Residential properties are those that serve as single home dwellings and are not intended for business use. Bed and breakfast are commercial properties. Bed and breakfast properties exist mainly with business in mind.
Usually shortened as B&B or BnB, a bed and breakfast is a property that is primarily small and used for lodging.
In most cases, BnBs offer overnight accommodations plus breakfast.
Most of the time, BnBs are private family homes. They usually have about four to eleven rooms. Bed and breakfasts typically have about six rooms on average.
Also, most BnBs have their hosts (or owners) living in the same property.
In the US alone, about 28,000 or more BnBs are operating.
Americans and the Bed and Breakfast Culture.
When Americans travel, many lodgings are available at their disposal.
Tourists can stay in high-rise hotels, rustic resorts, or even motels. Yet, more and more tourists flock to BnBs, the most traditional lodgings in the US over the years.
About two decades ago, there were only about 1,000 BnB properties in existence. As of this writing, it is already at more than 28,000 BnBs all over the country.
You might ask why.
For starters, bed and breakfast properties are usually historic and elegant lodgings. Staying at BnBs can activate a fantasy of living another life.
Most of these BnB properties have period decorations renovated to provide guests with an opportunity to step back in time.
Other BnB properties carry a specific theme.
Also, guests spend the night in peace because of the limited number of rooms within the property.
Most of the time, the BnB hosts (or owners) live within the property.
The hosts cook breakfast. These hosts can also recommend local attractions and help with restaurant reservations.
Most of the time, BnBs can range from about US$100 to US$130 per night, depending on the location.
Some BnB properties are private homes converted into bed and breakfasts. Other BnBs are more serious, complete with websites, contact details, and high-quality photos.
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How do you start bed and breakfast?
Do you sometimes pass by a place so historic you always get lost fantasizing about renovating it into bed and breakfast?
Or do you also imagine yourself waking up early to prepare breakfast for tourists from all corners of the globe?
You could probably start a bed and breakfast business if these are your fantasies. It is profitable, and it is rewarding.
But before you start with your BnB, what do you need?
Here are a few essential things to have.
A Business Plan
When starting up a new business, you need a business plan. A business plan is essential, especially if you plan to get funds through bank loans.
If you’re a newbie in writing a business plan, you can check online for free samples. That should get you started.
However, if you do not need bank loans, do you still need a business plan?
The answer is yes.
A well-written business plan allows you to create a strong foundation for your business. It should keep you up and running. A business plan should let you stay on top of your goals – finances, growth, and the like.
Some BnB owners have a history of selling their old homes to invest in beds and breakfast. Later on, bed and breakfast service as their residence and primary source of income.
If this is not the route you want to take, there are other options.
One option is to find private investors. You can also apply for a loan from a bank. Or you can find other business support programs that can help you with your finances.
But before anything else, it is also essential to know how much you need to get the business up and running.
It is also important to note – is the property BnB-ready or are you converting a property into a BnB?
Know that if you are converting a property into a BnB, you have costs to consider. The prices should cover remodeling, beddings, towels, appliances, and a lot more. Plus, it would be best if you also thought of the maintenance costs.
Yes, you can convert any property into a BnB. But is it worth it?
Check out the location of the property. For a BnB to work, the building should have something unique and attractive to offer.
Spend a lot of time looking before choosing the location.
Most of the time, BnBs lean on a historical angle. This aspect should be enough to entice guests to stay at your place.
For example, a Victorian house can provide the guests with a feel of living in the area in the 17th century. Other BnBs would bank on its proximity to something notable like a tourist destination.
When choosing a location, you may also want to consider zoning by-laws of the state or the province. Ensure that a business license is easily granted for the property at the location you prefer.
It would be best to familiarize yourself with all the BnB regulations in the area. Is it allowed to have multiple rooms and one toilet or bathroom in the place?
There are some important factors you must consider.
One is the local economy.
Will the area draw tourists to keep your BnB alive?
Your property should be in an area that can attract tourists to visit. Otherwise, without the tourists, your BnB will never survive.
Permits and Licenses
Other aspects to consider are permits and licenses. These are documents you need to have.
Permits and licenses go beyond zoning clearances. These licenses include compliance with regulatory requirements in running this type of business.
Getting these licenses would require you to check and comply with regulations required by the Health and Fire Departments. It also covers liquor licenses, if applicable, and a lot more.
Some businesses rely on word of mouth. Other companies work well with a reliable marketing strategy.
You always rely on word of mouth with a bed and breakfast business. And this is, in a way, a travel site review.
It is thus essential to always satisfy your customers because a bad online review can do a lot of damage to your operations.
Keep your website up to date. Make sure to have an email address that is easy to remember. Your contact details should also be on your website.
Always ask for reviews.
Think of special promotions that can benefit your customers. For example, you can partner with a travel agency for guests to offer discounted tours prices. Or you can partner with a spa and provide discounts if guests book a massage through you.
And most important of all, satisfy your customers at all times.
