Starting a Bed and Breakfast – Profitable Business Plan

Owning a property has its own advantages. It is not necessarily meant for self-stay, but you can also convert the same property into a bed and breakfast business with minimal capital and less hassle. It is the easiest way to enter into the hospitality business and acquire hold over the industry. 

However, it should be noted by the prospective owners that the concept of bed and breakfast is changing rapidly and dynamically. Earlier, it used to be a bunk bed or a tiny room to sleep in, followed by a quick morning breakfast. But lately, the bed and breakfast option has transformed as the hospitality industry is pacing quickly. It is no more the usual bed and breakfast thing but a place to socialize and interact with fellow travelers. Due to the pandemic, it has also become a place to work and travel and enjoy social distancing in several ways. 

If you add positive, vibrant vibes to this place, you can earn more clients and revenue in the long run. If you think that a simple bed and breakfast business does not need much planning and attention, you are wrong. Do not underestimate the magic of a bed and breakfast business and the way it can transform your life. 

Hence, we have added a bed and breakfast business plan template for your reference:-

B&B Industry Overview 

You need to know that there are more than 17,000 bed and breakfast businesses in the US, and this number is increasing. Most of the bed and breakfast options provide overnight stay and a breakfast facility but do not have lunch or other meal facilities. Instead, they might try to arrange events, musical shows, drinks, games in the evening. They even offer Wi-fi internet facilities and other benefits such as a swimming pool or a tiny conference room for meetings, but all of them are charged separately. 

In the United States, bed and breakfasts are mostly operated by families and not by individuals. Hence, they don’t have to hire staff as they can manage all the cleaning and cooking stuff by themselves. 

When it comes to the advertising of bed and breakfasts, the internet is the swing king. In a 2001 CNNMoney online survey, it was found that 40 percent of the customers were acquainted with a bed and breakfast option through the internet. Hence, this is evident that you need to portray a visible internet presence. 

Due to the pandemic situation, bed and breakfasts have started providing long-term stay options with work-related facilities such as internet access, conference and meeting rooms, meal delivery services, and data ports. Even if there are plenty of bed and breakfasts in an area, the demand for these options increases day by day. 

Executive Summary 

  1. Naming bed and breakfast could be as simple as your family name or a specific name such as -Riverside Cottages or The Green Homes. 
  2. Location – Obviously, the location needs to be in the countryside where the travelers would feel the urge to visit a natural beauty or a waterfall. However, note that your bed and breakfast is not in the extreme vicinity as it might affect commute and internet access. 
  3. Business operation – Run by your family. 
  4. Facilities available to the guests – self-service laundry facility (a well-equipped washing machine), Wi-Fi, a gym, and a small conference room. Of course, lodging and breakfast will be provided by your business. Meal delivery services will be available for the guests who will prefer long-term stays. 

Products and Services 

High-quality services will be available at this bed and breakfast facility: 

  • Lodging (for overnight and long-term stays as well). 
  • Breakfast (Simple breakfast options such as porridge, cereal, milk, tea, coffee, fruit juices, etc.)
  • A small yet well-equipped gym or space for yoga. 
  • Drinks (alcoholic as well as non-alcoholic drinks). 
  • Laundry room (consisting of a washing machine and detergents). 
  • Small conference room to conduct meetings virtually and in person. 

Mission and Vision Statement 

  • Mission – To start a bed and breakfast lodging facility for guests coming from all regions and aim for 90 percent occupancy in the year by providing excellent customer service and full-fledged facilities. 
  • Vision – To create a reputed brand in the bed and breakfast industry in the whole region of New Jersey (or San Francisco) with values such as customer service, quality, integrity, and safety to the travelers. 

Business Structure 

Since this is a family-run business, you won’t need to specifically hire staff to take care of administrative and other decision-making tasks as you can do it by yourself. But if you have a larger number of rooms and do not wish to do the cleaning stuff yourself, you can hire relevant staff to handle the repetitive tasks. 

