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By Karen Thorne
Before you consider setting up a Bed and Breakfast you must do your financial projections and work out how much money your B&B will actually make to see if it is actually worth setting up in business.
If you are buying an existing business you will probably have access to the business accounts which will show you how much money the previous owners have taken each year. This will give you a good idea of how much money you can expect to make. If there is potential to improve the business you may be able to make more money. Or you may make less money than the existing owners, depending on how you run the business.
Bear in mind that previous good performance does not guarantee good takings for the future. There may be factors beyond your control, such as a weak dollar, bad weather, an outbreak of foot and mouth , which may all contribute to a decrease in the number of people staying at B&Bs.
If you are setting up a brand new business what factors will affect your occupancy and potential turnover?
Location, Location, Location
This is probably the most important factor to consider. Your location is going to affect the price you can charge, your occupancy levels and the type of guests you have coming to stay.
Your location and proximity to popular attractions or business areas will affect your occupancy levels. English country B&Bs without any business tourists tend to be seasonal, with most of their guests staying between spring and late autumn. Whilst B&Bs that benefit from business tourists or a popular year round attraction or in a city may well see good occupancy figures throughout the year.
Quality and Style of B&B
Generally speaking, the higher the quality rating of a B&B, the higher the occupancy. Though you need to ensure that your B&B also meets the needs of the guests coming to the area. If you are in the middle of nowhere on a long distance walk, you are likely to be more attractive to potential walking guests if you provide cheap good value accommodation than if you are running an expensive boutique hotel.
Facilities Offered
The facilities you offer to guests may well have an impact on your occupancy levels. If you are not within walking distance of a pub or restaurant you may need to offer evening meals to guests to encourage more people to stay.
If you are next to a famous children's theme park or a famous dog showground, you will probably reduce your occupancy levels if you do not take children or dogs.
If you want to tap into the business tourist market you will need to offer facilities such as internet access, good showers, early breakfasts etc.
How Much You Charge
Obviously the price you charge for a one night stay at your B&B will affect how much money you take in a year.
The price you are able to charge will depend on all of the things I have already discussed; location, quality, style and facilities offered. Pricing can be difficult to get right and I know some people are uncomfortable with it. On my courses I have noticed a tendency for people to want to undercharge for fear of being seen as greedy or pricing themselves out of the market.
I would suggest spending some time on the internet to get to know your local B&Bs and the prices they charge, then setting a price about the same as similar B&Bs to yours. You can then review your prices over time and adjust as necessary.
Karen Thorne runs the award winning Hopton House Bed and Breakfast in the beautiful South Shropshire countryside. http://www.shropshirebreakfast.co.uk
If you're looking to run your own bed and breakfast in the UK, then save yourself time, effort and money by checking out our training courses and free resources at http://www.bedandbreakfastacademy.co.uk Everything you need to know to Set Up, Run and Market your own successful B&B business.
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