Most BnBs rely on the management of their owners.
Owners usually divide the tasks amongst themselves. And this is the most common arrangement.
But you should also know that managing a BnB can be overwhelming.
For example, preparing breakfast can take up to three hours. Bedrooms and toilets also need some cleaning. Plus, there is the laundry to do.
All of these things mentioned are tasks you need to do regularly. You also have groceries and supply shopping to do.
If you are not prepared to do these things, you might consider hiring staff to help you with the load.
This step is optional. But this can be helpful in case you decide to do so.
What are the responsibilities of a bed and breakfast owner?
As a BnB owner, you should be a jack of all trades. You assign rooms, keep books and records, and provide meals to guests. You will provide information on tourist attractions, spas, and the like. Aside from that, it would help if you also interacted with your guests.
Running a BnB is more than running a hotel.
As an owner, you cook meals (breakfast) for your guests. You also clean up the place, replace linens and towels, and a lot more.
Some owners also do everything needed at the property unless they hire a staff to help them.
As the owner, you need to do everything.
You set up reservations and finally check-in guests.
As an innkeeper, you also answer questions. You also receive and resolve complaints.
Of course, you also need to cook breakfast for your guests. Aside from cooking and maintaining your property, you need also to enforce your rules.
A Business Manager
Aside from being an innkeeper, managing your bed and breakfast’s finances and administrative aspects would be best.
These tasks should include client files, paying taxes bills, and setting prices for your services.
In addition, you should also make sure to maintain a marketing plan to ensure a continuous flow of guests to your bed and breakfast.
And finally, you need to ensure compliance with your area’s set rules and regulations.
This compliance should include maintaining standards in food and service licenses. It should also have property insurance and adherence to other requirements like fire regulations.
Plus, if you have employees, you need to ensure you pay them correctly.
As the bed and breakfast owner, you also live on the property.
You will set your working hours.
For example, you get to set when you start cooking breakfast in the morning. You also get to decide on the time guests can check-in.
However, there will be times when guests need your assistance at the wee hours of the morning.
Expect to get requests from guests any time of the day.
Also, you will be working holidays and weekends.
No formal education or work experience is needed to own and run bed and breakfast. But you need to know basic bookkeeping at least. You also need to have basic knowledge of financial statements.
As the owner, you need to be as organized as possible.
Another key characteristic is to be patient. You also need to be a people person and should be able to communicate with your guests well.
A certain level of customer service is also needed.
As the owner, you need to understand that a bed and breakfast should profit.
Your income is relative to the number of rooms that you can rent. Your rates will also have an impact on your income. The same is true with expenses and overhead costs.
However, you have to understand that you may not have enough income yet as you start.
Are bed and breakfast a good investment?
Opening a BnB is a perfect business opportunity. You have to be ready to invest and sacrifice the needed time and money. You may not make money ASAP. But in two to three years, you will see the fruits of your labor.
One might think of BnB owners leisurely spending time serving breakfast and chatting with guests. But it is not.
In reality, BnB owners have hectic days.
Owners have to attend to guests, manage websites and social media accounts and do other things like bookkeeping and the like. The list of tasks can go on for miles.
But when the BnB becomes successful, all the investments are worth it.
For BnB owners, the earnings can depend on many factors. These factors include the location, your capital, and the uniqueness of your BnB.
If you plan on putting up a BnB, here are a few things to know.
It is a Full-Time Job
Owning and running a BnB is something you cannot do on the sides.
A BnB is something that needs your focus.
Sure, you can earn your dollars every time a guest checks in at your property. But your goal is to make sure these guests return in the future. Your goal is to ensure your guests have a great time and talk about it online or offline.
And for you to achieve this, you have to focus your attention on making sure the guests have a satisfactory stay at your property.
Not only should you check them in. You also need to ensure the guests sleep well and have access to everything your area offers.
You will be the plumber when their faucets leak. You will change light bulbs when their bulbs fail to work. You will serve as the source of information for tourist destinations.
You will attend to everything your guests need.
And this is something only a full-time job requires.
Before setting up your bed and breakfast, try volunteering in other BnBs.
You will get a feel of how it is working for a BnB. You will also have a sense of what you need to do to keep things running.
An Existing BnB
Once you decide that a BnB is your thing, you can buy an existing BnB.
This option is when you think you no longer want to start from scratch.
With this step in mind, you already have an existing set of clients. There is no need to apply for licenses. Besides, whatever renovation you do will not be that much.
Spending for your BnB does not end as soon as you open and accept guests.
Be ready to spend.
You will see parts that need repairs and improvements. Be proactive in dealing with these repairs.
Every improvement you add to the property is an improvement your guests will appreciate. It should also ensure satisfaction, thus, bringing money in faster.
BnB and You
As long as you are ready to invest and sacrifice your time and money, bed and breakfast will suit you well.
It would be best to realize that you will not make money right away.
But if you love dealing with people, being an owner of a BnB might be your best bet.
Would you open a BnB in your area?