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What is a Bed and Breakfast business?
Approximately 1.8 million people in the UK stay in bed and breakfast accommodation every year in the UK. Bed and breakfast accommodation, more commonly known as B&Bs, is a British institution and is found everywhere – in big cities, small villages and the middle of the countryside.
A B&B is a small type of guest accommodation that is usually run by a couple, a family or a small team of staff. The owners or staff usually live on-site, although their living area will be separate from the guest accommodation to ensure guests have privacy. B&Bs offer accommodation for sleeping, usually a private bedroom with or without an ensuite bathroom, breakfast the following morning and cleaning services, all included in the price.
Some people now call B&Bs boutique hotels or guest houses. The term B&B typically refers to the experience that appeals to people – guests can communicate directly with the owners and have a more personal, comfortable and intimate experience. B&Bs offer a more homely atmosphere with simple luxury. They are most popular for weekend breaks and romantic trips.
Many people convert and open their homes for paying guests, although that is not always the case. Some people purchase separate accommodation to use as a B&B. Most B&Bs offer 10 rooms or less, although there are also smaller and larger B&Bs.
There are different types of B&B accommodation available:
- Homestay/host home accommodation: This type of B&B is set up in the B&B owner’s home. It may include both ensuite and non-ensuite bedrooms.
- Country inns: These B&Bs are often connected to pubs or restaurants. The sleeping accommodation may be above the eating establishment or connected in another way.
- B&B cottages: These are usually detached cottages or other detached buildings that offer guests more privacy. They are usually situated on the owner’s land.
- B&B hotels: These offer the same services and experience as a traditional B&B but usually on a larger scale.
There are many different responsibilities associated with running a B&B business.
These could include:
- Cleaning guest bedrooms in preparation for their arrival.
- Changing bed sheets and making the beds.
- Preparing, cooking and serving breakfast each morning.
- Keeping communal areas clean and tidy.
- Handling bookings.
- Advertising and marketing.
- Ordering food supplies and cleaning materials.
- Providing advice and recommendations to guests.
- Ensuring the B&B complies with all legal requirements.
For your bed and breakfast to succeed, certain personal qualities will be extremely beneficial. If you are considering opening a B&B business, consider the following factors:
- Do you have good organisational skills?
- Do you remain calm under pressure?
- Are you good at cooking and cleaning and will you be happy to undertake these tasks daily? If not, do you have the means to hire someone to do these tasks?
- Do you have a friendly and personable manner? Will you be good at dealing with potentially difficult guests?
- Are you knowledgeable about your location?
- Are you willing to try new strategies, techniques and technology to make your business succeed?
If you answered yes to the above questions, it is likely that opening a B&B will be a good business decision for you.
Types of customers
Identifying your target market and the typical customers that your business is likely to attract is a key step when creating your business plan and setting up your business.
B&Bs tend to focus on one specific market, and this will be represented in their pricing, amenities, space, décor, food, service and the overall quality of the accommodation. The most popular markets are:
The budget market refers to the cheapest B&Bs. To account for lower income per guest, costs are cut elsewhere (in order to maximise your profits). For example, budget B&Bs usually offer a basic breakfast, may have less space, the furnishings and décor may be simpler and some or all of the bedrooms may not offer a private bathroom. A budget bed and breakfast may also have no communal spaces or outdoor space and there are less likely to be special ‘extras’ offered to the guests, such as a welcome drink. Budget customers usually want to spend as little money as possible while still staying in quality accommodation.
Mid-market B&Bs usually offer more space than budget B&Bs. All bedrooms will likely have a private bathroom and the accommodation may be more stylishly designed. Mid-market B&Bs may also offer extras, such as free parking, free Wi-Fi and TVs in the bedrooms. This type of B&B will likely target customers who are happy to spend a little extra money on their accommodation.
