Running a B&B? What every B&B owner needs to know when opening a B&B

What every B&B owner needs to know when opening a B&B

David Weston, chairman of the Bed & Breakfast Association and co-author of How to Start & Run a B&B, shares his tips for opening a B&B.

Get clued up on the rules and regulations

Firstly, don’t feel daunted by your lack of knowledge. No one starts a business as an expert and even experienced B&B owners will admit they don’t know everything. Opening a B&B is not an exam. After all, at the core of the business is people skills, which are not dependent on knowing any set of facts. In a word, it’s all about hospitality.

Having said that, it would be foolhardy and an unnecessary risk to start any business in complete ignorance. Having some basic knowledge before you start could save you some very expensive mistakes later down the line.

Malcolm Bell of Visit Cornwall calculates that there are 140 rules, regulations and requirements that apply to any business, of any size, that sells sleeping accommodation and breakfasts to paying guests. How can anyone stay on top of all that detail?

No one can, of course. So, two essential pieces of advice apply:

  1. Make sure you understand the practical basics of the most crucial (and costly) regulations – like those on fire safety and food hygiene.
  2. Plug yourself into a network of experience, resources and guidance that will help with everything else.

That is exactly what the B&B Association is here for – we were founded by B&B owners for B&B owners, to support, inform and represent you.

Learn how to market your business

So far we’ve only covered rules and regulations. Other need-to-know areas include marketing and distribution. In other words, the ways you can sell your rooms.

These days, those options are largely technology-based. So, to start successfully you will need at least a basic understanding of websites, booking systems and online travel agencies (OTAs) and how they can help your business.

You need to understand both the pros and cons of using these channels. They can bring in lots of business for you (at a price, often 15% or so) – but you need to be careful about keeping enough control over aspects like payments, cashflow and your deposit and cancellation terms.

Understanding the importance of deposits

“Always take a deposit at the time of booking” is one of the key pieces of advice provided in our book How to Start & Run a B&B.

OTAs will try to persuade you not to by saying you will get more bookings. This may be the case but your cancellation and no-show rates will rocket. A costly lesson many have learned the hard way!

Make sure you’re covered

You need to make sure you and your guests are covered should the unexpected happen. That means being properly insured.

Sadly, many people letting out a spare room don’t even think about insurance, so expose themselves to massive financial risk. If you take paying guests, you really must have public liability insurance designed to cover that – so look at a specialist B&B insurance policy from a reputable provider like Direct Line for Business. Get quotes and make sure you (and your guests) are covered.

Consider your suitability to the industry

Another thing most people don’t think about is: are you the kind of person who would enjoy running a B&B?

If you hate the idea of strangers in your own home, don’t go into this business. If you are untidy rather than house proud, can’t get up early or don’t like meeting people, then maybe the hospitality business is not for you. It’s better to figure that out early on, rather than learning a very expensive mistake too late.

Do your homework

Put together a budget. It doesn’t need to be hugely complicated but understanding the basics of your costs and how your room rates and occupancy levels will translate into profit is essential. You’d need to think about your tax position too and perhaps take advice on that. Again, there is a lot of advice on budgeting in our book.

Monitor the competition

Finally, know your competition: look at the area from a guest’s viewpoint. What accommodation is available, at what prices, and where is it? How will your new B&B fit into that – could you charge more, or will you have to undercut others? Should you pitch your business at the four-star level, or is the local demand for cheap and cheerful budget rooms? Try to speak to a few local B&B owners and gauge how well they are doing.

There is so much more I could say, but the key messages are: do your homework, write a budget, understand the main regulations, take advantage of the guidance and networks available, make sure you are properly insured, work hard – and finally, enjoy your new business!

David Weston, Chairman of the award-winning Bed & Breakfast Association, has over 30 years' experience in travel and tourism, is a Fellow of the Tourism Society (FTS), sits on the Government's Tourism Industry Council and is the co-author of the book 'How to Start and Run a B&B'.

At Direct Line for Business, we offer personalised insurance cover for your bed and breakfast or guest house.

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Added: 02 Jan 2019