A bed and breakfast business plan is an all-embracing road map for your small business’s growth and development.
I’m going to give you the guideline you need to write yours.
Welcome to another edition of Hospitality Property School.
I am your instructor, Gerry MacPherson.
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Why create a bed and breakfast business plan
Every new company should really think about writing a business plan and this is especially true for bed and breakfasts. If you want to take out a loan to start your business or raise money from other investors, you will probably need one.
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Many get nervous about the thought of starting a business plan or don‘t know where to start. You don‘t have to get bogged down in the process. Following the guideline I am laying out for you is an excellent way to get your thought juices flowing.
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If you don’t need to seek funding, it is still a good idea to write a bed and breakfast business plan as it can be used as a tool to strategically manage your business as it gets up and running and starts to grow.
The bed and breakfast business plan guideline
This guideline is to be used as an example. Customize it to fit your requirements, and just so you know, the numbers I will be using as examples are fictitious.
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I will be reading the guideline for you, please note there will be sections you will have to fill in the blanks. To make it easier to follow visit keystonehpd.com and search for episode #301.
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Section I. Executive Summary
Company Overview
[Company Name], located in [insert location here], is a new, small Bed and Breakfast focused on providing modern rooms for leisure visitors to the area. The Company’s rooms will feature modern furniture, high-end technology and modern accessories.
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Services
[Company Name] offers all of the standard Bed and Breakfast services, including daily room cleaning, free local calls, cable TV, and a free wireless network. Additionally, the Bed & Breakfast will include a restaurant lounge serving breakfast, lunch, and dinner, as well as Afternoon Tea and Cocktails.
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Customer Focus
[Company Name] primarily serves leisure travellers seeking comfort, amenities, and simplicity of services. In general, the market for bed and breakfast segments tends to be relatively affluent and well-educated.
- The single largest segment of the bed and breakfast market is guests on pleasure trips. These trips are usually short, weekend breaks to relieve work-related stress. Special events, such as weddings, are important revenue drivers.
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- Group travel and business meetings/seminars are important revenue drivers during weekdays and increasingly access points at a central point or in rooms, to attract this latter market.
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- *150,000 visitors to the area according to our regional Tourism Office
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- 55% between the ages of 40 and 49, 16% 18 to 29, 18% 50-59, and 10% 60+according to the National Household Survey of Travel
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- Average household income of *$75,000 according to our Bed and Breakfast Association
*These are fictitious numbers
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Management Team
[Company Name] is led by [Founder’s Name], who has been in the Bed and Breakfast industry for 20 years. While [Founder] has never developed a Bed and Breakfast from the ground up, they have worked in the Bed and Breakfast industry most recently as a general manager, and have held various different positions in the management chain over the last 20 years. [Founder] has an in-depth knowledge of the Bed and Breakfast business, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).
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Success Factors
[Company Name] is distinctively qualified to succeed due to the following reasons:
- There is presently no Bed and Breakfast in the community we are entering. In addition, we have surveyed the area and determined there is a demand from frequent visitors who would use our Bed and Breakfast location when launched.
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- Our location is central to the downtown, airport, tourist attractions and corporate district of the city.
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- The management team has a positive record of success in the Bed and Breakfast industry.
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- The city announced plans to invest over *$1 billion in tourist attractions over the next two years and existing hotels will not be able to handle the increased capacity of visitors travelling to the city.
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Financial Highlights
[Company Name] is currently seeking *$2,000,000 to launch. Specifically, these funds will be used as follows:
- Bed and Breakfast design/build: *$1,500,000
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- Working capital: *$500,000 to pay for marketing, salaries, and land costs until [Company Name] breaks even.
*These are fictitious numbers
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If you are a member of the Hospitality Property School Group, you will see an example of the projections chart over the next five years.
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Section II. Company Overview
Who is [Company Name]?
[Company Name], located in [insert location here], is a new, small Bed and Breakfast focused on providing modern rooms for leisure visitors to the area. The Company’s rooms will feature modern furniture, high-end technology and modern accessories.
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[Company Name] was founded by [Founder’s Name]. While [Founder’s Name] has been in the Bed and Breakfast industry for some time, it was in [month, date] that they decided to launch [Company Name].
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Specifically, during this time, [Founder] took a business trip to [Insert Location Town, City, Region]. During his trip, [Founder’s Name] could not find a mid-level, Bed and Breakfast in the area. After visiting the Bed and Breakfast options in the [Insert Location Town, City, Region] and learning of the expected growth in travel to [Insert Location Town, City, Region], [Founder’s Name] clearly recognized an opportunity that a Bed and Breakfast would enjoy significant success in this area.
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Specifically, the local demographics, business demographics and competitive situations in the [Insert Location Town, City, Region] were so favourable to the success of this Bed and Breakfast idea that they knew it would work.
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[Company Name]’s History
Upon returning from [Insert Location Town, City, Region], surveying the local customer base and online market, estimating travel growth, and finding a potential Bed and Breakfast location, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].
