Developing A Bed & Breakfast Business Plan

For many people, running a bed-and-breakfast (B&B) may seem like a dream job. This is a business, however, that you'll need to go into with your eyes wide open. If you're not a people person committed to working 24/7, running a B&B may be more like a recurring nightmare. Do some homework to ensure your plan is not only viable but doable.


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1. Evaluate whether you have the personality and interest to host guests in your house night and day, season after season. Being outgoing and friendly is part of the job whether or not you feel like it. Interview B&B owners and learn about their lives--and whether that's the life you really want.

2. Decide where you'd like to live and work. Locations close to tourist draws are generally the most popular, although out-of-theway accommodations can be just as popular if there is something distinctive and alluring about the place or its surroundings.

3. Check local zoning codes by calling the zoning board at your town hall to ask about the process for getting approval for a B&B. Be aware that some areas prohibit them. If you plan to renovate an existing building, have a contractor confirm compliance with local building codes. Find out whether there are any restrictions on the types of food that can be served, such as a full breakfast versus just coffee and muffins.

4. Draw up a business plan. Work your numbers carefully. The profit margin for many B&Bs is modest at best. Contact national trade associations such as the American Bed and Breakfast Association (abba.com) for guidelines about setting up a B&B. Also, talk to other B&B owners; some might share financial information. See How to Finance Your Business Idea.

5. Determine how many guests you can and want to accommodate. Some B&Bs limit themselves to just a few guests, others take in 20 and more. Investigate how this will be impacted by the building codes; B&Bs with more than five rooms must comply with the Americans with Disabilities Act (ADA.gov).

6. Survey local competitors' prices. You'll want to be competitive with others in the area.

7. Develop an effective yet realistic marketing plan and budget. How will people hear about your B&B? Effective advertising can be expensive and high-income customers may be difficult to reach. Free ink is terrific marketing, and cheaper than advertising, so explore getting editorial coverage in local papers, regional publications and national travel magazines. A good PR consultant may be worth the cost if you get the right coverage.

8. Compile an e-mail list of past guests to take advantage of cheap and effective outreach. Make sure you are listed in all relevant B&B guides and directories, and both printed publications and online resources. Pay attention to your competition's advertising: What works and what doesn't? Remember that marketing can seem like a financial black hole, so spend for maximum measurable impact. Put up a Web site to attract customers from all over.

9. Hire qualified staff to keep things running smoothly. A housecleaner is vital; a cook, dishwasher, bartender, waiter and groundskeeper may be helpful additions during the high season and as the business grows.

10. Subscribe to a reservation service agency in order to reach a broader market, reduce your workload, and turn over the financial dealings to the experts. Turning over reservation and payment arrangements may negate the need for a merchant credit card account, too. However, there is an annual fee and a commission to be paid for each reservation handled. B&B Midwest Reservations (bandbmidwest.com), for example, charges a $75 setup fee and takes 25 percent of each reservation made on a member's behalf.

11. Set guest policies and house rules regarding check-in and -out schedules, cancellations and late arrivals, as well as whether pets, children and smoking are permitted.

12. Cater to your guests by making their experience as wonderful as possible. Serve excellent food and build a good wine list. Make sure the rooms are spotless, cozy and inviting. Remember that it's the little things that will keep guests coming back, such as the homemade muffins, the twilight kayak paddle or the tour of the gardens.

13. Network with fellow B&B owners, visitors bureaus, tourism offices and chambers of commerce to increase awareness of your business. Join national trade associations like ABBA.

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