How to start a bed and breakfast business

How to Start a Bed and Breakfast Business

Owning and operating a bed and breakfast can be extremely profitable under the right circumstances. If you are looking to start a new business venture or investing in property, you might find that opening a bed and breakfast is just the thing you need. 

However, B&Bs aren’t for everyone. They tend to take a little more dedication and hospitality than average vacation rental homes typically require. Is running a B&B a good fit for you?

What is a Bed and Breakfast?

how to start a bed and breakfast business

A B&B is very unique from typical hotels or vacation rental homes. Usually, they are set in large, historic homes. However, they can also be found in lighthouses, high-rises, farms, and newer homes. 

As the name implies, a bed and breakfast offer the guests a room to sleep in and a home-cooked breakfast to enjoy in the morning. 

Bed and breakfast establishments usually only have between 4 and 10 guest rooms. The owner or manager lives on-site with the travelers and interacts daily with them, giving the feeling that they are invited guests in a private home. 

Is Opening a Bed and Breakfast Right For Me?

There are many more factors involved in running a B&B than in owning a nightly or weekly rental home. For example, you can host your guests with typical rental homes without interacting with them one on one, thanks to the internet. Just tell them how to access the keys and direct them to your welcome letter or handbook, and they’re good to go on their own. 

B&Bs, on the other hand, require that you give your guest much more attention. In fact, you will most likely live on the site and be in contact with guests every day. Not only will you handle the booking, but you will also be responsible for providing breakfasts and cleaning rooms

A bed and breakfast owner must be personable and outgoing, always ready to meet new people and welcome them into their homes. It is not your typical nine to five gig. The constant flow of new guests will keep you busy day in and day out. Consider the following traits when determining whether opening a bed and breakfast is right for you:

  1. Do you have a knack for starting conversations and making people feel at ease?
  2. Can you balance entertaining your guests and giving your guests space to enjoy their vacation?
  3. Are you and your family members comfortable having strangers in your home on a weekly and possibly daily basis?
  4. Can you maintain professionalism when guests are demanding or complaintive?
  5. Will being available to your customers 24/7 put a strain on your other relationships?

How to Start a Bed and Breakfast

If you’ve decided that this fast-paced, ever-changing job description is right for you, you may be wondering how to start a bed and breakfast business. Truthfully, there are many factors to take into account before opening a bed and breakfast. 

Here are just a few things you should consider before buying a rental property for your B&B business:

1. Location

run a bed and breakfast business

Before converting your home or buying a property with hopes of it becoming a B&B, you’ll want to consider the location. Are there nearby attractions that will entice guests to stay with you? Is there a high demand for nightly stays in the area? What kind of clientele will your property attract? 

2. Condition

How much work will need to be put into the house to make it a viable option for guests? If you buy a Victorian-era home, for example, how well has it been kept up? Will a remodel or extreme renovations be needed to make the space livable and inviting? Before investing, make sure you add up the cost of the alternations you’ll need to make on the house. 

3. Investment

Do your research. Look at similar properties in surrounding areas so you can be sure whether or not you’re getting a good deal. Knowing the market well will give you the power to buy with confidence. 

You need to estimate the costs of running a bed and breakfast before you buy the property. Have you considered how you will finance your new business? Ask yourself the following questions before going any further. 

  • What kind of loan or mortgage will I need? 
  • How high of monthly payments can I afford?
  • What will the renovation cost? 
  • How much will I be able to set aside for furniture and other amenities?
  • Will I be able to afford additional expenses such as cleaning, repairs, and maintenance?
  • Have I considered the cost of marketing and OTA fees?

Something commonly overlooked is the costs of taxes and licenses. You also want to make sure you have plenty of financial leeway in case of emergencies or other expenses you didn’t anticipate. 

4. Legalities

Transforming your home space into a business space will require applying to make these changes with the Local Planning Committee. Other necessary legal steps could include updating your home insurance, obtaining a food safety handling permit, enforcing local smoking regulations, or getting a license to sell alcohol depending on your national and local laws.

legalities of bed and breakfast business

It’s vital to secure a license before you begin operating a bed and breakfast. For starters, you will need a general business license as required by your local government. Depending on your state or country’s regulations, you may also need to prove that your primary residence is at a different address. 

As with any business, taxes are inevitable. Paying your taxes is just as important as getting a license to run your business. Thankfully, there are several items you can count as deductible expenses. Keep track of these things throughout the year and include them when you file your taxes. 

Because requirements vary from location to location, it is best to check your local laws and, if at all possible, speak with an attorney. They will verify that you have all the correct documentation you need to run your bed and breakfast legally. 

