different and stays are for a comparatively longer duration. B&B’s are more like homestays and private residences. As clear from the name itself, a bed and breakfast offers guests a place to sleep and a home-cooked meal the very next morning.

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In short, a B&B can be considered a hybrid model that combines the comfort and luxury of a high-end hotel along with the decor and atmosphere of a charming private residence.

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Regardless of the property, what apparently differentiates starting bed & breakfast or B&Bs from vacation rentals, motels or hotels is the personal attention guests receive from their hosts. The owner of B&B is more often than not immersed in the guests’ experience, as they play the role of a chef, meal companion, or host. Unlike hotels, the interaction with the guests is not only confined to merely check-in and check-out services. The host seems to play a vital role in almost every aspect of the guests’ stay or hires staff to do so.

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When did B&Bs start and how much do bed and breakfasts cost?

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B&Bs date back nearly to the beginning of time, but they’ve improved significantly over the years and have become a noticeable trend in various countries across the world. Since breakfast is part of the package price of a B&B, it usually ranges between $80 and $275 for a double room on average.

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Are Bed And Breakfasts Profitable?

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The most common questions for a lot of potentially interested-in-running-a-B&B candidates out there are “Can you make a living off a bed and breakfast?” and “Is owning a bed and breakfast worth it?” The ultimate motive for starting any business is to generate a steady income and keep it profitable in the long run. The reasons behind starting bed & breakfast could be many-  to supplement your income, escape the rat race, manifest your love of being a host/hostess, or create a business out of your home.

So, to answer your question- yes, you can make a living off a bed and breakfast once your business picks up the pace and is steady. And also, it is absolutely worth it to give it a try even if it takes a lot to get yourself out there!

The expected revenue can vary a great deal and depends on various factors such as the number of rooms you have to offer, the nature of your locale (whether seasonal or not), creative methods employed by you to promote your business, marketing tactics, goodwill, your experience and expertise in this particular field, etc. Nancy Sandstorm, a former lecturer on the B&B startups and currently working as an innkeeper states that “this is not a business you go into to make a lot of money.’’ Furthermore, she states, “You can make a profit, and many of your personal expenses are semi-covered. But it’s a lifestyle decision. You’ll make your real profit when you sell.”

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Once you crunch the numbers, it wouldn’t be realistic on your part to assume that the earnings generated from B&B can be sufficient for you to lead a comfortable life. Let us assume that you have a five-room property priced at $100 per night which implies:

• Every room filled means an income of $500 per night
• 1825 room nights with 365 nights in a year
• Assuming every room is booked every night, the gross income stands at $182,500 annually

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You need to remember that starting bed & breakfast and running it certainly doesn’t ensure a shortcut to getting rich quickly. If you approach it in this particular way, then you’re surely going to end up disappointed. How profitable is a bed and breakfast will depend on a number of dependent variables and B&B’s should always be treated as a lifestyle decision instead of anything otherwise unless you’ve been doing it for quite some time or perceiving it as a source of making some additional income!

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How To Start Bed And Breakfast Business?

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If you have finally decided to open a bed and breakfast business, you might be wondering what steps to take to start a bed and breakfast. Perhaps it might be in your best interest to glance over the following requirements for bed and breakfast business:

• Know your property: Perhaps you have a house you want to convert to B&B, or planning to buy a new property altogether for getting started in the niche. Hence the first step is to find your property and if it already exists then gauge it. Analyze whether it’s good enough to help you stay afloat in the market, big enough to host a considerable amount of guests you have in mind, what’s the overall condition of the property, etc. Since B&B businesses must exude a feeling of comfort and oneness with the hosts, ensure that your said property serves that purpose.

• Identify your location: Before transforming your property or the additional space at your home into a B&B, you must consider your location. Questions such as, “Are there any nearby attractions that will entice your guests to stay with you?” “What sort of clientele do you expect to attract?” “Is the demand for nightly stays in and around your area high?” need to be taken into account.

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Starting Bed & Breakfast- Basic Requirements

• Research the market well: You must research the market well in advance before committing fully. Make sure to carefully observe the surrounding areas and the properties to have an idea regarding the average rate for nightly stays. Once you have sufficient knowledge about the market and the property that you plan to buy or the prospects of running a successful B&B, you can easily go ahead and do the needful.

