How to Start a Bed and Breakfast Business

January 12, 2014 | By | 1 Reply More

bed and breakfast businessBed and Breakfast (B&B) is an exciting new “down-home” kind of business springing up among homeowners all across the country. If being domestic is your thing, considering a bed and breakfast business might be in your favor. All it takes is a spare bedroom, a flair for cooking, an outgoing personality and a true enjoyment of tending to the comforts of others — and you could be happy and successful with a bed and breakfast inn business.

Ease of Start-upModerate
Range of Initial Investment$10,000 - $400,000
Time CommitmentFull-time in season
Can be Run from Home?Yes
Success PotentialDifficult, unless you are in a tourist area

Bed and breakfast inns continue to spring up all over the country, and the number is rising. In 1975, there were only 400 bed and breakfast inns in the United States. That number is over 17,000 today. The Professional Association of Innkeepers International foresees a doubling of bed and breakfast inns in the next century, and estimates the B&B industry to be worth $3.4 billion.

Basically, bed and breakfast is a transplant of European hospitality, adapted and refined to the American way of doing things. This growing trend services a type of customer who travels but wants a change of pace from the traditional hotel stay. It might be the corporate traveler, who may prefer the bed and breakfast inn to a hotel when it is convenient to their destination. For leisure travelers, the bed and breakfast inn may be the destination in and of itself when located near a popular or desirable vacation spot.

What a bed and breakfast inn offers customers is a homey, cozy atmosphere at typically the same or slightly lower cost as a comparable hotel. Prices per night could range from a low of $25 to $100 or more. The basic appeal of a Bed and Breakfast Inn for travelers and tourists alike is the fact that it is a quiet “home-style” place to stay. Generally, they enjoy visiting with the people off the superhighway and want to get away from the sterilized atmosphere and sameness of hotels and motels. Instead of hallways of rooms cloned with the same layout and design of bedspreads, wallpaper curtains, fixtures, and carpeting, guests of bed and breakfast inns can expect to get a good night’s sleep in a room with a variety of make-up and design much more like their own beloved bedrooms. Add to that the other elements that make it feel like home – dining room, kitchen, sitting or living room, and some good home cooking – and it’s not hard to see why bed and breakfasts are an appealing choice of travel accommodations.

If you have an extra bedroom, a large home or extra space in your farmhouse, you have the necessary beginnings to start making extra income as a Bed and Breakfast Inn. One of the beautiful aspects of this idea is that so long as you’re hosting “over night visitors” on a small scale, no licenses will be required. It’s always best, however, to check with your local authorities just to be sure.

Naturally, your “visitors” will expect a clean, neat and comfortable home. So assuming that your home meets these prerequisites, and you have a spare bedroom, simply “doll it up” a bit. Make sure it’s painted brightly, there’s an outside window, lots of room, closet space and bureau, and perhaps a small writing desk, and a large comfortable bed, or twin beds.

Keys to Success in the Bed and Breakfast Business

Two things are key to a successful bed and breakfast inn:

  • location; and
  • number of rooms.

Profitability is directly tied to occupancy rate, and so the more desirable the area is for vacationers, or the closer it is to an urban area which draws regular business travelers, the greater the chances for making money. In any case, a bed and breakfast with four or fewer guest rooms will have a more difficult time being profitable, a according to the Professional Association of Innkeepers.

Given a good location and adequate number of rooms, your ability to provide the ultimate in hospitality will be a powerful marketing factor in your bed and breakfast business. Being friendly to all types of guests at all times and responding to their needs – even demanding ones – is essential. Also, cooking home-cooked meals, and keeping things neat, fresh, and orderly are prerequisites for repeat customers.

And with word of mouth advertising so important in a service business like this, providing the extra touches, like turning the beds down or fresh flowers in the rooms, is another smart marketing tool. It’s the little, unexpected things that will pleasantly surprise your guests and etch permanent memories in the minds of these customers.