5. Bed and Breakfast Business Plan

Having a written business plan is essential to profiting from your bed and breakfast. The essentials to your business plan include:

  • Initial Cost (includes property price, renovations, furniture, linens, etc.)
  • Cost of operation (includes utilities, cable, WIFI, etc.)
  • Employees and payroll (what tasks you are willing to hire for and how much you’re ready to pay)
  • Room price per night
  • Estimated monthly income
  • Marketing and advertising (includes the price of posting on vacation rental platforms)

With a bed and breakfast business plan in place, you will be able to make crucial decisions quickly and easily based on the rules and frameworks you already have. 

Nothing will be more beneficial to you to identify risks before you invest than having a viable business plan. Creating one will help you define your business strategies in the opening stages of your business and the future. You can refer back to that plan anytime you need to make a decision, and it will ensure you’re headed in the right direction. 

The best way to know if investing in a B&B will be worthwhile is to create a business plan before you purchase the property. 

How to Run a Bed and Breakfast

Running a bed and breakfast business

Now that you’ve decided to open the doors to your B&B, it’s time to understand the business’s daily operation. 

As the owner, you will be in charge of various tasks that will keep your B&B thriving. Apart from the basics of cooking breakfast for your guests and directing them to nearby attractions, there are things you might not have considered. Some of these tasks include marketing, making bookings, checking guests in and out, adjusting your services until they run smoothly, maintaining a strong relationship with your clients, budgeting, and much more. 

Don’t worry, though! It seems like a lot, but we have tips to help you juggle it all!

Another essential feature of a successful B&B is choosing a theme or decor that is inviting to your guests. Many B&Bs opt to decorate based on the surrounding area. For example, a B&B located in a lighthouse will most likely follow a nautical theme throughout the home. 

You don’t have to decorate by theme, but if you choose not to, your decor and furniture should be comfortable, inviting, and aesthetically pleasing. It could make all the difference in whether a guest chooses you or the competition. 

Opening a Bed and Breakfast: Biggest Mistakes to Avoid

Before opening your doors, you want to make sure you haven’t made any of the following mistakes. One or more of these rookie B&B mistakes could cause you to go out of business before it even takes off. 

Using the Wrong Software

The best way to show off your B&B is to have a professional and optimized website. Building a website can be overwhelming, though. That’s why working with the right software, like Lodgify, is an excellent place for homeowners to get started. There you can create your website without having a degree in computer programming. Once you’ve chosen your website template, it’s easy to manage bookings, accept online payments, and communicate with guests. 

If you choose to list your B&B on several websites, such as HomeAway, Airbnb, and, Lodgify will automatically sync your calendar. You won’t have to change all calendars each time there is a booking manually. Lodgify’s channel manager allows you to only focus on one calendar while never having to worry about overbooking. It is a must-have if you are listing your property on several rental sites. 

Not Understanding Your Market

You have to understand what customers who are visiting the area are looking for in a B&B. If you don’t know the nearby attractions or your demographic, chances are you’ll have a lot more trouble booking rooms. 

Being Too Generous

Yes, people like feeling like they are invited guests into your home, and as their gracious host, you will have to resist the urge to bend over backward for them. Remember that ultimately this is a business. If you prefer to go the extra mile in hospitality, your rates need to show that. 

Not Hiring Employees

start a bed and breakfast business

You will wear yourself extremely thin if you are trying to handle the cooking, cleaning, entertaining, booking, and bookkeeping all on your own. Pick a few tasks that would be better to turn over to employees. 

Not Doing Enough Research

The best way to know what guests expect from your establishment is to research the competition. Take note of what similar vacation rentals or hotels offer. Read reviews from customers. Learn from other’s success as well as their failings. 

Forgetting to Write Out Policies

You will lose money and good reviews if you have to pay out of pocket for damaged goods or if certain guests are disturbing other guests. Having rules protects you and your paying customers. 

Opening Before You’re Ready

Don’t rush into things. Make sure you have everything in place before you start accepting bookings. Things are always a little rough at the start, but you can eliminate many headaches by planning. 

Being Like Everyone Else

A B&B is an excellent opportunity to reflect your personality and style and stand out from the vacation rental and hotel crowd. Don’t be generic. Find what makes it unique and run with it. 

What to take away

There are many factors to consider before jumping into the B&B business experience. It can be a rewarding business venture with considerable profit potential, but diligent research and planning are essential to success. 

Owning your own business comes with a lot of responsibility. However, you will enjoy being part of a unique aspect of the hospitality industry. B&Bs are by far the most personalized and customized vacation rental options available to guests. 

Running a bed and breakfast can be a fun and rewarding business venture. It gives you the chance to connect with guests from around the world without having to leave your home. Operating a B&B can also be an excellent investment and can give you the freedom of running your own business. 

With the right drive and personality, you can successfully run your B&B. Just be sure to follow the tips above and don’t cut corners. A little extra work now will make all the difference in the fate of your B&B.

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