The luxury market is usually the highest-priced accommodation. Customers will expect you to have a high guest rating, more spacious rooms and luxury furnishings and décor. Your guests will also expect more amenities, such as individual tea and coffee facilities in each room, premium bathing facilities and an outdoor area. Some luxury B&Bs offer amenities such as a swimming pool or hot tub, which allows them to compete with hotels. They will likely also offer a more extensive breakfast menu, with multiple choices and a range of beverages to choose from. The luxury market will expect food to be of a higher quality, for example, organic food from a local farm. If you open a luxury B&B, the service expectations will likely be higher, with some guests having specific demands. Luxury customers are usually happy to spend more money to stay in the best accommodation.
The type of customers your B&B business is likely to attract also depends on other factors, such as:
Are you located in a city, a town, a village, the countryside or by the coast? Are you close to a monument, an area of interest or another popular location? Does your property have good transportation links, for example, are you close to a train station? Bed and breakfasts in certain areas will automatically attract certain types of customers and this is an important factor to consider when planning your business. For example, a B&B near Lake Windermere in the Lake District is more likely to attract nature lovers and couples, whereas a B&B near the O2 Arena in London is more likely to attract concertgoers.
This is connected to the type of market you aim to target (e.g. budget, mid-market or luxury) but can also be connected to other factors, such as location, demand, competition, advertising strategy, advertising platform and amenities. Consider your target customers when determining your pricing policy.
Your guest reviews
This is an important factor that will persuade potential guests to book your property. B&Bs with a higher review score and a large number of reviews are more likely to attract mid-market and luxury customers who are willing to spend extra money.
Advertising includes the advertisement platform you choose and whether you have your own website. Most potential guests will look at many different properties before choosing which one to stay in and your property description and the photographs you choose will be key factors in their decision. B&Bs that employ professional photographers and a website designer may be more likely to appeal to higher-end guests.
Equipment You Will Need
Your equipment needs can vary, depending on the type of bed and breakfast accommodation you set up. Your required equipment can include furniture, accessories and other equipment that is essential to the running of your business.
You will likely need to purchase multiples of the same furniture, to equip each guest room. You may need more or less equipment, depending on the size of your B&B, the number of bedrooms and the number of guests you can accommodate at one time. You may not require or have the space for all of the equipment listed below; however, this is an extensive list that can be used as a guide.
The equipment typically required by a bed and breakfast business includes:
The type of equipment you will purchase for your guest bedrooms will depend on the type of B&B you are running and how much you are willing to invest. You can choose to purchase everything from the list below or opt to purchase only certain equipment and furniture.
- Beds (double beds, twin beds and/or king beds).
- Good quality mattresses.
- Mattress toppers.
- Duvets and pillows.
- Sheets, duvet covers and pillow covers.
- Additional blankets (particularly for winter).
- Curtains and/or window blinds.
- Wardrobes and drawers so guests can store their personal belongings.
- Bedside tables.
- Ceiling lights.
- A safe.
- A television.
- A kettle and/or coffee machine.
- Coat hooks.
- A desk and desk chair.
- A mirror or mirrors (you may opt for multiple mirrors of different sizes, e.g. a full-length mirror and a beauty mirror).
- Armchairs or other seating (if you have the necessary space).
- Slippers and dressing gowns.
- A rubbish bin.
- A door lock.
- A hotel phone system (for contacting reception and other guest rooms).
You will need to equip each bathroom individually. If your B&B has private, ensuite bathrooms, you will likely be able to store all equipment and accessories in each individual bathroom. However, if any of your guest rooms share a bathroom, you may have to place items such as towels and soap into the bedrooms for the guests to transport to the bathroom themselves.
The most common furnishings and equipment for a B&B bathroom are:
- A toilet.
- A bath with hot and cold running water.
- A shower with hot and cold running water.
- A sink with hot and cold running water.
- Guest towels (you may need multiple sizes, e.g. bath towels, hair towels and hand towels).
- A towel rack.
- A bath mat.
- A toilet brush.
- A plunger.
- A mirror.
- A toothbrush holder.
- Soap dispensers.
- Toilet roll holder.
- An extraction fan or other ventilation system.
- A door lock.
- An emergency call button.
- Toilet paper.
- Toiletries, such as hand soap, shampoo, conditioner and shower gel.
- Paper towels or a hand dryer (for communal bathrooms).
- A rubbish bin.
