Starting a B&B might be a great option for someone who is fond of hospitality and wants to be their own boss. But just like any other business, starting a B&B can be quite challenging.
So, what does it take to start this business? What is B&B owner salary?
In this guide, let us see all the aspects of starting this business, right from investment to profitability!
What Is Bed & Breakfast?
A Bed and breakfast or B&B is a small accommodation property that usually has less than ten rooms in it. Such property type is generally operated by a small team or a family who also live on the site.
B&Bs are ideally suitable for a weekend getaway, a romantic trip, a small wedding, and other special occasions. Guests staying in such a property can expect a homely atmosphere, local culture and history, authentic food and beverage, simple luxury, and more.
Is Owning a B&B Right For You?
Owning a B&B is not easy, and it requires a lot of time, energy, and dedication. So before making a decision, you should ask yourself some of these questions:
- Can you deal with pressure?
- Do you love interacting with people?
- Are you a multi-tasker?
- Do you enjoy mundane tasks such as cleaning and cooking?
- Do you want to be your own boss?
The idea of owning a B&B might seem dreamy, but there is a lot more to it than this. Your income will not be consistent, and you will have to deal with tough situations and customers, among other things.
Once you consider all the necessary things and still feel excited and confident, then it’s time to learn about the investment and profitability of B&B business.
Costs To Consider Before Starting a B&B
Whether you are turning your home or an existing property into a B&B or whether you are buying a new one, the cost to start a B&B can vary greatly.
Some of the most common expenses that a B&B owner needs to bear include, but are not limited to:
Insurance is one of the most critical expenses you shouldn’t overlook when starting a B&B. If you want to protect yourself and your business against massive unexpected expenses, you must insure your business.
In a hospitality business, what looks good sells well. So, in addition to getting landscaping, painting, and other exterior beautification done.
You must also set up comfortable and aesthetically pleasing room furnishings in all the rooms to provide the best experience to your guests.
Nobody likes dirty or torn linens, so you must keep a stack of linens stored and replace them from time to time.
All your linens should be pristine and clean always, and getting them washed and changed should always be your first priority.
This is the time of digitalization and marketing, and without it, no business can survive for too long. So, make sure you get a website ready for your business.
Developing a website requires a good amount of money, and there is also the cost of updating and maintaining it. But it is necessary to make sure you have a website in place.
You will obviously require cutlery, glassware, plates, etc., to serve your guests. And since cutlery is prone to damage, you will also need to maintain a good stock of the same.
Apart from this, you will also need cleaning and cooking equipment.
There are a lot more costs that are associated with opening a B&B, so make sure you do your thorough research to be ready.
How Much Does It Cost to Start a B&B?
Starting a Bed & Breakfast can cost you anywhere between $75,000 to $300,000 or even more, depending on the property type.
Buying a house in a good location can be pricey, and getting an existing property renovated also costs a lot.
Here’s a basic calculation of the expenses in starting a B&B:
|Setting up a business name and corporation
|$150 – $200
|Licenses and permits
|$100 – $300
|$100 – $300
|Business cards and brochures
|$200 – $300
|$1,000 – $3,000
|Large home down payment
|$50,000 – $200,000
|Renovations, furniture, decor
|$25,000 – $100,000
|$76,550 – $304,100
Pros & Cons of Starting a B&B
Pros of starting a B&B
- High profit margins
- You get to be your own boss
- You get to interact and build connections with people
Cons of starting a B&B
- Little alone time if you have a B&B in your own home
- High start-up cost
B&B Owner SalaryThe B&B owner salary varies greatly depending on the size of your B&B, its location, reviews, and many other factors, so it is really hard to pinpoint the exact amount B&B owners make.
However, according to sources, the annual revenue of B&B owners is approximately $2,600,000 on average, and after deducting all the expenses, the B&B owner gets to keep anywhere between $60,000 – $80,000 on average.
Payback Period Of Bed & Breakfasts
The investment in Bed & Breakfast is $304,100, and the yearly profit is $60,000. So, to find out how long it will take to earn back the initial investment:
Payback Period = Investment / Yearly Profit = $304,100/ $60,000 = 5.06 years
Based on these figures, it will take approximately 5 years to pay back the initial investment for Bed & Breakfasts. This time period could be longer or shorter depending on your sales, revenue, and profit figures.
