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The Cost of Operating a Bed and Breakfast In 2019

The Cost of Operating a Bed and Breakfast In 2019

You’ve dreamed of quitting your job and opening your own bed and breakfast in a beautiful part of the country on a little bit of land. You can’t wait to cook your signature dishes for others and meet the multitude of people coming through your doors.

Starting a bed and breakfast is a great idea, plus you get to be your own boss and work from home. But it is also a business that you need to turn a profit.

In this article, we look at the cost of operating a bed and breakfast in 2019, so  know just what you need to succeed. 

Your Startup Costs

Let’s begin by looking at how much money you’ll need upfront. This may come from your own savings, or perhaps you have some investors. Either way, you want to know what you can expect.

In addition to these initial costs, you can also expect things to go over budget, so you always want to have a cushion built in.

  1. You will need several types of licenses to open your bed and breakfast. These may include building permits, renovation permits, food and alcohol permits, motel licenses if you have enough rooms, sales tax permits, as well as other annual licenses. These can range anywhere from several hundred dollars to many thousands.
  2. Interior renovations will cost money especially if you are remodeling. You also have to make sure your plumbing and electrical are up to code. In addition, consider the soft touches like paint, bedroom furniture and accessories, bathroom accessories, and living area furniture such as your dining room and sitting rooms. Plan for a minimum of $10,000 depending on your plans.
  3. Exterior renovations such as painting, landscaping, and even roof and window maintenance. You’ll also need patio furniture and landscaping. Don’t forget your front entrance area as well. And, you’ll need a sign or two. Expect another minimum of about $10,000 here depending on your needs.
  4. You also need mattresses, bed linens, pillows, blankets and towels. Guests expect more in a bed and breakfast, so you want to invest in the nicest you can afford. Also, consider a variety of pillows to suit each of your guests. For costs here, you can expect at least $500 per room. You will also want to factor replacements into your budget as this will happen often.
  5. Items for your kitchen are vital and need to fit the atmosphere and quality of your bed and breakfast. You need plates, glasses, silverware, napkins, placemats, serving dishes, cooking pots and utensils and other items including coffee pots and mixers. Your costs will be between $500-$1000 for these items, depending on quality.
  6. Food costs are also part of your operating costs. Plan your meals, research the costs and put together a budget. Don’t forget to factor in wasted or spoiled food as well as the seasons.
  7. Don’t forget security. This includes smoke detectors, fire alarms, door locks, and a security system. You are required to provide these items, and your guests expect security. For everything together, budget at least $1000. You’ll also need to factor in monthly fees and replacement batteries.
  8. Your business expenses are part of your budget, too. Think a computer system, computer security, a printer, a website, social media set up and management, software, point of sale system, paper, pens, and ink cartridges. Costs for all of this varies, but plan on at least several thousand dollars.
  9. You also want to put some marketing dollars in your budget. Plan for a few thousand dollars to get your marketing off the ground. You will want to create a monthly budget for marketing, and this is dependent on your guest capacity.

Bed and Breakfast

Acquiring Start Up Financing

Many new bed and breakfast owners sell their own homes to invest in a larger property they can convert into a bed and breakfast.

This is the best of both worlds for owners as they can live and work in one place.

The other option is to retain your primary residence and buy another property to set up your bed and breakfast.

While you might be able to afford both, many people look to outside financing sources. This may be in the form of a bank loan or an angel investor.

If you are buying a new property, you will need a large influx of cash to convert the residence into a bed and breakfast. says that a good rule of thumb is $20,000-$40,000 per guest room for a small bed and breakfast and $35,000-$50,000 for a large property. These costs also factor in the items we mentioned above along with the remodel.

When asking for investors, you can use these sums to help you, but don’t forget to add a large cushion for those unforeseen circumstances. Think pipes breaking, roof damage, structural damage, termites, and other issues.

Will You Make Money?

This is a good question and one to consider along with your cost of operation.

Let’s look at the following facts:

  • You operate a five-room bed and breakfast.
  • Half the year, you charge $100 per night, and half the year you charge $150 per night.
  • With 365 days in the year, that’s 1,825 room nights.
  • If you book every room every night (which you won’t), that is $231,125 per year. If you figure a 50% occupancy rate, that’s a bit over $115,000 per year.
  • Once you’ve factored in your expenses and taxes, your net income will drop.

So, considering those facts, you can decide how big a property to set up and how to manage your costs for your success.

Final Thoughts

In the United States, the bed and breakfast industry is expected to top five billion dollars in 2020.  In addition, there are nearly 20,000 bed and breakfasts across the country.

That’s a lot of small business owners making their dreams come true. It does pay to be prudent with your budget though. With an average occupancy rate of about 43%, you want to stay on top of your budget to succeed during your slower months.

You can make money running a bed and breakfast, but it depends on the size of your property, the area you’re located in, how nice your place is, and how well you manage your budget. (tweet this)

If you decide running a bed and breakfast is the job for you, start planning and budgeting now so you can manage the cost of your operations.

You’ll soon find yourself sipping coffee with your guests and pointing out the best  places to see in your town.

Looking to showcase your hotel? At Hotel Propeller, we build functional, beautiful websites that highlight your hotel to help you stand out in the crowd. You’ll find everything you need to attract guests to your website and compel visitors to make a reservation. Take a look at our showcase and contact us today.

 Images: Jason Briscoe and Alex Block on Unsplash

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