Starting a B&B

27 April 2005
Starting a B&B

Running a B&B can be a really rewarding way of getting extra income out of your family home. It's less effort than running a full-on hotel, requiring only one cooked meal to be served. Once the beds are changed, you've usually got the rest of the day free. For many it's the ideal job in hospitality.

As long as you're renting out fewer than six rooms, you fall into the B&B category - more than that and it's considered a hotel, with more regulations and legislation to take note of.

There are plenty of guides around about starting a B&B - check out your local bookshops. Here's a link to get you started:

If it's your first time as a business owner, there's some valuable advice on the Government's website on how to start up.

The big picture

Location, location, location

B&Bs exist almost everywhere, but clearly it helps to know what your particular location has to offer. Often the idea of starting a B&B comes while prospective buyers are looking at houses, so be sure you think about the purchase with a business head.

Research the local area. Are you close to a major tourist attraction? Near a large factory that is likely to have frequent visitors, domestic or foreign? In a major city where transient workers are likely to provide weekday business and tourists will fill up the weekends? Are there other B&Bs in the area? It's good if there are, as it means there probably is already a demand.

The big idea

While B&B is a fairly straightforward concept, there are many variations. You could theme the rooms; offer an exotic breakfast menu as well as the standard English; cater for different nationalities at breakfast depending on your location and the demand - really, the sky is the limit.

To inspire your imagination take at look on the internet at what other B&B owners do, both in the UK and abroad.

Here's one example from Belgium, where a couple of documentary film makers offer director-themed bedrooms, and breakfasts that far surpass the norm. There are facilities to watch a huge selection of films, and they'll organise regional foods for picnics or dinners as an added extra.

Carry out some market research to see if your idea is going to work in the area.

Financing your dream

In most cases this may be as straightforward as obtaining a mortgage; however, you may need to include a business plan showing the income you predict the B&B will bring in to convince the bank to lend you the money.

There are plenty of sites that will help you build a business plan, and you should look at a few before starting.

Most of the high-street banks have pages on their websites with advice on starting a new business. The Royal Bank of Scotland's includes information on writing a business plan, what loans banks give out, and other sources of income

You need to be realistic with your financial projections and work on a three to five-year plan to seeing profit from the business.

If you're still struggling for financial assistance, there are grants and advice from a variety of bodies -

Down to the detail

You've acquired the house of your dreams and now need to set about opening up as a B&B.

Money matters

Unless you or your partner is trained in financial bookkeeping, an accountant is a truly good idea. If nothing else, they'll help you identify the tax breaks that having a business from your home can offer. Ask fellow B&B owners if they use an accountant, or ask other local businesses for recommendations.

You may not need to worry about VAT, depending on the size of your turnover - but check it out to be certain.

The standard advice is to do as much yourself as possible in the early days. However, you may need part-time staff, in which case you'll need some form of a payroll system to keep track of it all.

Making it look pretty

With any property purchase a survey is highly advisable - it helps avoid unpleasant surprises later on. You may have lots of refurbishment to do - if you possibly can, try to get the business side of the property up and running first. It may not be so comfortable for you, but will bring in much-needed income to help finance the rest of the job.

By all means stamp your style on a property, but try to think about what your target market will like, too. Purple and black walls may not be to everyone's taste, and as you're trying to encourage repeat business it's a good idea to have a wide appeal. That said, small businesses can get away with being a bit more quirky than their large counterparts, so have some fun too.

Legal eagle

Whatever you do, don't fall foul of the law by being ignorant of legal requirements for the business.

Your solicitor can advise you about any areas that you are unsure of. You are unlikely to need a licence, although some B&Bs have a small bar and, therefore, do require a licence.

Planning permission may be a requirement if you are converting existing rooms, and there are fire requirements such as fire doors and fire alarms. Make sure you speak to the local authority planning department and the local fire officer to work within the law.

Insurance may be dull, but it is essential. Think buildings, contents, fire, public liability and employee liability insurances - and that's just to get you started.

And don't forget there is now the Disability Discrimination Act, which affects access to all public buildings by the disabled, so be sure that any plans for alterations take these new requirements into account.

For more information

Disability Rights Commission

There are crucial legal matters which fall into the following categories:

Food hygiene

You may be cooking only one meal, but you need to be sure that you conform to food hygiene standards - that's both your kitchen and you, personally.

It's probably a good idea to call the environmental health officer to come in for a chat and tell you what work needs to be done. EHOs are there to help and on the whole are happy for you to consult them early, before a situation gets out of hand.

The Food Standards Agency produces a downloadable booklet on things to be considered when opening a new catering business.

There are legal training requirements for anyone handling food, and you must make sure any staff you employ are trained to the correct standard.

By 2006 it will be a legal requirement to demonstrate tangible systems - ie, documentation, rotas and schedules - for HACCP (hazard analysis, critical control points) procedures. So it's best to put the systems in place while setting up the business.

If you're opening in Scotland, follow this link to find out about food hygiene regulations there

Hiring staff

Don't fall foul of employment laws - eg, discrimination. This is an area that is constantly evolving. From 2006 it will be illegal to discriminate on the basis of age. Candidates can take you to an industrial tribunal if they feel they've been discriminated against at the recruitment stage, so be aware of your obligations and their rights.

Also make sure you know what female, and male, employees are entitled to in terms of maternity and paternity leave and pay.

And if the employee isn't working out, know the correct way to go about firing them.

For more information on writing job advertisements, writing a job description, hiring staff, writing job-offer letters, setting up employee appraisal schemes, and if it all goes wrong, firing them, click on HR.

Shout about it

Marketing your B&B is vital to pull in customers. This isn't just about advertising, which can be expensive and may not target your market accurately.

You'll need a marketing plan to help you budget for expenditure. Here are just a few ideas for marketing your new B&B:

Even if you can't afford someone to do publicity for you, know the basics yourself and put them into action. [link to public relations: a basic guide]

There are lots of guides to B&Bs - find out what they charge and what is involved in being listed.

You may decide that it will be easier to join an agency and have them market your property for you. There are several agencies listed on VisitEngland's website

Make sure you contact the local tourist board to tell them you're opening and get on their books as a potential accommodation provider in the area. Be aware that most tourist boards will want you to join, and there can be considerable fees involved and specific criteria on what must be included in your product.

Network locally, joining business associations and local chambers of commerce. This includes supporting local activities, which can win you valuable publicity and goodwill.

Your local paper may be interested in running some editorial on your property if you're offering something out-of-the-ordinary for guests.

In today's internet age a website is crucial and can be a great sales as well as marketing tool.

Having an official opening can help generate local interest and awareness of your business - invite any of your financial supporters, friends, family, local journalists, dignitaries, and anyone who has helped out in the start-up process. In addition to being a good way of thanking them for their help, they are all potential customers and are also likely to tell their friends about the hotel.

Contact local companies to see if they require B&B accommodation for their guests. Invite the person responsible for booking such accommodation to your premises for a look round. Holding a wine and cheese evening or similar event might encourage them. You might consider offering the company a discount if they can promise a set number of bookings over a period of months.

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