In today’s episode, I’m going to continue giving you the guideline you need to write a bed and breakfast business plan for your property’s growth and development.

Welcome to another edition of Hospitality Property School.

I am your instructor, Gerry MacPherson.

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In episode #310, I shared the first three sections you need to follow when writing a Bed and Breakfast Business Plan. In today’s episode, I will share the last six sections.

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This guideline is to be used as an example. Customize it to fit your requirements, and 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 #302.

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Section IV. Customer Analysis

Profile of Target Market

[Company Name]will serve the leisure travel market of [Insert location] and its immediate surrounding area.

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The market we serve is value-conscious and desires high comfort and amenities geared towards families and comfort travellers.

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Leisure travellers are more likely to book a trip this year, relying on new resourcefulness fostered by the last couple of years of COVID-19.

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The number of domestic trips by residents has turned the corner since COVID-19.

  • Direct spending on leisure travel by domestic and international travellers totalled *$550.8 billion in 2019.

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  • Spending on leisure travel generated *$104.6 billion in tax revenue.

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  • Nearly 4 out of 5 domestic trips taken are for leisure purposes (79%).

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  • Residents logged *1.2 billion person‑trips for leisure purposes last year

 

  • Top leisure travel activities for domestic travellers: (1) visiting relatives; (2) shopping; (3) visiting friends; (4) fine dining; and (5) beaches.

*These are fictitious numbers

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The Authoritative Bed and Breakfast Business Plan-Part 2 | Ep. #302

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If you are a member of the Hospitality Property School Group, you will see an example of the demographic profile of the target market.

 

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Customer Segmentation

We will primarily target the following three market segments:

  1. The Leisure Travel Market: Travellers to [Insert Area or City] tourist attractions such as the Fine Art Museum and the Annual Jazz Festival, as well as visitors to social events such as weddings.

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     2. The Business Travel Market: Travelers to [Insert Area, City] corporations and events.

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     3. International Tourists: Last year, there were over *879 million international tourist arrivals worldwide, with a growth of *2%. International tourist receipts were *$736 billion, according to tourismtoday.com.

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If you are a member of the Hospitality Property School Group, you will see an example of a travel market pie chart.

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The Authoritative Bed and Breakfast Business Plan-Part 2 | Ep. #302

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If you are a member of the Hospitality Property School Group, you will see an example of a travel market pie chart.

 

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The Authoritative Bed and Breakfast Business Plan-Part 2 | Ep. #302

Section V. Competitive Analysis

Direct & Indirect Competitors

The following Bed and Breakfasts are located within a 10-mile radius of [Company Name], thus providing either direct or indirect competition for customer acquisition:

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The Fairy Tale Bed and Breakfast

The Fairy Tale Bed and Breakfast is [Insert Location Town, City, Region] leading Bed and Breakfast and has been in business for 20 years. The Bed and Breakfast offers a wide array of services and amenities that you typically find at a Bed and Breakfast.

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The Fairy Tale Bed and Breakfast offers luxury amenities, many of which are not necessary for travellers and charges a high price for those amenities ($200-300 per night). Furthermore, the Bed and Breakfast does not offer a small conference room, only larger meeting spaces. Additionally, this Bed and Breakfast does not offer wireless internet in sleeping rooms.

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The Saltwater Bed and Breakfast

The Saltwater Bed and Breakfast has been in business for 15 years. The Saltwater Bed and Breakfast offers a variety of services and amenities all typical of the Bed and Breakfast and hospitality industry.

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However, [Company Name] has several advantages over The Saltwater Bed and Breakfast including:

  • Saltwater Bed and Breakfast is priced at a premium because of its waterfront location

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  • Saltwater Bed and Breakfast rooms are aging and in need of renovation

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  • Saltwater Bed and Breakfast does not have studio apartment options for long-term stay

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  • Saltwater Bed and Breakfast does not have a meeting space

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Willow Tree Bed and Breakfast

Willow Tree Bed and Breakfast is located four miles to the East of our intended location. Willow Tree Bed and Breakfast has been in business for the past 10 years and is part of the ABC family of Bed and Breakfasts, allowing it to use centralized booking with ABC and the ABC loyalty points system.