• Renovate: Having a property alone is not enough. There are provisions you need to make to convert your B&B into a full-time business if you plan to stay on track with the progress. From cooking and cleaning to adjusting things as per guests’ preferences will have to be done by you as a host or the staff you choose to hire. Since it’s more of a personal experience, it has to be personalized which means you need to equip your property with the most essential and fully-functioning amenities. Based on the size of the property to the number of guests it can contain, the renovations might vary from as little as applying a fresh coat of paint to more dramatic changes like restructuring certain areas, installing private attached bathrooms, b&b hot tub, and so on.

Apart from these, it is also important for you to have financial leeway in case of emergencies and expenses that you might not have considered before starting bed & breakfast business:

• Legalities – To transform your property and space, you will be required to apply to the Local Planning Committee. Other important steps related to the legalities usually include obtaining a license to sell liquor, enforcing regulations related to smoking, upgrading home insurance, obtaining a permit for handling food safety, and so on. You must obtain a license and pay heed to proper tax rules for a bed and breakfast business before owning and operating it. For starters, a general license for business is required as per the requirement of the local authority.

Find out more about what documents are needed and how to apply for a bed and breakfast license

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Ensuring A Smooth Functioning Of Your Bed And Breakfast Business Model

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Once all the above-mentioned requirements have been fulfilled by you, it’s time to start your business even if it means taking baby steps in the beginning. To make your business more fruitful, consider taking the following steps:

• Be Aware Of Your Guests’ Preferences: Since it’s more of a one-on-one experience for the hosts and the guests, as a host, you must be capable of accommodating your guests’ preferences in almost every aspect, especially breakfast. This is what distinguishes a B&B from an ordinary hotel, motel, or inn. Be wary of what your guests like/dislike for breakfast and adjust your menu accordingly. The best practice is to ask them ahead of time to make provisions for their preferred breakfast menu.

• Stock Up On Amenities: You wouldn’t want a guest running out of shampoo in the bathroom while they are taking a shower. Hence replenishing your amenities and being careful about linen replacements besides fixing the sudden glitches or malfunction is your onus and you must take it seriously.

• Market Your Property Effectively: What’s the point of operating a private venture like starting bed & breakfast when nobody’s going to take note of that? Listing your property on third-party channels, especially Airbnb and Vrbo can enhance your visibility and allow you to build on your property portfolio, thereby providing more information to the prospects looking to book in your area in the nearest bed and breakfast search by punching in keywords like “nice bed and breakfast near me.” You can also create your own website to get more direct bookings.

• Hire Staff If Need Be: If you feel that it’s quite a Herculean task to manage so many guests on your own, based on the size of the property, go ahead with hiring a considerable workforce. This will assist you in all or at least certain areas of the guest experience for smooth functioning and increased operational efficiency.

• Don’t Rely Too Much On Old-School Methods: In a world where technology is advancing at an unprecedented rate, it’s good to deploy cost-effective technology in your stack for smooth functioning. Don’t expect to do everything manually. Communication tools like guest messaging are extremely cost-effective and easy to use, making it convenient for both you and your guests to stay in touch at every stage of the guest journey.

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Challenges In Owning And Starting Bed & Breakfast

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Starting any business is a difficult endeavor and it becomes even more complicated when it comes to the hospitality industry. This domain has been one of the hardest-hit sectors during the COVID19 pandemic. Due to the travel impositions applied all over the world, travelers or guests were confined to their homes. However, two years later, when the world is still trying to recover from the nightmare of the recent past, there has been a drastic change. Rapid strides made in technology have transformed the hospitality sector in these challenging times.

The global online travel market size was valued at $354.2 billion in 2020 and is estimated to reach $1,835.6 billion by 2031, registering a CAGR of 14.8% from 2022 to 2031. Physical and social distancing norms have led to the emphasis and development of various technologies such as guest messaging, automation, and AI among others. In addition, the significance of reviews has also gained popularity. Your lucrative business can still fall flat on your face if you’re unable to navigate certain challenges which can come in the form of:

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1. Low Occupancy Rates

One of the major challenges faced in starting bed & breakfast is the low occupancy rates during certain seasons. This is not merely a B&B issue but a broader hospitality industry-wise one. One of the ways to counter this particular issue is to provide attractive packages and discounts by showcasing various local attractions to potential guests.

