Establishing any business and excelling in it is not something that happens overnight. Starting a B&B or small hotel is no exception, especially if you are new to the hospitality industry.
With countless factors to consider before opening a property to the public, and even more to contend with once your are running your business day-today, it can easily become overwhelming.
But there’s no need to give up on your dream. In this article, we’ll provide a comprehensive guide to starting and running a B&B, so you can put your best foot forward and start enjoying the benefits of a successful small business sooner rather than later.
Starting a bed and breakfast is an exciting chapter in your life. It’s your own little place that you can transform into the perfect accommodation option for guests and a fun way to make a living. However, if you don’t get everything right in the beginning, you could be doomed for the duration.
These are the most important things to consider.
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Firstly, you might want to think about if it’s actually something you want to commit to. It’s a huge undertaking that will require your devoted attention day in and day out. Many people may find the concept outweighs the practice.
So you can look before you leap you should be able to answer these questions (among others) affirmatively:
It’s extremely important you know what to expect from the job. This is not simply so you know if you’re a good fit, but so that you can do the job well and give yourself the best chance at success. It’s incredibly difficult endeavour to undertake alone or with a partner.
Another consideration is why you are opening a bed and breakfast. Are you embarking on this journey because the lifestyle appeals to you and you love customer service, or because you see it simply as an opportunity to make money? Loving what you do is generally the recipe needed for favourable results. What you define as success is up to you. Maybe as long as you are receiving strong reviews and keeping your head above water you’re happy, or perhaps you want to be an award winning property.
Any business can be profitable, and of course that’s the ideal goal. Hopefully by providing an exceptional guest experience and becoming popular, your property can achieve profit through the right management and strategies. Before that becomes a reality, you need to establish a steady revenue income. This means attracting regular bookings.
Back to the question: Will you make money running a bed and breakfast?
When you really drill down the numbers, it’s probably unrealistic to expect to earn your entire living off one B&B property. Let’s use an example of a six-room property with pricing at $90 per night:
The amount of money you can expect to make all depends on the size of your property, the area you’re located in and how luxurious your property is, but at the end of the day running a bed and breakfast is certainly not a get-rich-quick scheme. Or at least, if you treat it like one you’ll be sorely disappointed. Starting a B&B is more of a lifestyle decision rather than a savvy business choice and you’re likely to make any real profit when you sell it.
Again, it comes down to whether running a B&B is a good fit for you. If you have already had a successful career and want to supplement your previous income, then it could be just the thing for you.
There are a number of circumstances under which you might open a bed and breakfast. Perhaps you’re buying land to build one, or turning your own home into one, or purchasing an existing property.
When starting from scratch and opening a new business, you first must consider many of the costs you might face. Depending on what country you’re starting your business, costs will vary. They include but are not limited to:
And this is all before you account for costs on advertising and marketing, or if you need to hire staff!
If you’re new to opening and running a bed and breakfast there are countless pitfalls you might encounter if you’re not careful. Although it’s vital to be a “people person”, that alone is not enough. You need to educate yourself about how to market and sell your business and figure out what works. Otherwise, you’ll be overflowing with hospitality and no one to provide it to.
Here are 10 mistakes to avoid:
1. Not understanding your market
Printing off brochures and putting up billboards might seem like a great idea, but what if your ideal market is actually international? This is why you need to know who your ideal guest is, a lot of the time it will be an overseas visitor wanting to see and learn more about the country they’re visiting. Think about what will bring you business. It’s likely that being online will help you more than anything other tactic.
2. Over delivering and underselling
You might be so excited about hosting guests that you go above and beyond the normal realms of service. This is all very well and it will certainly gain you positive customer reviews but if it starts eating away at your profit margins it won’t be sustainable. Don’t be afraid to raise prices to match the quality of service. If you deliver luxury, then you should be paid for it.
3. Trying to do it all
An abundance of work goes into owning and running a B&B, so it’s more or less impossible to run the whole show on your own, even if you’d like to. It’s recommended to find some help, be that a partner or hired staff along with purchasing a property management system to handle all the admin tasks.
4. Failing to do enough research
Without research, you’re setting yourself up for failure. You need to conduct comprehensive analysis on the area you want to open in, your possible competitors, your possible target markets, and what guests will be expecting from a property like yours. Knowing this information will give you a clear plan of attack.
5. Rushing to open the doors
As we know, first impressions are the biggest impressions and a bad first impression is hard to fix. If you open your property before you’re truly ready you risk guests being exposed to disorganisation or unprofessionalism. This will give you a negative reputation straight away, and a new business can’t afford that.
6. Operating without policies
Setting clear rules and policies for your guests will prevent your guests taking advantage of you or any awkward conversations or misunderstandings.
