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How to Start a Bed-and-Breakfast Business
Introduction
Bed and Breakfast is an exciting new "down-home" kind of business springing up among homeowners
all across the country. If being domestic is your thing, considering a bed and breakfast business
might be in your favor. All it takes is a spare bedroom, a flair for cooking, an outgoing personality
and a true enjoyment of tending to the comforts of others -- and you could be happy and successful
with a bed and breakfast inn business.
Bed and breakfast inns continue to spring up all over the country, and the
number is rising. In 1975, there were only 400 bed and breakfast inns in the United States.
That number is over 15,000 today. The Professional Association of Innkeepers International
foresees a doubling of bed and breakfast inns in the next century.
Basically, bed and breakfast is a transplant of European hospitality, adapted and refined to the
American way of doing things. This growing trend services a type of customer who travels but wants
a change of pace from the traditional hotel stay. It might be the corporate traveler, who may
prefer the bed and breakfast inn to a hotel when it is convenient to their destination. For
leisure travelers, the bed and breakfast inn may be the destination in and of itself when located
near a popular or desirable vacation spot.
What a bed and breakfast inn offers customers is a homey, cozy atmosphere at typically the same or
slightly lower cost as a comparable hotel. Prices per night could range from a low of $25 to $100
or more. The basic appeal of a Bed and Breakfast Inn for travelers and tourists alike is the fact
that it is a quiet "home-style" place to stay. Generally, they enjoy visiting with the people off
the superhighway and want to get away from the sterilized atmosphere and sameness of hotels and
motels. Instead of hallways of rooms cloned with the same layout and design of bedspreads, wallpaper
curtains, fixtures, and carpeting, guests of bed and breakfast inns can expect to get a good night's
sleep in a room with a variety of make-up and design much more like their own beloved bedrooms. Add
to that the other elements that make it feel like home - dining room, kitchen, sitting or living room,
and some good home cooking - and it's not hard to see why bed and breakfasts are an appealing choice
of travel accommodations.
If you have an extra bedroom, a large home or extra space in your farmhouse, you have the necessary
beginnings to start making extra income as a Bed and Breakfast Inn. One of the beautiful aspects of
this idea is that so long as you're hosting "over night visitors" on a small scale, no licenses will
be required. It's always best, however, to check with your local authorities
just to be sure.
Naturally, your "visitors" will expect a clean, neat and comfortable home. So assuming that your home
meets these prerequisites, and you have a spare bedroom, simply "doll it up" a bit. Make sure it's
painted brightly, there's an outside window, lots of room, closet space and bureau, and perhaps a
small writing desk, and a large comfortable bed, or twin beds.
Keys to success
Two things are key to a successful bed and breakfast inn -- location and number of rooms.
Profitability is directly tied to occupancy rate, and so the more desirable the area is for
vacationers, or the closer it is to an urban area which draws regular business travelers, the greater
the chances for making money. In any case, a bed and breakfast with four or fewer guest rooms will
have a more difficult time being profitable, a according to the Professional Association of
Innkeepers.
Given a good location and adequate number of rooms, your ability to provide the ultimate in
hospitality will be a powerful marketing factor in your bed and breakfast business. Being friendly
to all types of guests at all times and responding to their needs - even demanding ones -
is essential. Also, cooking home-cooked meals, and keeping things neat, fresh, and orderly are
prerequisites for repeat customers.
And with word of mouth advertising so important in a service business like this, providing the extra
touches, like turning the beds down or fresh flowers in the rooms, is another smart marketing tool.
It's the little, unexpected things that will pleasantly surprise your guests and etch permanent
memories in the minds of these customers.
And finally, bed and breakfast inn owners need to be prepared to do the things they normally do at
home anyway - be flexible to sudden changes, ready to generate an alternative plan, and respond calmly
and quickly to crisis.
To make your service more special, you can offer visitors, particularly foreigners, a "quick tour"
of the interesting sights in your area. However, as your popularity as a B & B Host grows, you'll
find that a lot of local tourists and business people on the road will begin availing themselves of
your hospitality. If your visitors are already familiar with the area, you may wish to devise new
strategies to highlight the unique features of the place.
Now, suppose you're organized and ready to receive your first customers. You greet them as host or
hostess and offer to assist them in getting situated in the room or rooms you have for them.
If they'd like to take a drive around your area and see the points of interest, you do that.
And then in the morning, serve them a big, delicious breakfast.
You'll probably find that foreign visitors will want to stay several days. With most people of
this country who are just traveling through your area, it'll be a one-night stopover. Whatever,
if they want to sleep comfortably through the night, eat breakfast and be on their way, so be it.
If they want to sit around after breakfast and plan an itinerary for a complete visit of your area,
your assistance and help will be greatly appreciated. (Remember those recommendations)!