And finally, bed and breakfast inn owners need to be prepared to do the things they normally do at home anyway – be flexible to sudden changes, ready to generate an alternative plan, and respond calmly and quickly to crisis.

To make your service more special, you can offer visitors, particularly foreigners, a “quick tour” of the interesting sights in your area. However, as your popularity as a B & B Host grows, you’ll find that a lot of local tourists and business people on the road will begin availing themselves of your hospitality. If your visitors are already familiar with the area, you may wish to devise new strategies to highlight the unique features of the place.

Now, suppose you’re organized and ready to receive your first customers. You greet them as host or hostess and offer to assist them in getting situated in the room or rooms you have for them. If they’d like to take a drive around your area and see the points of interest, you do that. And then in the morning, serve them a big, delicious breakfast.

You’ll probably find that foreign visitors will want to stay several days. With most people of this country who are just traveling through your area, it’ll be a one-night stopover. Whatever, if they want to sleep comfortably through the night, eat breakfast and be on their way, so be it. If they want to sit around after breakfast and plan an itinerary for a complete visit of your area, your assistance and help will be greatly appreciated. (Remember those recommendations)!

That’s it! The complete how and why of this tremendously profitable business that’s becoming more and more popular. It’s called Bed & Breakfast, and it’s very definitely a low investment idea. And you can parlay it into a very interesting and comfort able income producing business – all from the comforts of your own home!




Start-Up Costs of a B&B Business 

The personal pay back for providing the ultimate bed and breakfast experience can be very satisfying. Bed and breakfast inn owners have the opportunity to live in a desirable location and spend the majority of their time in the home that they have worked so hard to decorate and maintain. They can have their children at home; children can also become involved in the business. They have the opportunity to meet all kinds of interesting people from around the United States and possibly the world. And the expenses of running a home become tax deductible, i.e., cleaning supplies, car expenses, insurance, eating out, magazines, travel.

The obligations for these benefits, however, are the fact that you need to be at home all day seven days a week, with a telephone nearby at all times. Any time away, like a day off or a vacation, needs to be well planned with a highly reliable replacement hired.

The investment for a bed and breakfast inn will vary substantially depending on if you already own the home or not, and the renovating costs in the area in which you business is located. Expect to pay from as low as $10,000 per room to as high as $40,000 per room in renovation costs of your existing home. If you’re buying a home to convert into a bed and breakfast inn, the costs may be as high as $70,000 per room, again depending on where in the country your business is located.

Room rates will also vary due to geographic location. According to the Professional Association of Innkeepers International, the standard rate ranges from $100 to $120 per night in the northeast and west. In the Midwest and south, rates are in the low $90’s. Corporate rates are typically about 20-25% of the standard rate.

As mentioned earlier, occupancy rates will be key to profitability. Average occupancy rates nationally are at about 38%, with as high as 66% in the west, 51% in the northeast, and 45% in the south. Rural areas are at about 45% and urban areas at about 65%.

With these figures, the Professional Association of Innkeepers International averages three possible income scenarios for potential bed and breakfast inn owners to consider; 1-4 rooms at a 44 percent occupancy rate will generate a gross income of approximately $42,000 for a net loss of $8,000; 5-8 rooms at a 46 percent occupancy rate will generate a gross income of approximately $111,000 for a net profit of $12,000; 9-12 rooms at a 51 percent occupancy rate will generate a gross income of approximately $245,000 for a net profit of $63,000. Keep in mind that some states require bed and breakfast inns with more than six rooms to adhere to the state’s hotel laws.

Marketing Your Bed and Breakfast Business 

If becoming a bed and breakfast inn owner is for you, begin by getting your business listed in as many travel and guidebooks as possible. Make contact with local travel and reservation agents and become a part of their regular referrals. For their services, they will expect between a 10 and 35 percent commission off your room rate.

