How to start a bed and breakfast business
Snapshot
Running a B&B is a bit like having a new baby - lots of
early mornings and laundry, a seriously diminished social life and
the constant need for energy. But if you love caring for people,
don't mind having strangers sharing your living space and are
always able to give service with a smile, it's all worth it. Your
biggest outlay will be on the premises - either buying an existing
B&B or adding lots of en-suites to your home. Top earners can
hit £100,00 a year, but the lower rungs are anything from
loss-making upwards once the financial pressure of a big mortgage
has been chucked in.
Day-to-day
You might be working within the comfort of your own home, but
running a bed and breakfast is no easy feat. Expect very early
mornings (everything has to be ready for when guests wake up) and
say goodbye to weekends and most ventures out (as someone always
has to be on-hand should a guest need you).
Day-to-day activities will be repetitive: having to undertake
the same tasks you did yesterday, with the knowledge they'll have
to be done again tomorrow. Cleaning rooms, making breakfast, doing
laundry, repairing broken fixtures, greeting or saying goodbye to
guests, and keeping strict accounts are all part of running a
B&B.
The personal touch is what draws people to B&Bs, and things
like learning guests' names and advising them on what to do during
their stay are really important.
Above all, your job is to make sure guests enjoy themselves and
want to come back again, or at least recommend to others.
The industry and market
The UK tourism industry is one of the largest in the world,
comprising of around 180,000 businesses, employing 1.4 million
people, and generating £19bn per year in foreign revenue.
The B&B sector turns over £2bn per year, making it 28%
bigger than the low-cost hotel sector, and 35% of the size of the
UK hotel sector.
The best B&Bs provide everything tourists look for:
small-scale, high-quality accommodation with one-on-one personal
service. This is an incredibly competitive industry, and you'll
have to work hard to make your business the most desirable to
potential guests.
Natural skills
- Really enjoy being surrounded by new people - to the extent
you're unphased by having strangers in your home every day.
- Great customer care skills, and always happy to go the extra
mile. Enjoy looking after others.
- Enjoy cooking.
- Keen cleaner and tidier.
- Be good and handiwork and DIY, or have someone close to you who
is who won't mind doing you constant favours!
Training
There are no set-in-stone qualifications required, but it's
advisable you research this type of business thoroughly before
starting up.
Several companies offer training programs for people aiming to
open their own B&B:
- The Bed and Breakfast Academy offers a course on
how to set up, market, and run a successful B&B. It charges
£250 for two days, and recommends that each person involved in
running the business attend with you.
- For those with a smaller budget, BandBtraining offers an eBook on a variety of
topics for people aiming to start a B&B for £25.
- Definitely sign up to training on food hygiene standards,
particularly if you're going to run a large business, as you'll be
inspected by the council at some point and yu don't want to be
responsible for upset tummies.
Premises
Are you going to buy an established business, purchase and
customise a new building, or renovate your existing home? Each
option has its advantages, but buying an established business is
usually the most hassle-free. It will cost more to purchase, but
will already have a client base and so need little spent on
marketing or renovation. It will also be easier to get finance from
the bank if you can prove the business is successful.
If you decide to purchase a house and build the business from
scratch, consider the size carefully. If you want a four bedroom
B&B, you'll need a house with around six bedrooms so you and
your family can live comfortably. Ideally you'll have your own
private living room to give you a break from the guests. This is
important for your business too, because guests will feel
uncomfortable if they have to share space with your family.
Your premises will be furnished differently depending on how you
market your business. Are you a value-for-money getaway, or a
luxurious retreat? If you market your B&B as a quiet, relaxing
hideaway, then a television in each room won't be necessary. If,
however, you want to create a luxurious home-from-home, you'll need
all the mod cons. Whatever your choice, make it clear on your
advertisements what you offer.
If starting your B&B from scratch, remember that most guests
expect a private bathroom, so you'll need to buy somewhere with
multiple en-suites, or get these installed in whatever property
you're using. Make sure you have sufficient parking spaces nearby
and are well positioned for guests to visit local attractions.
Avoid noisy roads, too, but not so much that guests would be scared
to walk back alone at night.
Of course, as soon as you look at buying a property, you need to
be thinking about mortgages. This can get complex when you're
mixing residential and business premises - this article gives a good run-down of the basic
considerations.
Staff
- You'll usually require staff if your B&B has anything more
than four guest rooms.
- Staff need to be able to take on a variety of roles: cleaning,
greeting guests, basic cooking, and so on. Ideally, your employees
should be able to do everything you can do, to allow you some time
away from the business.
- All staff must have excellent customer service skills, because
the happier your guests are, the more likely they are to refer you
to their friends. This is an important way to get bookings in the
tourism industry.
Money
- The bigger your business, the larger the property you'll need.
More rooms may mean more guests, but they also mean more
furnishing, more utility bills, and more staff.
- The cost of buying either an existing B&B or a large
property varies hugely depending on size, location, how the market
is doing, how long the property has been for sale, and so on -
anything from £50,000 - £5m.
- Look at sites like http://www.hotelstobuy.co.uk/ and
http://www.businessesforsale.com/talktalk/search/Guest-Houses-and-Bed-and-Breakfast-Businesses-for-sale
.
- Established B&Bs in sought-after areas don't stay on the
market for long: in fact many receive offers before they're even
advertised!
