A bed-and-breakfast business can be a profitable enterprise but there are some important decisions to make and things to do to ensure that your new venture is on the road to success. It is a good idea to learn more about any licenses and permits and furniture and equipment you will need, etc. Obviously, if you need a business loan, it is important to have a detailed business plan.
Things to Consider
Think of details such as security and safety, shared or private baths, guest rooms, etc. For guest rooms, there is plenty of choice when it comes to types of beds, including waterbeds, king, queen, double, and single beds. It all depends on capacity, size, potential customers, location, and other factors. Check whether the floor is warm enough and make sure you have enough linen for periods when your B&B is at full capacity.
Permits and Licenses
The types of permits and licenses you need vary from one location to another. In Vancouver, for example, bed-and-breakfast businesses pay a Development and Building permit fee. You are also limited to a maximum of 4 guests and 2 bedrooms.
Equipment and Supplies
As a B&B businesses, you will need equipment, utensils, and supplies such as linen, towels, lighting, furniture, safe deposit boxes, coffee kettles, etc. The list of equipment and supplies also includes things like hair dryers, trash cans, disposable hotel amenities, laundry supplies, kitchen appliances and cookware sets, and so on.
Choice of Location and Factors That Play a Role
Location is very important for your bed-and-breakfast business. Consider factors such as foot traffic, subway and road accessibility, road and public service infrastructure, and access to tourism sites, landmarks, and places of interest. Other factors to take into account include permits, land costs, construction materials, competitors in the area, and where visitors come from.
Whether applying for a government-sponsored loan or a loan from a private provider, it always pays to have a detailed business plan. This is a way to convince financial institutions that you really want to make things work and put every effort to this end. A business plan normally consists of different sections on your company structure, products or services, competitors, market, and so on. The section on potential customers (customer analysis), for example, includes details such as behavioral analysis and socio-economic, demographic, and geographic factors. It is also a good idea to include competitive and industry analysis, including current market and industry trends, competitors’ market share, weaknesses, and strengths. Basically, what you offer is a SWAT analysis. You may want to include a section with your strategic plan and details such as revenue management, distribution, and marketing. Your operations plan covers things like staff experience and background, responsibilities and job descriptions, suppliers, service standards, and so on.
Types of Financing
With a good business plan on your hands, it is time to look for financing with affordable rates. The Canada Small Business Financing Program is always a good place to start your search, and many finance companies, credit unions, and banks participate in the program. The list is long and includes major players such as Scotiabank, Gulf and Fraser Fishermen’s Credit Union, Bank of Montreal, Vancity Capital, and many others. Financing under the program comes with lower than average rates. A second option is to apply for a secured or unsecured business loan through a local or big bank or another financial establishment. A secured loan, for example, is a better option if you need a larger loan with a long repayment period and a lower interest rate. To this, banks require that borrowers pledge a valuable asset, which can be equipment, land, or anything else. Financial institutions also offer mortgage loans and in this case, your bed-and-breakfast place can serve as collateral. Other products to look into include business lines of credit, credit cards, start-up loans, and more.