Building a B&B

From “Ask Kit!”:

Q: We were looking to purchase land and build our own bed and breakfast. This will be over a long period of time for us. It seems that the info we have read is about purchasing established B&Bs. Is it not wise to start from scratch? If it is ok do you have any tips?

A: Convention wisdom is that it’s always better to buy an existing business than start one from scratch. An existing business already has market presence, clients, and cash flow. The challenges or hurdles of starting a business — zoning, renovation, slow business — are past you so you are left with growing the business. The same holds true of bed and breakfasts.

Many of the same guidelines and wisdom of buying an existing apply to building your own B&B. My suggestion is that you pursue your B&B education: take classes, read books, and attend conferences. Build your dream from scratch with solid information so that when it’s time to buy the land for your B&B you do it wisely. And then when it’s time to start designing and building your B&B, you do that wisely.

6 thoughts on “Building a B&B”

  1. Actually we are building and have found that with the web many new B&Bs are getting a fast start. You will want to have your website up prior to (about 6 months out) starting with reservations. Give photos of the progress. We have friends that did so and hit the ground running and have been VERY busy ever since (Inn at Riverbend in Virginia).
    We found building ourselves we have been able to keep the cost down. What is also helping us as we get closer to our opening date this fall, what has helped us is starting our wine tour business. We are going to be a wine country theme so have a list of people who want to stay with us when we are open.
    So the answer is, we found YES if you don’t have a chunk of cash building is a great way to do it as you can open with one room even and add the others. We are doing one wing at a time. I would consider making sure you have a SUPER and PROFESSIONAL website to get you going. Any other questions please feel free to contact me directly.
    Erika Goodell
    Arcady Vineyard

  2. The rumor-mill makes new home construction seem like a nightmare, something to be avoided at all costs. New construction and renovation can be trouble free or laced with conflict. To help short-circuit the conflict there is a new approach, offered by the Institute for Conflict Management, called Issue Revew Board.
    The idea behind the concept is that as part of your construction agreement you agree on a Board who will meet with you on a regular basis during construction (or renovation). As issues arise, the Board resolves them; the fast action keeps the issues from becoming big conflicts, letting the construction proceed smoothly and quickly. People who have used this process have reported that this approach is faster antd cheaper than any of the standard conflict approaches.
    Feel free to use this clause in your contracts. It’s a proactive way of keeping peace in your life and projects.
    Issue Review Board (TM):
    Any controversy or dispute between any of the parties to this Agreement arising out of any of the terms, provisions, or condition of this Agreement, shall be submitted to the Issue Review Borad (TM) subject to the administration of the proceeding by the Institute for Conflict Management (LLC) (1-310-356-6970 or and the use of their Rules and Precedures. Any written recommentdation rendeered by the Issue Review Board (TM) shall be admissible as evidence for any state or federal court having jurisdiction therof.
    Minimizing the conflict in your B&B project reduces stress and increases your joy. Both attitudes will help you be fresher when you open and offer the best hospitality you have.

  3. I guess that would come in handy with contractors and such – but we built ourselves so I don’t think we would have reason to use that conflict management system. If Chris and I have a conflict I make him call his family. They are always on my side.
    Erika Goodell
    Arcady Vineyards

  4. It’s actually a lot easier to purchase an established business provided you go over the books and verify that the business is actually profitable.
    According to the small business administration, 60% of all new businesses fail within five years.
    The ten leading reasons for new business failure are:
    1. Inappropriate Financing i.e. using a high interest rate credit card or accepting a 90 day note from a bank.
    2. Under-capitalization – most businesses don’t set aside enough money as operating expenses to survive their first year of business. They also don’t budget for advertising.
    3. Low sales volume Some B&B owners operate with a “If you build it, they will come” mentality … they open their doors and expect a horde of business except nobody comes because nobody knows they exist. ADVERTISING IS CRIICAL!
    4. Excessive sale volume i.e. sales overwhelm your capacity to provide quality service. The housekeeping staff may be poorly trained. This results in slow turn around times for cleaning rooms or rooms that have been improperly cleaned. The person making breakfast may be overwhelmed. Food orders don’t go out on time or insufficient food is prepared. And heaven forbid that you doublebook a room and don’t catch the mistake until two guests show up demanding the same room …
    All of these problems may result in a decline of service with all the accompanying pitfalls that come from a sagging reputation.
    5. Lack of financial understanding or training. You have to know how to keep your books? What’s deductable? What’s not? Who do you owe taxes to? Are you paying your quarterly taxes promptly? Failure to pay taxes on time will result in rising penalties and interest.
    6. Unforseen economic Problems i.e. Hurricane Katrina resulted in nationwide surges in the cost of gasoline … winter raises the cost of heating oil … the local utility company raises the cost of water and sewage by 10% … your property taxes goe up …
    7. Lack of financial reserves
    8. Owner’s failing health
    9. Burnout/Divorce (i.e. the owner abruptly realizes that the business is taking much more time than he/she thought it would) … the stress of operating a new business leads to divorce. The person suing for divorce demands half of the assets and his/her attorney freezes all business assets pending settlement.
    10. Your business has no strategic business plan. Who is your target market? How will you market your business?

  5. We are in a small university town, and there are a few cons to consider:
    Our university is about 5000 students but many are commuters, not dorm residents, and they add significantly to traffic and parking issues in town.
    When school is in session, the students prefer parking on the two commercial blocks in town to their student parking lot (deemed, at 1/4 mile away, too far to walk), and it is difficult for customers to park in town. We have less trouble with this than our fellow business owners since we are another block away, but it is a town problem.
    Noise is an issue – the radios at full booming blast as they drive through our 4-way stop sign rattle the windows, and you would be wise to check your location against student rentals and student bar hangouts – both of which cause tremendous problems for residents in the area. Vandalism, fighting, and real noise issues occur at these spots in our town. Over $100,000 of our small town police budget is for working at night when the bars close.
    The university contributes some to our guest population but mostly during its annual theater festival held in July. During the school year we get very little traffic from parents. This is very different from other university towns, like Lexington, VA or Blacksburg, VA – the B&Bs there could fill 100 rooms from the school on event days.
    Thomas Shepherd Inn

  6. I did my culinary externship at a B&B in Austin. It was just a couple of blocks away from the University. We got a LOT of business from U.T. Austin, though it should be noted that Austin’s enrollment is at least ten times larger with 50,000 undergraduates alone!
    Since we were the closest lodging facility to the university, U.T. Austin had a contract with the B&B and sent us all of their visiting professors as well as all of the Ph.D’s who were being interviewed for employment.
    People interested in the University’s graduate programs stayed at the inn along with parents visiting undergraduates and alumni who came to Austin to watch football games.
    Roughly 60% of our business was related in one way or another to the university.

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