Kitchen equipment is a necessity for B&Bs as your guests will expect to be offered breakfast as part of their stay. You may offer a menu or provide a selection of prepared food for guests to help themselves to. Depending on the price of your B&B you may offer a variety of hot food or may offer cold, pre-prepared foods, such as cereals and baked goods. Your kitchen equipment requirements will depend on the type of food you will be preparing.
Some typical equipment required in a B&B kitchen includes:
Kitchen appliances: If you are using your existing kitchen as part of your B&B, you may be able to use your existing appliances (as long as they comply with all legal requirements). However, if you are setting up a new B&B business, you may need to purchase all of your appliances. Some kitchen appliances you may require are:
- Fridge and freezer.
- Oven, stove and grill.
- Kettle or other tea and coffee making facilities.
- Food processor/blender.
Cleaning equipment: A kitchen requires separate cleaning equipment from the rest of your property. This equipment should be stored separately and clearly labelled. You will need different cleaning materials for different parts of your kitchen and different tasks to prevent cross-contamination. See the list below for a list of cleaning equipment you may require.
- Cookware: This can include:
– Saucepans and frying pans.
– Baking trays.
– Roasting pans.
- Cooking utensils: These can include:
– Tongs and ladles.
– Stirring spoons, wooden spoons and spatulas.
– Measuring cups.
– Graters, tin openers, and mashers.
– Kitchen knives.
- Rubbish bins and food recycling bins.
- A handwashing sink.
- Kitchen accessories, such as:
– Colour-coded chopping boards (for chopping different types of food).
– Food thermometer.
– Cooking timers.
– Aluminium foil, greaseproof paper, baking paper and clingfilm.
– Food labels.
This is the area where your guests will eat their breakfast and any other meals your B&B offers.
Some of the equipment you may require are:
- Dining tables and chairs.
- Table cloths.
- Table settings, including mats and coasters.
Eating accessories: You will need to buy equipment and utensils for your guests to eat and drink from.
This will likely include:
- Plates and bowls.
- Glasses and cups.
- Knives, forks and spoons.
- Tea and coffee making facilities (e.g. a kettle and coffee machine).
- Jugs or drink dispensers (e.g. for water and juice).
- Serving platters and trays.
- Display platters and trays.
- Serving tongs.
- A rubbish bin.
- A speaker, music player or radio.
Not all B&Bs have a communal area for their guests to spend time in, usually because they don’t all have the required space. Communal areas (usually a lounge or a place to relax) are more common in mid-range and luxury B&Bs.
The most common equipment requirements for a communal area are:
- Sofas, armchairs and other seats.
- A table or coffee table.
- A television and a radio or music system.
- A bookshelf and books.
- Board games.
- Magazines and newspapers.
- A computer or laptop: For marketing and advertising purposes, managing your website, handling bookings and checking in guests.
- A phone (for guests to contact you).
- A booking system or booking software.
- A reception desk and chair.
- Wi-Fi – You may also need boosters to ensure the Wi-Fi signal reaches all guest bedrooms and communal areas.
- A printer and ink: For printing out customer reservations and receipts.
- Hand sanitiser.
- Reception opening hours sign.
- Pricing signs (e.g. price of rooms per night).
- Guest information (e.g. local attractions, telephone numbers for local taxis).
Outdoor signs: These signs will likely include the name of your business and that you are a bed and breakfast. You will likely attach these signs to your building or place them at the front of your building. Depending on your location, you may also put them on the road, directing your guests to your property.
- Parking signs.
- Outdoor seating areas.
- An outdoor seating area (e.g. tables and chairs).
- A BBQ and/or fire pit.
- A hot tub.
Other equipment requirements
- Paint, wallpaper and other wall décor equipment.
- Carpets, rugs, wooden floors and other floor-related equipment.
- A washing machine and tumble dryer.
- A CCTV system.
- A fire alarm system.
- A cash till and Point of Sale (POS) system.
- Welcome packs for your guests.
Cleaning products: You will need cleaning products that are suitable for cleaning the guest bedrooms and any communal areas, including hallways, lounges and the reception area.
