Selling a B&B

gingercordial

Old_Ian wrote: »

The filling of rooms can vary on time of year, weather and if folks feel financially confident to have a few days away.

As I'm sure you know the turnover of the business will be based essentially on two sets of factors:

1. The ones inherent in that business, ie the things you can't control. That's your list above - weather, the economy and so forth. Added to that are the ones specific to your location - popularity of your town for holidays, number of rooms you have, and the local market for B&B prices (you can't be charging double what other local B&Bs charge if you're offering the same level of facilities).

2. The ones which are under your control, ie the ones where you've said maybe you weren't pushing so hard. How much advertising you're doing, whether you're going all out to really fill the rooms, how much time off you've wanted, could you upgrade the rooms to get a higher price and so on.

A potential purchaser will need to understand both elements - what's the "baseline" from set 1, and what can they do to enhance that from set 2.

You should absolutely be disclosing your turnover from the outset - it is a completely normal first question for them to be asking. But, along with that, explain as you've done here with an honest and credible answer that there are lots of ways that could be improved by the right new owner. Essentially give them the turnover from set 1 and sell them on what they could do from set 2.

Old_Ian

Just wanted to thank you all for the answers on my question about selling the B&B.
Reading back it looks as if we (the wife and I) had lost track of what we was trying to achieve.
I cannot think just how we got there but unfortunately we did.

mchale

Why not quote any interested parties your occupancy rate.

Thrugelmir

Who valued the property/business? Did you give them access to your accounts?

MobileSaver

Old_Ian wrote: »

we do not know how to give a respectful answer that suggests that perhaps may not be question that should be asked at all.

If you are selling a business (which you are) then turnover is one of the fundamental pieces of information that you should make available.

By all means give the figure and then explain the reasons why it is low and how you think a new owner can significantly increase it but anything other than a truthful, unequivocal turnover figure is wasting your viewer's time and energy and yours.

martindow

Do the agents you are using normally sell commercial properties? If they are selling flats and houses most of the time they might be inexperienced or even clueless about how to market your B&B. Normally turnover would be included in the listing.

PasturesNew

Turnover is THE key question for anybody buying it as a business - as that's where the value can be calculated.

If, say, you said "we have 6 bedrooms and the turnover each year is £90k and they're mostly repeat customers so we don't advertise. We have automated online booking and our facebook page is full of shared images from happy past customers" then a buyer will see that as different to "well, we have a turnover of £8k because we rely on people passing and being able to see the wonky sign from the road; we have no website, no facebook page, no IT systems and no online booking provision"

In the first instance they know they can move in and run it as a business.

In the second instance they know they'd have a LOT of work ahead of them to turn it into a £100k T/O business ... which is what they were really looking for as they figure that'd make them £20k/year each.