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[Company Name] has several advantages over Willow Tree Bed and Breakfast including:

  • Willow Tree Bed and Breakfast does not have a central downtown location

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  • Despite the rooms being more modern than most existing, Willow Tree Bed and Breakfast is still behind the time with no LCD TVs or Wireless Network.

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While we expect that Willow Tree Bed and Breakfast will continue to thrive based on the ABC loyalty program, we expect that more and more customers will frequent [Company Name] based on the value offered for a similar price and more central location.

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The Authoritative Bed and Breakfast Business Plan-Part 2 | Ep. #302

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If you are a member of the Hospitality Property School Group, you will see an example of a competitive pricing chart.

 

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Competitive Pricing

Competitive Advantage

[Company Name] enjoys many advantages over its competitors. These advantages include:

  • Location: [Company Name]’s location in the downtown area, gives the best access to the airport, tourist attractions, corporate center, downtown, shopping and restaurants. The Company also offers suitable parking making it easy for customers to relax upon arrival.

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  • Business Amenities: Wi-fi throughout the Bed and Breakfast will make working remotely simple for business visitors.

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  • Management: Our management team has years of business and marketing experience that allows us to market and serve customers in the same manner as our most high-level competitors.

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  • Relationships: Having visited the community for a number of years, [Founder’s Name] knows all of the local leaders, newspapers and other influences. As such, it will be relatively easy for us to build the brand and awareness of the Bed and Breakfast.

The Authoritative Bed and Breakfast Business Plan-Part 2 | Ep. #302

Section VI. Marketing Plan

The Marketing Plan describes the type of brand [Company Name] seeks to create and the Company’s planned promotions and pricing strategies.

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The [Company Name] Brand

The [Company Name] brand will focus on the Company’s exclusive value proposition:

  • Offering rooms suited for families and business travellers and services

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  • Offering a central location in the downtown area

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  • Providing excellent customer service

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Promotions Strategy

[Company Name] expects its target market to be leisure travellers mainly from our country and the surrounding locations. The Company’s promotions strategy to reach these individuals includes:

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Phone Prospecting

[Company Name] will assign salespeople to contact area corporations to arrange for bulk corporate rates for their visitors depending on the volume of visitors they will have.

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Public Relations

We will contact all local and regional area newspapers and television stations to tell them about the Bed and Breakfast opening and unique value proposition of [Company Name].

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Advertising

[Company Name] will initially advertise on travel websites, which are frequently being used these days to book travel due to their ease of use and reviews.

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Ongoing Customer Communications

[Company Name] will maintain a website and publish a monthly email newsletter to tell local corporations and past customers about promotions and events.

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Pre-Opening Events

Before opening the Bed and Breakfast, [Company Name] will organize pre-opening events designed for prospective national customers, local customers and press contacts. These events will create buzz and awareness for [Company Name] in the area.

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Pricing Strategy

[Company Name]’s pricing will vary based on the season and occupancy percentages using a computerized yield management system, but pricing will always place the Bed and Breakfast in the mid-range, below luxury offerings and above Bed and Breakfasts and motels in the area. Customers will feel they receive great value when utilizing the Bed and Breakfast.

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Section VII. Operations Plan

Functional Roles

In order to execute [Company Name]’s business model, the Company needs to perform many functions including the following:

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Administrative Functions

  • General & Administrative functions including legal, marketing, bookkeeping, etc.

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  • Sourcing and storing supplies for the Bed and Breakfast and conference space

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  • Hiring and training staff

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  • Corporate sales to individuals and groups

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Bed and Breakfast Services

  • Housekeeping

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  • Check-in focused on customer service

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  • Janitor/maintenance personnel to keep the Bed and Breakfast clean and in working order

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Milestones

[Company Name] expects to achieve the following milestones in the following [] months:

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If you are a member of the Hospitality Property School Group, you will see an example of the following milestones in the following [] months.

