If you are a frequent traveler, you have probably stayed at a bed and breakfast at least once. You may have enjoyed the experience so much that you have considered opening a bed and breakfast of your own. Perhaps you are tired of corporate life and want to leave the rat race behind you. While owning your own inn can definitely be rewarding, it is hard work just like any other business. Before you rush out to buy the newest bed and breakfast up for sale, take the time to learn all of the steps involved in owning it. A little research now helps reduce the learning curve and ultimately saves you money and frustration.
What Qualifies as a Bed and Breakfast?
An article on the website Entrepreneur describes a bed and breakfast as a cross between a private home and a luxury hotel. Typically, a bed and breakfast is located in a historic home that is owned and managed by one person or family. Depending on the size of the home, there can be up to 10 separate bedrooms. The rooms typically have a theme, such as romance for couples on their honeymoon or nautical for houses by the beach. The owners serve the guests breakfast each morning and often sit down to eat with them. People enjoy the personal touch and the opportunity to feel like a welcome guest in someone’s home.
How Much Money Will You Need to Get Started?
According to New Century Financial, a company that specializes in receivables financing, there are multiple expenses you need to consider when you are considering purchasing a bed and breakfast. Some of these include license fees, improvements to the home, new beds and bedding, kitchen supplies, towels for the bathroom, and unique decorations for each bedroom as well as the dining area. According to the Entrepreneur website, you should plan to spend up to $50,000 for each room if you purchase a larger property and up to $40,000 for smaller properties. Two good sources to research business start-up loan information are the SCORE Foundation and the finance section of the Small Business Administration.
Licensing and Zoning
Every state requires future bed and breakfast owners to apply for a business license stating the name they intend to call the business. Since regulations vary widely by state, you should contact the licensing agency in your state to learn what you must do to apply. The paperwork and fee associated with filing for a business license are minimal. However, the situation can get complicated when the city considers your proposed location with its zoning ordinances. This means that the city’s governing board decides how well your business is likely to fit in with its surroundings. If your request is denied, state your case to someone on the city’s planning commission.
Hiring Help and Pricing Rooms
Even when you live in the home, you can’t serve guests 24 hours a day. You may need help with maintenance, room cleaning, and cooking at a minimum. It’s also important to remember that you need to take vacations yourself occasionally. By going into the venture with a realistic attitude, you can beat the high odds of having your business fail within the first two years. When you’ve done all this and are ready to rent your first room, make sure you research the going rate in your area. You should also base your room rate on the amenities you offer, your location, the season, and the population you expect to serve.
This article was contributed on behalf of New Century Financial, your number one choice when looking for help with your business finances. Check out their website at www.newcenturyfinancial.com