- It's because of this that some experts recommend selling your
home before searching for a business. If needs be, stay with family
or live in rented accommodation until you find your new business,
otherwise you could miss out because the sale of your property took
too long.
- A bank can provide around 70% of the purchase price for your
new property, if you have a normal credit rating.
- You'll need roughly 30% of the purchase price again for the
ongoing costs,.
- Expect to pay 5% of the purchase price to cover fees, stock,
stamp purchase, business valuation and admin fees.
- The cost of furnishing your business will vary depending on how
you aim to market it - a simple B&B won't be outrageously
expensive. It's the en-suites that will really bite into your
budget.
- Accurate records must be kept of all outgoings for when the
time comes to pay tax.
- Get an accountant. They can keep an eye on spending and help
you avoid any nasty surprises.
- A chunk of your initial funds will go on insurance, and you
will need most of the following:
- Buildings cover
- Contents cover
- Public liability - covers you for civil actions brought by
guests who sustain injury on your property
- Employee liability
- Cancellation insurance - in case guests cancel at the last
moment
- Personal accident, health, and key person insurance - in case
you're incapacitated at an important time
- Motor insurance for business use
- Here are a few companies that offer insurance specifically for
B&Bs (links lead to relevant bits of the website):
First steps
- Figure out if there would actually be enough guests in your
desired area to sustain the business throughout the year. Visit
your local Chamber of Commerce, local council and tourist
information office to get important tourism information: how many
visit the area, the types of attractions they visit, whether
tourism is seasonal etc.
- Also consider how many travelling businessmen and women spend
the night in your area. They will be valuable guests through the
'slow season'.
- Vigorously assess your competition and how you will beat it.
Google searching is a great start - will you appear on the first
page of search listings for your area? This is key.
- Talk to your band manager early on about loans and
mortgages.
- Look at property prices in your desired areas.
- Stay in B&Bs in your chosen area to get an idea of how the
business is run. You can see how they're decorated, what the house
rules are, what you're charged - and how to out-do them.
- Read plenty of books and articles from people who've been there
and done it to make sure this is the right choice for you. It's a
big commitment, more so than many other types of business because
of the big property expenditure, and you need to be sure.
Tips
- Get food and safety standard accreditations.
- Get listed on Trip Advisor - ask guests you get on with if
they'll recommend you on it.
- Make yourself known to local tourist offices and websites
listing B&Bs in your area.
- Put yourself up for as many awards as you can - read this
feature for advice on how to stand the best chance of winning:
/advice/sales-and-marketing/pr/how-to-win-awards
- Give a decent, hearty breakfast. Offer yoghurt, fruit and
muesli as well as the full English.
- Try adding a few locally-sourced ingredients to your breakfast
menu - particularly if you're in the countryside. These days guests
eat that up - literally.
- Have a guest book and encourage guests to sign it, then add the
most shining comments to your website.
- Make sure your website is geared up with all the SEO you need
to get found online - this is where the vast majority of guests
start their search for accommodation.
- Leave chocolates on guests' pillows - a small touch, but one
that always brings a smile to a guest's face!
- Have a leaflet counter full of brochures of things to do in the
area during their stay, and give guests maps.
- Show as many photos of rooms on your website as possible.
- Provide very clear instructions for how to find you for all
main modes of transport (road, air, train, etc) and give a number
the guest can call should they get lost.
- Have mini-bars and small fridges in rooms fully stocked and
with price cards - these are great profit-makers.
- Casually ask guests why they're staying with you (business,
pleasure, a specific nearby attraction) and record results so you
can tailor your advertising in future.
- Have a protocol in place for what you'll do if a guest gets
locked out late-night or loses their key.
- Always offer to carry luggage.
- Make recommendations for the best bits of the locality. Know
your local area inside out!
- Make sure guests are familiar with your terms and conditions
and cancellation policies (it's standard for guests to have to give
24 or 48 hours notice to entitle them to a refund).
Common pitfalls
- You need to budget incredibly carefully to see yourself through
the off-peak season. Consult your accountant and save as much as
possible after your first summer. Market to business travellers who
might still need accommodation throughout winter, and offer decent
discounts for off-peak visitors.
- Mortgage payments make things complicated. See what we mean here.
- Guests running off without paying can hit you hard. Take
passports, credit card numbers or other form of ID at the beginning
of a stay to avoid it.
- You need to have a protocol in place for rude guests who stay
up later making lots of noise, and disturbing other guests. Find a
way to handle them without insulting them.
- Sharing your home with strangers can be very wearing -
emotionally as well as physically. Give yourself plenty of time
away from the house when you can, and find time to enjoy the
company of your partner, if you're working with one, away from the
business.
- Laundry and electricity bills will creep up on you. Talk to
non-competitor B&Bs (perhaps in other parts of the UK) who are
roughly the same size as you to make estimates.
- Think ahead. If you're planning on having children (or more
children!) in the next few years, you'll need to make sure you have
rooms ready for them in the property you purchase now - even if
those rooms won't be used for a few years.
- Competition can be killer in top tourist destinations. How will
you market yourself to get heard over other B&Bs? How will you
differentiate and find a competitive edge?
Support and resources
Use what's out there to help you. Software like Smarta Business Builder
will make it easier to keep track of all aspects of your business.
Other resources include:
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