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The Authoritative Bed and Breakfast Business Plan-Part 2 | Ep. #302

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If you are a member of the Hospitality Property School Group, you will see an example of the following milestones in the following [] months.

 

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Section VIII. Management Team

Management Team Members

[Company Name]is led by [Founder’s Name] who has been in the Bed and Breakfast industry for 20 years.

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While [Founder] has never developed a Bed and Breakfast from the ground up, he has worked in the Bed and Breakfast industry most recently as a general manager and has held various different positions in the management chain over the last 20 years. As such [Founder] has 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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[Founder] has also worked as a consultant on a part-time basis over the past 10 years. Specifically, he has worked in contracting positions to help other developers with their Bed and Breakfast launch plans, as well as their operations, plans once the Bed and Breakfast has been launched.

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[Founder] graduated from the University of ACME where he majored in Bed and Breakfast Management.

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Hiring Plan

[Founder] will serve as the Bed and Breakfast president. In order to launch our Bed and Breakfast, we need to hire the following personnel:

  • Housekeeping staff (5 to start)

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  • Bed and Breakfast Manager (will manage day-to-day operations of the Bed and Breakfast)

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  • Assistant Manager (will manage Bed and Breakfast operations nights and weekends)

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  • Service Staff (4 full-time to work check-in and guest services – allowing for at least 1 staff person to be on duty at all times)

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  • Sales Staff (2 full-time) will target and book corporate clients in sleeping rooms and the meeting space

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  • Legal, Bookkeeping, and other Administrative functions (3 staff)

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Section Plan IX. Financial Plan

Revenue and Cost Drivers

[Company Name]’s will come from Bed and Breakfast room occupancy and food and beverage.

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The major costs for the company will be salaries and the cost to maintain the standard of the Bed and Breakfast. In the initial years, the company’s marketing spending will be high, as it establishes itself in the market.

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Capital Requirements and Use of Funds

[Company Name] is seeking total funding of *$2,000,000 to launch the Bed and Breakfast. The capital will be used for funding capital expenditures, manpower costs, marketing expenses and working capital.

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Specifically, these funds will be used as follows:

  • Bed and Breakfast design/build: approximately *$1,500,000

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  • Working capital: approximately *$500,000 to pay for Marketing, salaries, and lease costs until [Company Name] reaches break-even

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Key Assumptions & Forecasts

Below please find the key assumptions that went into the financial forecast and a summary of the financial projections over the next five years.

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If you are a member of the Hospitality Property School Group, you will see an example of the key assumptions that went into the financial forecast and a summary of the financial projections over the next five years, a 5-year annual income statement, 5-year annual balance sheet, 5-year annual cash flow statement,

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The Authoritative Bed and Breakfast Business Plan-Part 2 | Ep. #302

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If you are a member of the Hospitality Property School Group, you will see an example of the key assumptions that went into the financial forecast and a summary of the financial projections over the next five years, a 5-year annual income statement, 5-year annual balance sheet, 5-year annual cash flow statement.

 

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In conclusion

Over the last two episodes #301 & #302, I have shared a bed and breakfast business plan guideline for aspiring bed and breakfast owners. Obviously, based on your country of origin, some of the information will vary and I do recommend you research other like-minded business owners to see samples of their business plans.

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Even if you are not seeking funding for your project, I would still recommend writing a bed and breakfast business plan as it can be used to strategically manage your business as it gets up and running and starts to grow. 

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Are you considering opening a bed & breakfast?

Let me know in the comments.

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The Authoritative Bed and Breakfast Business Plan-Part 2 | Ep. #302

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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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The Authoritative Bed and Breakfast Business Plan-Part 2 | Ep. #302

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In our next episode, I will talk about How to Find the Right Location for Your New B&B.

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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-part-2-302

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“The Guide to Owning & Operating a Hospitality Property – Successfully” course.

https://KeystoneHPD.com/Course

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..The Authoritative Bed and Breakfast Business Plan-Part 2 | Ep. #302

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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

https://keystonehpd.com/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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https://youtu.be/GH_vSoW8oGs

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