That's it! The complete how and why of this tremendously profitable business that's becoming more
and more popular. It's called Bed & Breakfast, and it's very definitely a low investment idea.
And you can parlay it into a very interesting and comfort able income producing business - all from
the comforts of your own home!
Start-up-costs
The personal pay back for providing the ultimate bed and breakfast experience can be
very satisfying. Bed and breakfast inn owners have the opportunity to live in a desirable
location and spend the majority of their time in the home that they have worked so hard to
decorate and maintain. They can have their children at home; children can also become involved
in the business. They have the opportunity to meet all kinds of interesting people from around
the United States and possibly the world. And the expenses of running a home become tax deductible,
i.e., cleaning supplies, car expenses, insurance,
eating out, magazines, travel.
The obligations for these benefits, however, are the fact that you need to be at home all day seven
days a week, with a telephone nearby at all times. Any time away, like a day off or a vacation,
needs to be well planned with a highly reliable replacement hired.
40,000 per room in renovation costs of your existing home. If you're buying a home to convert into
a bed and breakfast inn, the costs may be as high as $70,000 per room, again depending on where in
the country your business is located.
Room rates will also vary due to geographic location. According to the Professional Association of
Innkeepers International, the standard rate ranges from $100 to $120 per night in the northeast and
west. In the Midwest and south, rates are in the low $90's. Corporate rates are typically about
20-25% of the standard rate.
As mentioned earlier, occupancy rates will be key to profitability. Average occupancy rates
nationally are at about 38%, with as high as 66% in the west, 51% in the northeast, and 45% in the
south. Rural areas are at about 45% and urban areas at about 65%.
With these figures, the Professional Association of Innkeepers International averages three possible
income scenarios for potential bed and breakfast inn owners to consider; 1-4 rooms at a 44 percent
occupancy rate will generate a gross income of approximately $42,000 for a net loss of $8,000; 5-8
rooms at a 46 percent occupancy rate will generate a gross income of approximately $111,000 for a net
profit of $12,000; 9-12 rooms at a 51 percent occupancy rate will generate a gross income of
approximately $245,000 for a net profit of $63,000. Keep in mind that some states require bed and
breakfast inns with more than six rooms to adhere to the state's hotel laws.
Marketing your business
If becoming a bed and breakfast inn owner is for you, begin by getting your business listed in as
many travel and guidebooks as possible. Make contact with local travel and reservation agents and
become a part of their regular referrals. For their services, they will expect between a 10 and
35 percent commission off your room rate.
Most people will either write to you ahead of time, inquiring about the possibilities of staying at
your home while in your town or city. This means a bit of advertising on your part, or listing your
availability with a B & B broker. Some people will check the local telephone listings, and the
newspaper advertisements when they arrive in a strange town. And some people will just be driving
across the country, come to a town or city they think is interesting, and start driving through the
residential areas looking for Bed and Breakfast Inns.
Thus, you should have a small sign posted either in your front yard or on the front of your house.
This sign needn't be much more than about two feet wide by about ten inches deep. It need only state
BED AND BREAKFAST - Inquire Within or Call 123-4567.
For newspaper advertising, a similar listing in the personal column of your local paper, particularly
on Thursdays, Fridays and Saturdays, will be all you'll need. But when it comes to the yellow pages
of your telephone and business directories, go with a small display ad that describes in greater
detail the comforts and pleasures of your services.
Be sure to list your services with all the travel agencies in your area. A brochure or a short
synopsis of what you offer will most assuredly give the travel agents an idea for steering visitors
your way. At the same time, listing your services in a number of national travel magazines -
particularly those that cater to women - will bring customers in for you.
Listing your services with a broker usually won't cost you anything up front, but they will expect a
certain percentage - usually about 25% of the total bill. This same arrangement applies with travel
agents.
Advertising in travel magazines and special sections of newspapers and other periodicals regularly
will also support your goal of a steady stream of customers. And look for public relations
opportunities as well, like feature stories on television and in print geared for a vacationing
audience or some related topic. Get in the habit of sending our press releases to your local media.
It may lead to valuable and inexpensive visibility.
Finally, with word of mouth advertising being so important to a hospitality business such as this,
the more you do to delight your customer while they are within the walls of your inn, the bigger your
marketing army. If your customers have a special experience, you can bet they'll tell everyone at
work as well as all their friends and families about it. And keep in touch with them.
You can solicit their repeat business through regular mailings offering special discounts and
promoting special events in your community that they will want to attend.
Being a bed and breakfast inn owner is much more than just keeping a neat house. It's a career
loaded with variety and challenges -from the tasks of running a business to planning and implementing
marketing to personally providing a full array of hospitality services. Whereas hotels have a staff
of people performing duties in just one of these areas, you get the opportunity to direct the entire
operation . . . and all from the comfort of your own home!
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