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2. Unreasonable/Faulty Pricing Policy

You may have a great and positive reputation as a host but you must be careful with the pricing policy to ensure it doesn’t eat away your profits. If you fail to set the right price for your property, you might end up suffering huge losses and be even forced to close the entity. Hence, you should be having an idea regarding the price of your competitors and set a competitive rate for you to succeed in the long run.

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3. Going In Blind

The hospitality industry is usually a very competitive sector and hence, retaining customers and expecting loyalty might be difficult for you to achieve. Staying at a bed and breakfast is usually an experience that many guests try at least once. However, providing a personalized touch to your guests’ experience might help create a long-lasting and unique impression, setting you apart from the rest. So do your homework properly by researching the market well!

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4. Not Doing Your Homework Properly

It usually becomes difficult for any entrepreneur to survive and thrive in the long run if constant monitoring of their competitors is not done. To stay competitive in starting bed & breakfast, you might need to constantly remain a step ahead of your competitors by doing comprehensive research of the target market, your competitors, the industry you’re in, the latest trends, etc.

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5. Hiring The Wrong Employees Or Not Hiring At All

You might be the most enthusiastic and hard-working person out there. But you stand to wear yourself thin if you go to do everything on your own. Hence, it would be wise on your part to delegate some of the tasks to others by hiring the right people for your bed and breakfast business plan. However, hiring the perfect people can often turn out to be a challenging task. Therefore, you might want to take your time in selecting the appropriate candidates for your job, so that you can improve your service and remain competitive going forward by posing open-ended questions to spend not too much time also in the hiring process.

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6. Lack Of USP (Unique Selling Point)

If you aren’t trying to provide each guest with a positive and unique experience, your business might end up being less attractive over time. This can inflict serious damage to your business despite all your hard work. You can tackle this by closely monitoring your competitors and trying to offer unique experiences by thinking out of the box.

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7. Lack Of Constant Upgrading

The modern world is at the behest of technology. If you fail to constantly upgrade yourself with the ever-changing world of hospitality and new developments, you risk being left behind in starting bed & breakfast. Investment in technologies such as channel managers, guest messaging, website creators, and property management systems among others, not only helps you to improve your business and the way it’s being run but also your overall reputation. Employing such technologies helps you by accelerating and automating your business along with providing you with cloud-based advantages. In addition, it also helps you in expanding your market reach and online distribution of rooms.

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8. Too Much Reliance On Third-Party Intermediaries

While it’s crucial to list your properties on third-party apps like Airbnb, Vrbo, and other OTAs, some platforms can come with hidden fees and extra charges such as cleaning fees, service tax, maintenance and marketing fees, etc. which is more of a deal-breaker for some guests. Again, as a host, you need to pay commission to these platforms instead of having it all your in pocket. Hence a moderate approach to getting bookings both through third-party and directly is the key to navigating this challenge.

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Strategies That Will Help Your B&B Business Stay Afloat

“Business strategy is the battle plan for a better future” – Patrick Dixon

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Strategies and planning are necessary for any endeavor to succeed, especially starting bed & breakfast. Unless you have a sound strategy to deal with the issues that you can assume to face while running your business, it is more likely that you won’t survive for long. In this regard, before opening a B&B, you need to assess the risks and formulate strategies that will help you deal with them. Following are some of the strategies you may need to implement to ensure that yours is a profitable venture:

a. Quality Guest Experience

A satisfied customer is the best business strategy of all. Curating a unique and personalized stay for your guests can be regarded as the direct way to make providing a quality and memorable experience for your guests. It is also essential for you to keep in touch with your guests even after they are gone. This can be easily done with the help of technology by setting automated and personalized emails to keep them in the loop regarding the ongoing or upcoming discounts and offers.

b. Upselling Services

Upselling is an important chance to run a bed and breakfast business to fetch some additional money. This can be done by offering additional services or tying up with vendors. You can choose to do this at any given time in the guest journey process.

c. SWOT Analysis

SWOT analysis (Strength, Weakness, Opportunity, and Threat) can be regarded as an old-school and popular method of assessing particular business parameters. This method provides a clear indication of your business performance and the scope for improvement. For a B&B owner, this can be implemented to assess the current financial situation of the business along with forecasting issues that might derail your business going forward. Once you are done with the analysis, it will help you implement the necessary changes to emphasize your business.

