Financial Planning for the B&B Innkeeper

Financial planning is one of the more boring-sounding topics to think of as you go about life, but it’s critical to the well- being of you and your inn. The kind of financial planning I’m talking about goes beyond financial retirement planning and even personal financial planning. Do you have a plan to cover the eventuality you (be that singular or plural) get sick?

Most of the time illness isn’t planned for. Generally, when you are anticipating your B&B lifestyle, you are anticipating continued health and vitality. And for most of us, that is the way life goes, except for the natural aging process that none of us can escape. But for some, illness or disease becomes a life-altering reality, a reality that can put a stop to your innkeeping career, and threaten the viability of the inn itself.

If you approach your financial management and planning with care, you can survive some illnesses. Your plan should include health insurance and a healthy savings account. That approach will let you get past the illness without decimating your savings or putting you into debt. That’s a good start. But you probably want more comprehensive financial planning than just health insurance and a healthy savings account. Your financial planning process needs a wider scope or vision than just getting past the illness.

What if you have an illness or disease you can’t get past? One that will change your life forever? How will your partner manage? How will the bed and breakfast thrive? What will you do if you can’t work much longer, or can’t go back to work at all? I know several innkeepers who have been in that situation, and they each had a different approach to their financial and estate planning.

I knew an innkeeping couple who had a lovely bed and breakfast that was making a good living for them. Then one of them got sick and couldn’t work for several months. When they bought their inn, they “couldn’t afford” health insurance, So when the one innkeeper got sick, they had to deplete their savings to tend to the medical bills and hired help for those several months. That’s when they decided they had to sell, move back to the city, work traditional jobs–with health insurance benefits–and be near doctors who could take care of them if either of them got sick again. The inn sold quickly, but not for the price it could have if they hadn’t felt pressured to sell.

Then there was the innkeeper who had cancer and a life-long dream of being a bed and breakfast innkeeper. The couple decided that since the cancer was in remission they’d pursue the B&B dream. All was fine for years, then the cancer returned, killing its victim quickly, and leaving the partner to run the inn that was never “his” dream. The inn is on the market, but can you imagine what will happen to the business as the disinterested, broken-hearted innkeeper tries to keep the B&B going? Chances are, it won’t go well. Does their financial planning take into account a possible loss of equity? I hope so.

And then there is the innkeeping couple who has been active in the bed and breakfast industry for years, successfully developing two different inns. Health insurance and savings weren’t enough to help them through their diseases. One partner was diagnosed years ago with a disease that would slowly deteriorate “his” mind and body. Ok, that can be worked with because there is some time to develop a sound plan. That was the case until the other innkeeper was diagnosed with at least a debilitating, if not deadly, disease. It may not be too late for them to design their financial and estate plan, but they have lots to do in the time they have left. Talk about stress!

If you are saying to yourself, “I hate financial planning!” then maybe you should seek professional financial planning advice and counseling. Keys to financial planning include not only insurance and savings, but also wills, a written plan of who will take over for you, developing your operating procedures manual (if you don’t already have one), and your plan of action for different levels of disability. Your best strategic financial planning will be a combined effort of your tax accountant, tax attorney, and financial advisor. You may want to ask around to find the best financial planning services for your situation.

This is clearly a time to not “cheap out” and try to save money. That short-sighted attitude could cost you lots of money–more than if you had hired professionals to guide you. Yes, there is financial planning software available to help you, but it can’t begin to know all the nuances of a good financial planning retirement plan for your specific situation. You owe it to yourself, and those in your life, to cover all bases well. Hire a professional.

Hopefully you are vibrantly well as you plan for or operate your B&B. But life happens. It’s imperative that you have thought through all the eventualities of your business, including you not being involved in it. Good financial planning is your ticket to retirement and financial stability. Don’t put it off. You’ve worked too hard to just let your money slip through your fingers due to lack of planning. Make retirement financial planning part of your B&B plan, as well as other aspects of financial planning so that you preserve your assets. That’s not a boring topic!