Are Bed & Breakfasts Profitable?
Any business, when carried out properly and strategically, can generate profits, and so can Bed & Breakfasts.
Owning a B&B is not a “get rich quick” scheme but rather a slow process that requires you to build trust and reputation among customers in order to grow and make more money.
In the end, the income you generate from B&B depends on how many nights and the number of rooms you can sell in a year.
For example, Suppose you have a B&B with six rooms, and the tariff for each room is $100 per night. If all your rooms are sold out for a day, then you will make $600 in a day.
At this rate, if you are able to keep all the rooms booked for each night in a year, then you will end up with approximately $219,000 in revenue.
However, this is just the best-case scenario. In reality, selling out all of the rooms for all the days in a year is a bit unrealistic. On average, most of the B&Bs are able to get 50% occupancy, which takes down the annual revenue to $109,500.
But this is still not your net profit. There are a couple of expenses that you’d have to deduct, including tax, maintenance charges, utilities, insurance, food, etc.
After deducting all the expenses, you would finally get to make roughly $60,000 per year on average.
So yes, B&Bs are profitable, and in the end, the income you generate largely depends on your property, number of rooms, occupancy rate, etc. You can make more or less than this average number.
How Much Should I Charge For a B&B?
The prices for B&B typically range from $85 to $250 a night, with an average of $170. So you can set up the price for your B&B as per this.
While setting up prices for your Bed and breakfast property, you need to consider costs like mortgage, food and cleaning supplies, taxes, etc.
You can save a lot on labor costs if you do the work yourself or get help from your family members.
How To Start a B&B?
Mistakes To Avoid When Starting a Bed & Breakfast
When starting a Bed & Breakfast without any prior experience in hospitality, there are plenty of pitfalls you will encounter. However, here are some mistakes you must avoid at all costs:
- Not doing enough research: You are most likely setting yourself up for failure without proper research. Make sure to research the area you want to open a B&B in, get to know your competitors and their pricing, and learn about your target market and what they might expect from you. All this information will allow you to strategize your business properly.
- Underselling & Overdelivering: You might be excited to deliver the best service to your guest at all times, at times even at the cost of your profit margin. This might earn you a good rating, but it won’t sustain you for long. So make sure you raise prices whenever necessary.
- Opening doors too soon: You might be tempted to open doors as soon as possible, but opening the gates of your property before you are truly read can lead to poor first impression and professionalism. This would straight away give a poor reputation right at the beginning.
- Not staying up to the trend: Using medieval technologies could ruin the experience of your guests or can simply make things difficult and time-consuming for you. Invest in property management systems and have a payment system in place for smooth functioning.
- Not having guest policies: Have clear guest policies so that no guest can take advantage of you and so that you can stay away from awkward situations. Make sure you send a guest policy to your guests before arrival so that their limitation is set at the start.
B&B Owner Salary: Wrap Up
Starting a Bed and breakfast not only requires great people skills but also a lot of money.
A B&B owner salary could vary greatly depending on the type of property, location, popularity, reviews, and much more.
In the end, this could be a great business opportunity for those who love hospitality, are good at handling pressure, and are willing to give their time and energy to this business.
B&B Owner Salary: FAQ’s
What is the difference between a B&B and Boutique hotel?
B&B is often a private residence with the owner of the property staying at the same place. Whereas a boutique hotel generally has more rooms, and guests staying at the property generally receive professional service round-the-clock.
How many rooms does Bed & Breakfasts have?
The number of rooms in a Bed & Breakfast property can vary greatly. Some of them have three rooms, while others have up to twenty rooms.
What is the difference between an Airbnb & Bed & Breakfast?
Airbnb is an online platform using which users can rent a property or a place, be it a villa, a home, flats, etc. Whereas Bed & Breakfasts are properties owned by an individual and converted to accommodate guests for an affordable price.
Where is Bed & Breakfast headquartered?
The headquarters of Bed & Breakfast is located in Brittany, France.
Who is the owner of Bed & Breakfast?
Bed & Breakfast is owned and operated by a family or small team who live on site.