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Starting Bed & Breakfast- Unique Challenges

d. Offering Discounts:

Discounts are an age-old method of attracting guests to your place. It is merely the illusion of providing services or products at lower rates. However, it is more often not the case. You need to consider this before showcasing the best deal for your place. These offers can vary from advanced bookings, last-minute deals, OTA deals, peak/low seasonal bookings, and packaged-based discounts among others. It is important to make sure that the price quoted by you doesn’t impact your establishment’s bottom line.

e. Revenue Management

Due to the nature of the industry, proper and effective management of revenue is the need of the hour. Demand-based variable pricing strategy can be regarded as an important tactic for you to ensure continued profit. This particular strategy can also be regarded as a dynamic pricing strategy. This isn’t just dependent on demand, but other factors such as seasonality, current occupancy, and competitor pricing among others. Hence, employing an appropriate revenue management system or service helps optimize the inventory and pricing of the property. Since B&B owners usually possess a limited budget to work with, this can be very useful.

f. Promote Your Destination

Ever heard of Airbnb Experiences? It’s a type of accommodation wherein the guests can indulge themselves in varied experiences besides having a wonderful stay at a particular destination. Integrating something like that in your business model by providing unique experiences to the guests- giving them a tour of the coffee plantation, conducting pottery classes, a hot balloon ride, etc. can work wonders as travelers are always looking for help in enjoying more local experiences.

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Starting Bed & Breakfast- Unique Challenges

g. Developing A Sound Marketing Strategy

Online distribution can be regarded as one of the most effective methods of attracting guests. The current generation of travelers is usually tech-savvy and conducts thorough research before booking on travel websites. Hence, that’s where you should aim to catch them.

Multi-channel advertisement of your rooms helps expand your reach and maximizes your chance of increasing occupancy rates. To save time and effort in manually updating listings and avoiding errors such as double bookings, channel management solutions can be used. They help you to automate the entire process and update in real-time. Furthermore, if you integrate an online booking engine with a website that is smooth and sleek, it shouldn’t be an issue to attract guests to your property. In this endeavor, a website booking engine and creator can be utilized to make bookings a seamless experience for both you and your guests.

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Last But Not The Least, Is Operating A B&B The Right Decision For You?

Ask yourself these questions- “Do I have people skills?” “Do I enjoy being around people?” “Am I good at socializing?” “Am I a multitasker?” If your answer is affirmative, this might be a potential career option for you!

B&Bs require you to remain attentive and caring towards your guests since you are more likely to stay on the same site and interact regularly. You are not only responsible for handling the booking, but cleaning rooms, showing your guests around, and even providing them with breakfast.

Due to the nature of the job, it is important for you as a host and owner of a B&B to have a personality that suits this particular feature. Since you are going to interact with people regularly and host them, you must be outgoing and personable by nature. The constant flow of incoming and outgoing guests requires you to have some of the above-mentioned traits, that are essential for you to succeed in this particular domain.

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Selling Your Bed & Breakfast

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There may come a time when you’d want to wrap everything up which you did in starting bed & breakfast and instead now advertise your bed and breakfast business for sale. But it’s more complicated than it looks!

Here are a few things you need to be mindful of before putting up a “for sale” sign:

• Sort your taxes and finances. Having an auditor is immensely helpful to handle this
• Expect a thorough inspection of your property- left, right, and center
• Provide a good perception of your business with regular bookings and high review scores to get the buyer interested in taking over
• Provide a fully furnished deal for added incentive
• Work with professional realtors to fix the accurate pricing and for enhanced visibility on potential selling platforms

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Conclusion

B&Bs have become immensely popular over the years among guests and hosts alike. Ever since Airbnb has disrupted the hospitality industry with its presence, the rise in popularity of a B&B has increased manifold, and bed and breakfast business opportunities and scope are immense. The romantic notions associated with a bed and breakfast have led to owning one, a dream for many people. This can be yet another reason this particular segment of the hospitality industry has gained popularity and momentum. However, there are a wide variety of challenges one must be aware of before owning a B&B. If these challenges prove to be too much to handle, then perhaps you should consider other alternatives instead of starting bed & breakfast.

On the other hand, if you’re determined to succeed and have the perfect game plan and strategy, owning and running a B&B is just the thing for you.

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