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The Bed and Breakfast development operations are currently being run out of [Founder’s Name] home office. Once the land rights have been purchased, operations will be run from an on-site location to insure that every detail is being thought out and completed.
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Since incorporation, the company has achieved the following milestones:
- Found site location and signed the land deed purchasing rights to the land.
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- Developed the company’s name, logo and website located at www…
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- Hired an architecture firm to create a blueprint of the Bed and Breakfast
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- Taking bids from construction crews and electrical engineering firms
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- Determined equipment leasing and financing requirements
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- Began recruiting key employees with experience in the Bed and Breakfast industry
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[Company Name]’s Services
Below are [Company Name]’s initial service offerings and amenities provided.
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If you are a member of the Hospitality Property School Group, you will see an example of the initial service offerings and amenities provided chart over the next five years.
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Bed and Breakfast Design
[Company Name] will develop a 20,000 square foot Bed and Breakfast with key elements that will include the following:
- Upper and Lower Floors with 18 Single rooms
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- 2 Studio Apartment Rooms
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- Restaurant Lounge
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Here you could include a rough sketch of the Bed and Breakfast design plan:
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The Bed and Breakfast location will have 15 dedicated parking spots which should suffice even in peak parts of the travel season as guests will often not have cars with them.
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[Company Name] plans to be open 7 days a week, 24 hours a day, to take care of all guests’ inquiries and issues as they may arise. As demand dictates, we may extend or reduce our services and hours.
Section III. Industry Analysis
[Company Name] directly or indirectly competes with all Bed and Breakfasts nearby our Bed and Breakfast locations. The competition will come from inns, motels and hotels.
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Industry Statistics & Trends
The Bed and Breakfast Accommodations industry is expected to perform at a slightly slower rate over the next five years than in the past five-year period. The resurgence of travel rates Post COVID-19 is expected to continue, while travel spending is projected to increase over the next five years as the economy improves. Consumer spending is expected to increase *2.7% per year on average over the next five years. IBIS World estimates that over the same period, international arrivals will increase at an average rate of *4.3% per year, while domestic travel will increase an average of *1.7% per year. The influx of tourist dollars will likely bolster revenue for bed and breakfasts (B&Bs).
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With increased competition from different facilities, the hospitality property industry often faces difficult times ahead. Sites like Airbnb have been a thorn in their side as they offer a more affordable alternative to hotel stays. While it is unlikely that a mass exodus of enterprises leaving the industry to operate exclusively through Airbnb will occur, a number of non-employing establishments that are unable to afford the investment it takes to develop an effective internet presence may exit to capitalize on Airbnb’s exposure.
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As millennials comprise a more significant portion of the workforce and, in turn, consumer spending, many larger hotel chains have also expressed interest in entering the Bed and Breakfast Accommodations industry to increase their overall market share in the travel accommodation sector.
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These trends are expected to result in slower revenue growth over the next five years, despite relatively consistent trends that are expected to facilitate growth. Over the five years, revenue is forecast to increase an annualized 1.7% to $2.9 billion.
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In conclusion
This concludes the first three sections of the nine-section guideline for a Bed and Breakfast Business Plan. Are you starting to get an idea of what a professional business plan requires? To see the remaining five sections make sure to check out The Authoritative Bed and Breakfast Business Plan-Part 2 at KeystoneHPD.com to be released Thursday, July 21st, 2022,
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Are you considering opening a bed & breakfast?
Let me know in the comments.
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We cover more on organizational structure in “The Guide to Owning & Operating a Hospitality Property – Successfully” book & course. You find more information at KeystoneHPD.com
You will have access to this episode for as long as you would like but if you would like to see all the bonuses you would have access to as a member of the Hospitality Property School Group, check out the short video in this episode post-show notes.
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In our next episode, I will continue sharing the Guideline for a Bed and Breakfast Business Plan.
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That’s it for today’s episode,
Until next time, have a fun day.
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If you haven’t done so yet, make sure up sign up for the INNsider Tips, say hi on social and join one of our groups. And make sure you get your free copy of the “How to Improve Your Hospitality Properties Success”.
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You can find all the links in the show notes.
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⇒ TO READ OR LISTEN TO THIS EPISODE ON KEYSTONE HOSPITALITY PROPERTY DEVELOPMENT:
https://keystonehpd.com/the-authoritative-bed-and-breakfast-business-plan-301
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“The Guide to Owning & Operating a Hospitality Property – Successfully” course.
https://KeystoneHPD.com/Course
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Did you get your copy of the “How to Improve Your Hospitality Properties Success” ebook?
KeystoneHPD.com/How-to-Improve-Your-Hospitality-Properties-Success
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Get Your INNsider Tips
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Join one of your private groups
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Say hi on social
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LinkedIn: https://www.linkedin.com/company/keystone-hospitality-development
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Listen to The Hospitality Property School PODCAST here
keystonehpd.com/hospitality-property-school-podcasts
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