Not only do you need to set clear policies, they must also be visible and presented to guests prior to and during their stay. Sending out pre-arrival guest emails outlining all the policies your bed and breakfast may have around refunds, pets, property damages, early check-ins and late check-outs is the best way to keep guests informed.
7. Going in blind
It’s imperative you know what to expect from the job and the industry. As previously stated, you have to know this is the right job for you, lest you risk burnout in a short amount of time.
8. Being the same
If you’re not trying to differentiate your property and give guests and unique experience they’ll remember, what’s the point? Study your competitors and see how you can do things outside the box to delight guests and create the reputation that your property is the best in the area.
9. Sticking to medieval management strategies
We now live in a technological world and those who stick to pen and paper management methods are being left behind, still frustrated by the amount of time it takes to do their admin and confused by constant human error. Investing in technology like property management systems, channel managers, website builders and more will not only improve the way your business runs, but also the perception guests have of your business. These systems will give you cloud-based benefits that include automating and accelerating your administration and paperwork tasks, helping distribute your rooms online and expand your market reach, and enable your website to look and function great while keeping staying up-to-date with Google.
10. Not covering all bases
Before you operate, you need to make sure your business is fully legal and safe. This means taking care of zoning compliance, providing enough parking, obtaining permits and passing mandatory inspections, ensuring certificates and training like first aid and safe food handling are up-to-date, and purchasing insurance.
Any property with five rooms or more is too much to take on without help. When you decide you do need someone to help you run your B&B, it doesn’t mean it’s easy to find the right person.
Find those skill sets that you do need - is it bookkeeping, cleaning, or cooking? Or do you need a multitasker who can do a little bit of everything? Remember that your time is better spent on servicing guests and figuring out how to market your property. Create a detailed job description once you’re sure you know what you need.
The next step is getting your job description out to a talented pool of individuals. Advertise on social media, through family and friends, on association job boards and website forums, and regular job sites.
Once you’re interviewing candidates it’s important to uncover quickly if they’re right for the role and also the right fit to work with you personally. Ask open ended questions to reveal their true character, get references from past employers, and even conduct practical tests if need be. You should only hire people you can trust.
Then you need to maintain a good working relationship with the successful candidate. To keep staff happy, make sure you:
There are a number of advantages to buying an established bed and breakfast since a lot of the groundwork has already been done for you and revenue stream should be immediately accessible for you.
However, there’s a vast amount of information you need to look for and understand when making a purchase decision. Make sure you know the following as a starting point:
All of this relates to finding the best B&B for you, one that will suit your envisioned goals and lifestyle.
Additional questions you should be asking yourself include:
Further factors that will influence your decision to buy or reject a property centre around why it was sold in the first place. Is it for financial circumstances, family reasons or does it require a big investment? It’s essential to know why it’s being sold so you aren’t putting yourself at risk.
One of the most important things you can do is to put the opportunities into perspective. Perhaps you’ve found the perfect property but the area is saturated with businesses just like yours. Researching the local competition before you buy is a smart move. This way you can sense any chances to create a niche for yourself and continue attracting regular business. It’s best to give yourself a few choices and narrow your decision down to more than one option. Then you can compare the revenue opportunities for each respective property.
Once you have your B&B’s doors open it’s time to knuckle down to the they day-to-day operation of the property.
Marketing your property, taking reservations, checking guests in and out, perfecting the service you provide, maintaining a strong relationship with your audience, reporting on performance, and budgeting are all things you’ll need to look at while you go through life as a bed and breakfast operator. There’s a lot more to it than cooking breakfast and pointing travellers towards the nearest attraction.
It’s a lot to juggle but we have tips and tricks for all of it!
Online distribution is one of the most effective ways to bring guests to your hotel. Modern travellers typically do their research and booking on travel websites, so that’s where you need to catch their eye.
Advertising your rooms on multiple channels gives you the best chance at raising your occupancy rate. The most popular channels (known in the industry as online travel agents, or OTAs) include Booking.com and Expedia, but Airbnb is also suitable for small properties, and there a number of niche channels that suit particular properties or guest types. It’s important to have a diverse channel mix and advertise all rooms at the same time.
Normally this would mean a lot of time is spent on manually updating your listings when bookings are made and increase the risk of double bookings. However, if you use a channel manager these processes will be automated and updated in real-time. That takes away one worry.
You do have to pay a commission fee to these online travel agents when they secure a reservation on your behalf but that’s no reason not to connect. In fact, direct bookings can still occur from these sites. If you have your profile completed accurately, visitors can move from your OTA listing to your own website. From there they may make a booking directly with you, commission-free.
You can make this easier and more attractive for them by improving the look, speed, and functionality of your website and integrating an online booking engine. Just like a property management system and channel manager, a website builder and booking engine are designed to make bookings simpler for guests and more seamless for you, while aiding your ability to show-off your property and destination. One of the greatest benefits these technologies have is that they work together to keep Google happy, make your property easily accessible, and provide guests with an easy reservation process.