  1. CEO – To guide how the business should be operated efficiently. 
  2. Manager – To evaluate and monitor the daily activities of the bed and breakfast facility. 
  3. HR Manager – To hire, retain staff and take care of the administrative tasks of the business. 
  4. Accountant – To oversee the accounting functions of a business. 
  5. Facility Manager – To look after the building maintenance activities. 
  6. Marketing Officer – To target customers, handle business research and identity, and tap business opportunities in the future. 
  7. Cleaners – To clean the premises, handle laundry and check the existing stock of toiletries. 
  8. Security Officer – To secure the facility continuously with the right measures. 

SWOT Analysis 

Though your bed and breakfast must be of only 4 beds, you need to understand the future dynamics of your business right now in the planning stage. 

  • Strengths – The location is perfect as it is not too far to travel and not too near to the city’s hustle and bustle. As the family is involved in the business, customer service is the topmost priority, and nothing is overlooked. 
  • Weaknesses – Since it is a new business, publicity and advertising is a huge concern. 
  • Opportunities – It is well-connected, and hence, travelers won’t find a problem reaching there. As other bed and breakfast lodging facilities are not available nearby, you enjoy a monopoly. 
  • Threats – Changes in government policies, entry of competitors or new stay options, economic downturn are a few threats that can affect your business. 

Market Analysis 

Truth be told, it is challenging to have 90 percent occupancy throughout the year because travelers visit the countryside only during the summer and holiday seasons. Another aspect that bothers the owners of a bed and breakfast facility is security. Since unknown travelers would be living under the same roof like that of the owners, it is a considerable concern. 

Hence, to overcome these two issues, you have to research other lodging facilities and check out how they perform a particular business. For instance, providing long-term stay discounts and adding internet facilities attracts digital nomads and travelers staying in the countryside for an extended duration. The next problem of security can be overcome by appointing a security officer to take care of the premises 24/7. You can also incorporate technological equipment to handle security concerns. 

The target audience includes local tourists, travelers, students, working-class people, digital nomads, families, celebrities, international tourists, migrants, event organizers, and organizations. 

Sales Forecast and Sales Strategy 

The prime location and deep concern for customer service can help you to set better sales goals. The sales projections can be made by going through the other start-ups and facilities in the nearby area. In the first year, it could be $100,000 and can be doubled in the following year. 

Following are a few ideas for marketing and selling the business: 

  1. Advertising the business in travel guides, tourism websites, newspapers, TV, and radio. 
  2. Official website and social media channels. 
  3. Grand opening of the facility. 
  4. Posting ad banners on the highways to grab traveler’s attention. 
  5. Hiring experienced cooks and staff to take care of the premises and ensure customer satisfaction. 
  6. Loyalty plans/Long-term stay discounts and additional facilities to be given.
  7. Participation in roadshows and other events where bed and breakfast facilities advertise or sponsor the event. 

Publicity and Advertising Strategies 

  1. Use word-of-mouth publicity. 
  2. Promoting business online through Google and Facebook ads. 
  3. Sponsoring events. 
  4. Conducting small-scale events and music shows at the facility to attract the audience. 
  5. Installing billboards at proper locations to attract the right audience. 
  6. Distribution of fliers in the relevant areas. 

Pricing

The pricing is not done in excess and should be at par with the type of services provided to the clients. For example, if a guest rents a conference room and avails drinks daily, then suitable charges will be applied. But measures are taken that the prices are not more than what the other bed and breakfasts levy on the guests. 

Service discounts, loyalty plans, and long-term stay discounts are all provided by checking the accounts. All payment options are available to avoid inconvenience on the part of the customers to pay for the services they avail. 

Startup Expenditure 

An average amount of $20,000 is required to start a bed and breakfast business with all the above-mentioned facilities and sales projections. The free rooms in the apartment or the villa are used as bed and breakfast facilities, and hence, this amount does not include the building of the actual premises. Please make a note of the same. 

The above business plan template will be helpful to you during the planning phase.