Starting up a B&B
hock79
Forumite 224 Posts
Hiya, I'm after a bit of advice as to how to go about achieving our dream of running a B&B. Basically my DH and I currently own our own home (mortgage) and are currently overpaying and saving as much as we can. The house we live in currently is not where we want to run a B&B, plus it's too small and no one would want to stay there! So the aim is to sell it and buy a place that we can run as a B&B.
What we'd like is to get a bit of financial advice as to how much we need to save before we can start to actively look to buy. We are not going to be able to save enough to buy outright, and when we move at least one of us would have to work there full time so I assume we'd need a business loan of some sort (and a big deposit).
Would an IFA be able to advise us? Or would the business magager at our bank be a better place to start? We know it's a few years off yet so we're not sure if anyone would want to give us the time of day!
What we'd like is to get a bit of financial advice as to how much we need to save before we can start to actively look to buy. We are not going to be able to save enough to buy outright, and when we move at least one of us would have to work there full time so I assume we'd need a business loan of some sort (and a big deposit).
Would an IFA be able to advise us? Or would the business magager at our bank be a better place to start? We know it's a few years off yet so we're not sure if anyone would want to give us the time of day!
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The guy at the bank will try to sell you just about anything that is with his bank
You need a business advisor really.
One important thing that makes me nervous is given away in the line 'DH and I currently own our own home (mortgage)' - the bank effectively own your home, it's very important if you're going to be getting into business that you're explicit about these things (as you'll need to be explicit once you actually are trading)
I'm sure there are other B&B threads on here, but be aware it's no walk in the park - the proliferation of discount hotel chains has meant that people can get clean, comfy rooms cheaply, so you have to offer something more. Some people try to use domestic quality furniture (cheap beds and mattresses, dressing tables, etc) which means you can date pretty much when they went to Ikea by the fashions of the time. And domestic stuff isn't hard wearing enough for commercial use. If a guest comes and has a soggy bed, rickety drawers, or a dirty room etc., they will just use the soulless hotel next time.
have a look at https://www.airbnb.com
To overpay CC by £1,000.
Overpayment to date : £310
2nd Purse Challenge:
£15.88 saved to date
Completed: TWO adult cardigans, 3 baby jumpers, 3 shawls, 1 sweat band, 3 pairs baby bootees, 2 sets of handwarmers, 1 Wise Man Knitivity figure + 1 sheep, 2 pairs socks, 3 balaclavas, multiple hats and poppies, 3 peony flowers, 4 butterflies ...
Current projects: pink balaclava (for myself), seaman's hat, about to start another cardigan!
It's also important to look at what other hotels/B&B's are charging.
I personally know of a young couple who run a B&B from a rented property (by owners, who previously ran it as a B&B) and are making a good living out of it. This is just off the airport that will replace parts of Heathrow in the next 10 years.
CK
Please note: All posts on Coronavirus legislation refer to England unless specified otherwise.
I can spell, my iPad can't.
In reality, it's damn hard work, in effect 24/7.
You have to do a proper business plan, not something from a template site. If you don't know how to do it, engage a professional who can drill down into the sector, knows what they are doing and produce the correct figures. If you think you will need a £1, you can guarantee it'll be £1.35. Some might suggest some template sites, but they do not ask the questions. You will need to produce at least 130 pages, anything less and the research has not been done.
You have a mine-field of legislation to comply with too.
Finally and something we found, location, market, location, market, location!
Btw, their business thrived, an extension is in the planning.
Surely that's kind of a 'how long is a piece of string' question. It would depend on what kind of property you were looking to use for the b&b, how much deposit you needed to put down on it if you weren't planning on buying outright.
How many bedrooms it will have, how you're planning on furnishing them and how much that will cost, communal areas needed such as lounge and dining room and how much they will cost to furnish.
Where you're planning on advertising and what marketing you're planning on doing and again how much that will cost.
What your rates, mortgage (if applicable), bills, insurance etc will be and what you need to cover them for at least the first few months as you don't know when you'll start getting an income in from the rooms.
Do you need to hire additional staff, for how many hours and what will you be paying them? What you are needing to get in for meals for the guests etc?
What backups do you have in place if you're in a seasonal area for covering the quiet months and what money will you need to cover that.
These things are going to vary drastically from one b&b to another so you really need to be doing your research on it. It's a very competitive business and the ones that fail first seem to be the ones who jump in without fully looking into everything.