Profit margins at most bed and breakfasts are relatively small, so overlooking some important costs can have a big impact on your bottom line – especially when you are just starting out.
I always tell my students that knowing who your guest is makes it much easier to figure out what you will need to set up your new B&B. You will know when your peak season is, and what your guests expect in the way of décor and food.
You won’t waste money like I did! I was in purchase mode in the winter months and bought duvets and wool blankets – when the vast majority of my guests come in the summer months!
Besides the obvious costs however, if this is your first time running your own small accommodation business – or a B&B – here are some important expenses you shouldn’t overlook!
Did you know the number one item that most bed and breakfast owners fail to plan for (especially when they are starting out?) It’s their personal expenses!
The most critical expense when you become self-employed is insurance. Whether it is health, disability, life or insurance for the business or loans, it is important to protect you and your family in case you can no longer work.
Since it is difficult as a small business to get access to the lower prices for insurance that bulk buying offers, find out if it is possible to join a plan hosted by a co-op or the Chamber of Commerce.
Talk to other self-employed people, your financial advisor and an insurance broker for recommendations.
At the other end of the spectrum, it’s the little items like gifts, grooming, clothing, hobbies and entertainment that tend to be overlooked.
Most potential B&B owners want to go into this field because they are seeking more personal fulfillment and control over their work world.
So make sure you build these types of costs into your budget right from the start – and make sure you put aside and use the money as it was intended.
Accepting credit cards is a must for serious bed and breakfast owners.
Figuring out what the real rate is can be difficult when there are so many different types of cards – commercial, reward, international – each with additional fees.
Besides shopping for the best rate, additional considerations include:
I spend a lot of money on groceries – after all, half of my business name is “Breakfast”.
While there are lots of ideas for using up food that hasn’t been served, coming up with ways to decrease the amount of food that comes back on guests’ plates is always a challenge.
Asking yourself the following questions will help you streamline the foods you use:
If you own a busy bed and breakfast with a high turnover, your linens are in constant use.
Unlike the wear-and-tear of a normal home environment, and since your linens must be in pristine condition, replacing your linens on a regular basis is a priority.
There is a reason that large establishments use white linens – they are so much easier to replace one piece at a time.
Having everything white requires very little sorting and it is easier to spot stains and marks that need to be treated before the piece hits the laundry.
Based on my 10 years of experience, I order 3 facecloths and 2 hand towels for every bath sheet I purchase to maintain my inventory.
I did start out with coloured bed linens and ended up with a quantity of sheet sets that didn’t have pillow cases to go with them!
For those B&B owners who prefer to use coloured sheets, I suggest purchasing extra pillow cases in order to replace the ones that get damaged.
Even if your original budget included an investment in a web site, they are not static. I think of mine like a child – it needs to be monitored, nurtured and changed on a regular basis.
As technology diversifies and Google modifies its algorithms, your web site will need investment to keep pace with all these changes.
Planning for these alterations on an annual basis will make it easier to you – and your web site – to stay up to date. Tell your webmaster how you plan to invest in your web site and get his feedback on priority items and costs.
It’s hard enough knowing if the reality of owning a bed and breakfast is going to match the dreams you have.
Unexpected costs can be just one of the many issues that can impact on your budget and stress levels!
Including personal expenses and saving money where you can will go a long way to helping you enjoy your new lifestyle as a B&B owner.
Susan Poole, The B&B Coach
Susan Poole is The B&B Coach and owner of the award-winning 40 Bay Street Bed & Breakfast, located in Parry Sound, Canada. She helps people take the guesswork out of owning a bed and breakfast with her three-step “Design Your Dream B&B” system. To get started on your journey, download her free e-book at http://BandBCoach.com.
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