The most common cleaning equipment you will require includes:
- A hoover and/or sweeping brush.
- A mop.
- Cleaning products, such as bleach, antibacterial cleaner, disinfectant, floor cleaner, glass cleaner, toilet cleaner, furniture polish, carpet cleaner etc.
- Cloths and sponges.
- Dusters and microfibre cloths.
- Bin bags.
- A fully stocked first aid kit.
- Personal Protective Equipment (such as protective aprons, gloves and facemasks).
- Business cards (for advertising).
- Business insurance.
As well as the equipment listed above, many B&Bs choose to purchase additional accessories and furnishings in order to create the desired atmosphere and design of their accommodation. This could include style accessories, such as vases, flowers and artwork. If you have a themed B&B, you will likely purchase accessories to match your theme.
There are many different costs associated with setting up and running a bed and breakfast business. Some of these costs will be one-off, initial costs that you will need to pay when you are setting up your business. Other costs will be ongoing costs you will need to pay on a regular basis, usually weekly, monthly, quarterly or annually.
Some of the typical costs associated with a B&B business are:
The B&B building
Some people refurbish their homes or parts of their homes to run their B&B business. However, other people purchase a new property or build a detached property on their land to set up as a B&B. You may also choose to purchase an existing B&B business. The costs associated with purchasing your B&B can vary based on several factors, such as your location, the size of the land, the size of the property and the number of bedrooms.
Renovation, refurbishment and installation costs
You may need to convert or refurbish your property to make it suitable for guests. For example, you may want to extend your property to add more bedrooms, or convert existing rooms into bedrooms and install ensuite bathrooms. You may also need to install appliances, add plumbing and electricity and decorate your property to fit the aesthetic of your business or to make it more attractive to potential guests. Renovation and refurbishment costs can vary depending on the level and scale of work required, from £500 for more basic work to more than £100,000 for more extensive work. Prices can also vary depending on the types and number of contractors and tradesmen you require.
You may need to renovate the exterior of your property to ensure it complies with safety and legal requirements. For example, you will need to make sure your exterior is safe and hazard free and you may need to make the necessary changes to ensure your property is accessible. For example, installing a ramp and widening pathways. You may also want to landscape your property or pay a gardener to make your B&B more attractive from the outside. Expect to pay between £1,000 and £10,000 for exterior renovations.
Equipment and furniture
The type and amount of equipment you require (and the associated costs) will vary depending on the size of your B&B and the type of B&B business you want to set up. For example, a luxury B&B with higher prices will have more equipment requirements than a budget B&B. If you purchase an existing B&B business, you may be able to use some of the existing equipment and furniture. However, if you are setting up a B&B from scratch, you will likely have more equipment requirements. You can expect to spend between £2,000 and £50,000 on equipment.
Food and drink stock
Food and drink stock is an ongoing cost you will need to factor into your budget. You may need to order more or less stock at certain times of the year, depending on how busy your B&B is. Food and drink stock will include breakfast foods (perishable and non-perishables) and coffee, tea and related items for the breakfast area, guest rooms and communal areas. Some B&Bs also offer alcoholic drinks to their guests and provide other snacks, such as cookies. To keep your food costs low, plan your meals, research the costs and the providers and create a budget. You will also need to factor wasted or spoiled food into your budget.
As well as food and drink stock, there will be other stock you will need to replenish regularly. This can include stock such as cleaning products, batteries, printer ink, newspapers and magazines, first aid equipment, PPE and welcome pack products. Conducting a weekly or monthly inventory of your stock can ensure you replenish your stock as and when you need to.
Maintaining, repairing and replacing equipment
Repairs, maintenance and replacements are ongoing costs you will need to factor into your budget. Cleaning and maintaining equipment and ensuring it is used correctly can extend its life, but repairs and replacements are still inevitable, as using unsafe equipment could be dangerous. You will also need to replace items such as towels and bed sheets periodically (or if they become damaged or stained).