Most people will either write to you ahead of time, inquiring about the possibilities of staying at your home while in your town or city. This means a bit of advertising on your part, or listing your availability with a B & B broker. Some people will check the local telephone listings, and the newspaper advertisements when they arrive in a strange town. And some people will just be driving across the country, come to a town or city they think is interesting, and start driving through the residential areas looking for Bed and Breakfast Inns.

Thus, you should have a small sign posted either in your front yard or on the front of your house. This sign needn’t be much more than about two feet wide by about ten inches deep. It need only state BED AND BREAKFAST – Inquire Within or Call 123-4567.

For newspaper advertising, a similar listing in the personal column of your local paper, particularly on Thursdays, Fridays and Saturdays, will be all you’ll need. But when it comes to the yellow pages of your telephone and business directories, go with a small display ad that describes in greater detail the comforts and pleasures of your services.

Be sure to list your services with all the travel agencies in your area. A brochure or a short synopsis of what you offer will most assuredly give the travel agents an idea for steering visitors your way. At the same time, listing your services in a number of national travel magazines – particularly those that cater to women – will bring customers in for you.

Listing your services with a broker usually won’t cost you anything up front, but they will expect a certain percentage – usually about 25% of the total bill. This same arrangement applies with travel agents.

Advertising in travel magazines and special sections of newspapers and other periodicals regularly will also support your goal of a steady stream of customers. And look for public relations opportunities as well, like feature stories on television and in print geared for a vacationing audience or some related topic. Get in the habit of sending our press releases to your local media. It may lead to valuable and inexpensive visibility.

The Web has also become an important medium for reaching potential clients for your B&B business. A website is critical to your marketing efforts — and you’d want your website to be at the top of the search engine results when people search for potential lodging or vacation destination in your area. Your website should include:

  • information about your B&B
  • information about the area, including popular and tourist destinations
  • photos of the B&B from the exterior, surrounding area, rooms, common areas such as lobby, bathrooms, etc.
  • inquiry and contact information including telephone numbers and reservation numbers
  • order form

Also use the social media, particularly the visual-oriented social networking sites such as Pinterest or Instagram. Post photos of your B&B, as well as the local destinations and activities.

Finally, with word of mouth advertising being so important to a hospitality business such as this, the more you do to delight your customer while they are within the walls of your inn, the bigger your marketing army. If your customers have a special experience, you can bet they’ll tell everyone at work as well as all their friends and families about it. And keep in touch with them. You can solicit their repeat business through regular mailings offering special discounts and promoting special events in your community that they will want to attend.

Being a bed and breakfast inn owner is much more than just keeping a neat house. It’s a career loaded with variety and challenges -from the tasks of running a business to planning and implementing marketing to personally providing a full array of hospitality services. Whereas hotels have a staff of people performing duties in just one of these areas, you get the opportunity to direct the entire operation . . . and all from the comfort of your own home!

 Recommended Initial Steps

If you are giving this business serious consideration, be a guest of several bed and breakfast inns. Read tourist and travel oriented books for reviews and recommendations. Notice what’s considered “good” and what’s not.

Workshops put on by bed and breakfast inn associations can also help give you vital information on running your own business. For a taste of reality, you may even want to try it out and take on work as an inn sitter for vacationing owners.

Resources

For more information, contact the Professional Association of Innkeepers International http://www.innkeeping.org/. There are also bed and breakfast associations for each state that you can join for your business. 

Recommended Books on Starting a Bed and Breakfast Business:
 

 

Isabel Isidro is the co-founder of PowerHomeBiz.com. A mom of three boys, avid vintage postcard collector, frustrated scrapbooker, she also manages Women Home Business, Starting Up Tips and Learning from Big Boys. Connect with her in Google +.

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How to Start a Bed and Breakfast (B & B) Business
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Bed-and-breakfast (B&B) operation is one of the best home businesses you can embark on. Learn how to start and bed and breakfast business!
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  1. Ike Barefoot says:

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