Here are some tips on optimising your OTA profiles:
You can also take bookings via your social media channels on Facebook and even Instagram through your booking engine. Given how often travellers are browsing on these platforms it’s an essential marketplace for your property. Make sure you’re working hard to build and audience and increase engagement by posting interesting and relevant content regularly.
Some content suggestions include:
Two of the most recent tactics to improve your online distribution come in the form of mobile devices and metasearch sites. Mobile technology has been impacting online distribution for the last several years, but its rise in popularity is not slowing. You not only need to have a working mobile web design, but you need to be partnering with distribution agents who know how to drive mobile traffic. Guests who use their mobile phones or tablets to browse your website are looking for large, clear booking buttons, simple booking forms and a safe way to make their payments.
When it comes to metasearch sites, a connection with them can result in a high increase in traffic volume. Metasearch sites offer visitors real-time booking information about a large number of hotels and B&Bs in their chosen destination, allowing them to quickly compare room rates and facilities in the relevant market.
These channels are no longer optional for hotels - they are a necessary part of your distribution strategy. Explore different metasearch sites, such as Google Hotel Ads, Trivago or Kayak, in order to discover the best distribution channel for your property.
We say ideal world because that’s what your guests are looking for. They don’t want any friction or disappointment. So you need to do everything you can to meet these expectations.
If we think about the guest booking journey:
Travellers will usually first see your property online. They may have performed a Google search, be browsing online travel agents, surfing social media, or looking you up after receiving a recommendation. This first impression will hopefully wow them; meaning you’ll need some fantastic imagery to catch their eye and ignite their imagination.
Once they’re aware of you there’s a high chance they’ll visit both your website and social media channels providing the first impression was positive. From their perspective, they have a lot of options so they want to know everything quickly, without having to search endlessly for information. The design of your website is paramount. Ideally you’ll have clearly visible book now buttons, straightforward menus such as ‘about us’ or ‘attractions’, a gallery of images, and rates and availability all accessible from the home page. If you make it simple for guests, it’s more likely they’ll reward you with their reservation.
Once a guest has confirmed a booking you can both start preparing for the stay. Travellers will become excited and will begin anticipating their trip. They’ll want to plan the activities they’ll do, what they should pack, where they should eat etc. Ideally, you’ll want to know as much about them as possible so you can better serve them when they arrive, and you should be able to help them out with any enquiries. Send pre-stay emails to suit both these needs. Guests are always happy to hear from their hosts prior to a stay and if you come bearing gifts in the form of recommendations and tips, they’ll be even more pleased. You can also use this as a chance to ask them if they require anything in particular from you.
When the guest has settled into your property it’s all up to you. Warm, personalised service is what they’re after while they look to relax in a quaint location and explore the surrounding area. Stay attentive to their needs and be available as much as you can in case they require assistance. If there are any contact details you don’t have yet, make sure you capture these so you can remain in touch with your guests. After they leave you may want to thank them for the stay, ask them for a review, invite them to stay again with a discount, or alert them to the fact they left something behind. The ultimate goal of welcoming a guest into your property is to gain a loyal customer who will come back each year.
Obviously some businesses are more successful than others and there are many reasons for this. However, you can at least eliminate any fault of your own by ticking all the boxes when it comes to best practice management of a bed and breakfast.
Here’s a list of the best ways you can manage your B&B and set yourself up with the best chance of success.
Before you do anything, you must first prove to yourself that running a B&B will be a worthwhile venture for you (and your family). Drawing up a thorough business plan is the way to do this.
The business planning process will include a lot of research. It’s important to be realistic in evaluating what you can offer potential guests. Ask yourself what potential guests want and how you can bring your wants and their wants together.
You also seek out online forums and groups, since these are full of people with the exact experience you’re looking for. The same goes for local tourism organisations and associations.
Online review sites are an essential consideration. You can use these to gain valuable feedback and also learn how to better run your business and serve your guests.
You shouldn’t forget about your own real life experiences either. Over the years you must have stayed in properties just like yours. What do you remember being good and bad? Use these answers to inform your own business.
Your bed and breakfast business deals with customer expectations, so the most important thing for you is to pass the right message to your customers. You need to formulate how your brand will be defined and how it will be viewed by travellers. Tweak your website so that it speaks the language of your ideal guests. Make it about them, not you. Try not to appeal to everyone, but appeal deeply to your ideal guest. Once you are clear on who you want to serve, then ask them what else they would love to buy from you, and then develop more products and services based on what they want.
The following can be used as a guide to develop your business plan. Consider each of the following points as they apply to your situation.
The time will come, hopefully not too soon, when you may want to sell your bed and breakfast business. However it’s not always as easy as putting a ‘for sale’ sign up.
As you’re preparing to sell, there’s a whole list of tasks you need to do:
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