A business website
Your business website is an essential advertising tool as it allows potential customers to find your property online and view pictures, descriptions and additional information. Your website may also have a booking system, allowing guests to make a booking or view your availability. Your website will need regular monitoring, updating and upgrading. You also need to make sure your website is secure, particularly if you will be collecting any customer information or banking details. You could opt to set up and manage your website yourself or hire someone to do this. You may also want to pay someone for search engine optimisation (SEO) to ensure your website ranks highly on search engines.
Advertising and marketing
To ensure your B&B attracts guests and generates an income, you will need to spend money on branding, advertising and marketing. It is recommended that you spend between 1%-3% of your annual turnover on marketing. For example, if your annual turnover is £60,000, it is recommended you spend between £600 and £1,800 per year on marketing. You may need to invest more money in advertising and marketing when you initially set up your B&B, in order to ensure your B&B is well-known and potential guests are aware of you.
Branding can help you to establish your B&B business’s identity and help your business to stand out from any local competition. Branding could include creating your business’s visual identity and aesthetic, a logo, your business name and your business website. You can hire a professional to help you with branding or do some of the work yourself. Branding can cost between £500 and £5,000, depending on the amount of branding you require.
Unless you are running a family business, you may need to hire staff to handle the day-to-day running of your B&B. This could include kitchen staff, cleaners or reception staff. If you hire employees, you will need to account for this extra expense. You will need to pay your staff an hourly wage. The national minimum wage in the UK, as of 1st April 2022, is £9.50 per hour. When employing staff, you may also need to factor in holiday pay, sick pay, National Insurance and any company pension contributions.
There are a number of training courses you may need to undertake, some of which may be legal requirements and some which may be optional. Training courses typically cost between £20 and £30 + VAT per person.
These are the day-to-day costs associated with running your B&B. It includes overhead costs such as council tax, gas, electricity, water, TV licence and Wi-Fi. Most of your running costs will be paid monthly, although some may be paid quarterly or annually. Keeping your running costs as low as possible allows you to maximise your profits.
There are several types of insurance you may require for a B&B business. There are also some additional insurance options you may choose to give your business extra protection. The cost of your insurance can vary depending on your insurance provider and the level of coverage you choose.
The most popular coverage options for a B&B business are:
- Building Insurance.
- Public Liability Insurance.
- Product Liability Insurance.
- Contents Insurance.
- Malicious Damage Cover.
- Employer’s Liability Insurance (if relevant).
- Key Loss Cover.
- Guest Effects Cover.
- Business Interruption.
- Legal Expenses.
Permits and licences
There are several permits and licences you will need when setting up and running a bed and breakfast. These costs could be a one-off fee or may need to be paid and renewed regularly. Costs can range from several hundred to several thousand pounds. See the list below for the permits and licences you may require.
Typical Pricing for Customers
Once you have calculated the typical costs associated with setting up and running a B&B, you can then determine your pricing policy. Your pricing will depend on multiple factors, such as:
- Your location.
- Your typical customers.
- The number of guest rooms.
- Whether the rooms are single, twin, double, king, family, suite etc.
- The season.
- Your competition and competitor pricing.
- The type of B&B you are running (e.g. basic, mid-market or luxury).
- Your furnishing, facilities and equipment.
- Any local events that are occurring.
- Whether you offer breakfast.
- Your set-up and running costs.
The best way to determine your pricing is to test your target market. Focus on the typical guests you hope to attract and look at similar B&Bs that offer similar services as you do. Your prices will likely vary significantly depending on the season, for example, you may charge significantly more during the high season (such as school holidays). You may also offer a discount if your guests book for a certain amount of time (such as a weekly discount) or a loyalty discount for return customers.
Bed and breakfast pricing can vary significantly, with some B&Bs in the UK charging as little as £20 per night and the most expensive B&B in the UK charging nearly £1,500 per night!
Safely Running a Bed and Breakfast Business
Implementing safety practices in your B&B is an important responsibility. Safety practices help to protect the health, safety and well-being of you, your staff and your guests.
Some safety practices you should employ in your bed and breakfast business are:
Smoke detectors, carbon monoxide detectors and fire alarms
These should be installed throughout your B&B and should be checked regularly to ensure they are working. They can protect you and your guests in the event of a fire or carbon monoxide leak.
