Questions to Ask When Buying a B&B, Part 2

Conducting a thorough investigation into the B&B lifestyle and career is important if you want a happy and successful career. The first 10 questions in my collection of 30 questions you should ask yourself before you buy a bed and breakfast were in Questions to Ask, Part 1.

Here are the next ten questions in my collection.

  • Can I schedule free time? How do I do that?
    As you create your business plan and cash flow analysis, be sure to include money and plans for staffing so you can get your free time. You aren’t any good to yourself, your family, or your guests if you are burned out. Insufficient free time will cause burn out.There are lots of ways to create that free time, the time off that will refuel you. Some innkeepers take time daily, others schedule time on a weekly basis, while others will work hard during a high season and then take four to eight weeks off (weeks off meaning vacation and inn maintenance time).
  • Do I want a full-time, part-time, or hobby B&B?
  • Is this a business or lifestyle for you, or what combination thereof?

The answer to these questions helps you determine how much cushion and outside income to have to sustain your B&B. Some parts of the country are more likely to have hobby B&B inns while others tend toward full-time businesses; some even operate complete with restaurants and bars. Whatever you want is fine, as long as you are financially prepared for your decision. And be aware that your decision can affect your ability to sell the property as a B&B. If you create a part-time business with low income and occupancy rates, you may have a hard time attracting a buyer because most buyers seem to want self-sustaining businesses.

  • Are my goals and dreams unrealistic; both personally and professionally?
    Many times aspiring innkeepers feel they will be B&B innkeepers for 20-25 years until they retire, or their kids take over the business. Sadly, that is highly unlikely, most innkeepers don’t own their inn for more than seven years. As unrealistic as expecting to run the inn for 20-25 years is, many aspiring innkeepers don’t even think about how long they will own their inn or what they will do afterward. Include this issue in your homework.
  • How many guestrooms do you envision yourself running?
  • Is that with or without staff?
    Most of the B&B consultants recommend that you need at least 8, 12, or 22 guestrooms to thrive in this industry. I think “it all depends” on your definition of what financial success is and what lifestyle you are seeking in this step. The answer to thriving truly lies in your needs and concept of what you want from your B&B business. If you are looking to interact with the guests, then you want fewer guestrooms. If you are looking to send several kids through college and travel the world with what you earn at the B&B, then you will want more guestrooms than fewer. Location, popularity as a tourist destination, and your market niche with customer service will dictate your success and cash flow. I’ve seen large inns suffer more than small inns, and I’ve seen small inns rake in money. There is no simple answer to financial success. And there is no simple answer to lifestyle success. You have lots of hard work ahead of you to analyze what kind of inn will work in your situation and where your B&B inn can be located to make that vision a successful reality..I will say that if you are after an inn with high customer service that you will need an average of one full-time employee per week per two guest rooms. Employees are the second highest expense you will have at your B&B inn. Customer service is your highest, or second highest, reason for success. It’s your decision; just be aware of the pros and cons of every decision you make regarding service and employees. And besides that, what kind of lifestyle will you have if you never have time off because you don’t want to hire employees? In my book, that’s not a great lifestyle.
  • Do you want an urban or rural B&B inn?
    This strongly relates to the kind of business you want — hobby or full-time — as well as what you want a community to provide to you. Here’s another case of intense analysis and personal introspection.
  • What rating, as in Mobil and AAA, do you want your B&B inn to have?
    Few inns actually get much business any more from either source, though it depends on the location and inn style, but the rating indicates the level of luxury and service you will offer. Some innkeepers don’t want to be bothered with the service level required to have a four-star or -diamond rating, and are quite content with three-stars or -diamonds. They say they don’t like the caliber of traveler they get with the higher rating. Personally, I find any rating to attract wonderful people. What I also find is that people expect to get what they perceive they have asked and paid for — a certain level of luxury and service. When guests don’t get what they perceived they would get they are unhappy and tend to become a “problem” with their demands of getting what they paid for. Whatever level you want to offer, shoot for the next level so that you are the best in your advertised level of luxury and service. That will make guests wonderfully happy and return, as well as send their friends and associates to your B&B.
  • What form of ownership do I want for maximizing my tax breaks and my protection?
    This is a great topic to bounce around with your tax attorney and accountant. What I do know is that you don’t want a corporation to own the real estate because of double taxation. I’ve been advised by a variety of tax professionals that you want at least two forms of ownership involved in the business, one to own the real estate which rents the property to another entity which owns and operates the business. That arrangement maximizes your tax benefits and minimizes your legal exposure. Another option includes putting the real estate into a trust, again which is leased to an entity which owns and runs the B&B. Talk to your tax professionals. Don’t let your bookkeeper talk you into sole proprietorship because tax returns are cheaper to file.
  • Do I want to operate other businesses as part of the B&B operation? (e.g., gift shop, weddings/special events, meetings, restaurant.)
    Additional income streams are good business. But be careful to not create too much work in creating additional income streams. I remember one innkeeper planning to run five rooms and a gift shop with her inn, and then to hold daily afternoon teas — all by herself. She pooh-poohed my warnings that five rooms alone would keep her busy — until she actually was running her inn. Her afternoon teas, a great concept to interact with the community, never materialized.

Continue your research and self-examination. Answering and reviewing your answers along the way will help keep you on track with your dream and your reality. Innkeeping is an individual expression of you and your notion of hospitality. Be true to yourself. And to do that you need to know yourself. These questions will help.