Starting and Running a Bed and Breakfast
The easiest way to get into any type of business is to buy one already in operation. Large corporations have been doing this for years. The problem is that your pockets need to be deep enough to either buy the business or convince a bank to lend you the money. Restaurants and motels can be some of the more difficult businesses to start up from nothing. A bed-and-breakfast inn is a combination of both worlds. Buying one already that has already built up a client base and has an established positive reputation can hedge your bet on success.
If you are planning on buying a bed and breakfast, you are stepping into one of the most popular and trendy business for travelers today. Bed-and-breakfast inns are becoming more and more popular with couples as honeymoon destinations. Many people have come to appreciate the home style atmosphere of a bed and breakfast as a great alternative to the sterile but sometimes posh surroundings of modern motels and hotels.
In most bed and breakfasts, you meet the owners when you check in or maybe when you reserve your room. Each room is unique and breakfast is anticipated to be a great finish to an excellent stay. If you are the owner, the story can be a little different. Most owners live in or near their bed-and-breakfast. This can be a part of the hidden costs of a bed and breakfast. You can never really be away from work. It may cost you more than a week's profits to hire someone to take care of things when you need a vacation or become ill. To be profitable, the B & B has to stay relatively booked most of the year, and you have to be a primary source of labor.
In buying this type of business, you will find that the building itself is most of the purchase expense. Be careful not to let the name and goodwill of the establishment raise your purchase price too high. This is even more true if the success of the business relied heavily on the contacts and personality of the previous owners. You will not have either of these available to you. So, do not pay too much. Many successful businesses can support the first owners without making a payment on the purchase price of the business. The new owners will have to make a living and pay for any outstanding loans, too.
Have the building and business inspected for structure, accounting integrity, and pests. Any of these can sink your ship if the cost is too high to correct them. Pay special attention to the basement and kitchen. If the kitchen is not already up to health department standards, you may need to make extensive modifications to bring it up to par. The equipment needed can be very expensive. It would be wise to do your homework before laying out the money for the building and business.
Check out local safety codes. You may have to install special sprinklers or other fire related equipment also. Sometimes, businesses are grandfathered in to old statutes. When the business changes hands, the new owners may have to absorb the cost of upgrades.
Learn about the operating costs of this type of establishment before making a move. A novice in the food industry can lose a lot due to inexperience. Find people other than those running the bed-and-breakfast inn that you are buying to learn from. This way you will know how to ask better questions to know how this business runs.
Check out the decor of each of the guest rooms. You will want to make sure that you can live with the current status of the rooms because it can drain your pocketbook to redecorate and refurnish a large number of rooms. Make sure that the televisions are in working order and receive a good signal.
Investigate how the current owners advertise. You need to know what type of medium works best. It is important to know the cost of these ads. Try to make contact with each of these providers and make sure that you understand their schedules and requirements for ad information. Do not overlook the opportunity to make a website for your new business if it does not already have one. Younger people today only do their business online.
Laundry is another key area. You need to be able to keep up with all of the sheets and towels that are soiled by the guests. You will need about three times as many towels and linens as you have beds to start. More is better. Depending on your physical condition, you may need help to make up rooms and do the laundry. There will be training costs before you open.
A good rule of thumb in running any business is to estimate the costs and double them. You will need to be ready to hit the ground running to keep the bed-and-breakfast inn running seamlessly during the transition. It may require up to three months before your business is steady. Not planning for this will only guarantee that you will not have enough cash to hold on until a profit can be realized. Do not forget things like bookkeepers, computers and software, and other fees that may arise like building permits for construction and modifications.
