by constructaquote - 22 June 2016
For many people, running a bed-and-breakfast (B&B) is the dream lifestyle business, whether as a part of a retirement plan or an escape from the city. Or perhaps it’s an opportunity to turn your home into a business after your children have grown up and flown the nest. Whatever the reason, it can be a great business, if you can keep a business head on.
The good news is that the UK tourism industry is one of the largest in the world, comprising of around 180,000 businesses, employing 1.4 million people, and generating £19bn per year in foreign revenue. Even the smallest operator can do extremely well if they’ve got the right location, the right marketing and the right attitude.
To help you get your foot in the door of the B&B trade we’ve put together five simple tips, to help you set the business up, and give you a hand with some of the less obvious tasks that have to be handled.
1. Buy the right property
If you are starting from scratch or moving with the intention of starting a B&B in an idyllic spot, make sure you buy the right property. Make sure you know the location well, and have been there at all times of the year. Check on local knowledge to make sure you know about anything that may impact on your business (a chickenshed being built in a neighbouring field, or the gastro pub with the great reputation changing hands) and check planning applications to make sure there’s no development or roads, bypasses or high speed rail links happening close by that could affect your business.
The cost of buying a B&B varies hugely on a number of factors. Sites, such as hotels to buy and businesses for sale can give you a guide to the price of your right property.
Whether you are converting your own home into a B&B or purchasing an existing property, you will have to tell your mortgage lender. This is because once you turn your home into a B&B, it becomes a business and your lender may advise you to switch to a commercial mortgage.
2. You’ll need a sprat to catch a mackerel
If you want to build a good business and are starting from scratch, prepare to spend some capital at the outset. The bigger your plans, or the larger the property, the more cash you will need. You’ll need to
Give rooms en-suite bathrooms where you can – a big investment but customers expect it, nobody wants to have to queue for the loo first thing in the morning.
Get the decorating done – start off as you mean to go on. Avoid extremes of taste or style – keep things plain and unfussy. If you have got a distinctive taste or your B&B is obviously a chintzy cottage or a stately home, then go with it and ham it up.
Check on accessibility – can you put in a disabled loo downstairs? Is there a downstairs bedroom? Can guests enter and leave your property without negotiating stairs? Even though you don’t have to have full disabled accessibility, if you can do it, it will be appreciated and may bring you more custom.
Give your property a thorough health and safety risk assessment and minimise any potential risks – check all electrical items and get them PAT tested, make sure your central heating boiler is serviced, make sure there’s a hand rail by any steps or stairs, if there are changes in level or low beams mark them clearly, and install outside lighting if there’s a walk from the drive to the house.
3. Be ready for managing cash flow
More rooms mean more guests, but it also means more furnishings, higher utility bills and more staff. Make sure your property is as efficient to light and heat as you can. Get energy saving bulbs, and make sure your heating is on a good, responsive thermostat in every room. But even if you are careful with minding your outgoings, make sure your customers don’t feel you are scrimping or compromising their comfort!
4. Bed and Breakfast Insurance
Getting the right business insurance let’s you sleep at night and is one of the best investments you can make for your business.
Risks such as business interruption can have crippling consequences for your income, making adequate B&B insurance cover vital. Understanding the implications of inadequate B&B insurance before an incident occurs could save you time, money and stress.
The following is a list of insurance which you should consider purchasing if you do start a B&B:
Buildings cover – to cover against any accidental damage to the property itself. This protects your source of income should the unthinkable happen.
Contents cover – Depending on the policy, this type of insurance could cover everything within your B&B.
Public liability – covers you for civil actions brought by guests who sustain injury on your property.
Employee liability – covers you against civil actions brought against you by employees who sustain injury on your property.
Cancellation insurance – in case guests cancel at the last moment.
Personal accident, health, and key person insurance – in case you’re incapacitated at an important time.
5. Keep accurate records
Accurate records must be kept of all outgoings for when the time comes to pay tax. Getting a good accountant for the dreaded tax returns can save you stress and also makes sure you avoid any nasty surprises.
Get a business bank account and put all income and expenses for the business through this account. You can transfer your drawings out and put them in your personal account – setting this up on a standing order will also help you manage your personal finances.
By keeping good records you can also deal with any issues that arise with guests and have a marketing list of customers to remind to come back!
Finally, enjoy your business. Nothing is quite as satisfying as building up a successful business. Tap in to the resources and support there are for entrepreneurs and the business community as a whole, like the online business resource Sunzu as well as local business networking groups. You find loads of really good advice among your peers as well as having the opportunity to build a great network of suppliers and services.
by Charlotte Houghton - 7 October 2020
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