Health and safety training can help to ensure safe practices in your B&B and can ensure that all your staff are aware of and adhere to safety procedures. Some training you can complete includes First Aid, Health and Safety for Businesses, Fire Safety Awareness, Assessing Risks and Electrical Safety.
Properly maintain and set up equipment
If you supply any equipment for your guests to use (such as TVs, kettles, chairs and beds) or any equipment in areas that are accessible to your guests, you will need to ensure it is properly maintained, correctly set up and safe to use. You must protect your clients from accidents or injuries caused by equipment. You should also perform regular equipment inspections to ensure your equipment’s safety and help extend the lifespan of your equipment.
Carry out risk assessments
Although risk assessments are only a legal requirement for businesses with more than five employees, they are recommended to ensure the safety of you and your guests. Risk assessments can help you to identify any potential hazards and risks in your business and how these can be reduced or eliminated.
As part of your risk assessment, you should:
- Identify hazards.
- Determine who could be at risk.
- Evaluate any potential risks.
- Implement relevant safety measures.
- Record the results of the risk assessment.
- Review the risk assessment regularly.
Follow the Hazard Analysis and Critical Control Point (HACCP) guidelines
The HACCP principles help you to manage food safety hazards that could arise when storing, handling, preparing, cooking and serving food. You can identify potential risks and implement measures to ensure these risks are reduced or removed. You should also keep records of any actions you take in line with HACCP.
Check and maintain electricals, electrical outlets and plumbing
Not only can this save you money by avoiding damage, repairs and replacements, but checking and maintaining electricals and plumbing can help to protect your guests from harm. Implement a system for regularly checking outlets and plumbing and ensuring they are up to code.
Clean and wash equipment
Having effective cleaning procedures is essential to any business that sells or serves food. It is recommended that a cleaning schedule or cleaning policies are in place that cover the cleaning of equipment, surfaces, and food preparation and storage areas.
Safely store food and drink stock
You must ensure that perishables are stored at the correct temperature to prevent spoilage or deterioration. It is a legal requirement in England, Wales and Northern Ireland that chilled food must be kept at 8°C or below at all times. If chilled food is out of the fridge for more than four hours, it must be disposed of. You should also make sure cooked food is covered at all times to prevent spoilage or deterioration.
Keep clear and accurate records
If your business receives an inspection, up-to-date records of your business’s cleaning schedules, risk assessments, health and safety policies, allergen information, and temperature checks will likely be requested. Keeping such records not only helps to protect your business and improve the likelihood of you receiving a higher score, but it also ensures procedures are followed at all times.
Implement security measures
Security measures can help to protect you, your guests and your business. Ensure your stock and equipment are safely stored and your B&B is secure to help to protect your business. Installing a CCTV system, reliable locks, and an alarm system are just some ways you can protect your B&B business.
Keep a fully stocked first aid kit
If a guest or employee has an accident or injury, it may not be serious enough to warrant medical intervention. Instead, you may be able to offer treatment yourself. Having a first aid kit that is checked and replenished regularly and is easily accessible is recommended.
Ensure staff are aware of manual handling procedures
If manual handling tasks are performed incorrectly, this can result in injury. To protect the health and safety of your staff, ensure they are trained in manual handling regulations. You should also ensure they have the correct equipment to perform manual handling tasks safely.
Protect your staff from threatening or abusive behaviour
Threatening or abusive behaviour could come from guests, especially those who are under the influence of alcohol or are dissatisfied with your service. It is your responsibility to protect your staff and guests from threats or abuse. Implement procedures for dealing with threatening behaviour, record any incidents and ensure you support your staff as much as possible.
The hospitality and bed and breakfast industry is highly regulated. There are multiple legal requirements you must ensure you comply with. Failure to comply can result in a fine, the forced closure of your business or even a prison sentence.
Some legal requirements you should be aware of are listed below.
Adhere to food safety legislation
There are several pieces of legislation you must comply with if you run a business that serves or sells food. These can include:
- Comply with the Food Safety Act (1990).
- Comply with legislation regarding the 14 food allergens.
- Comply with food labelling guidelines.
- Obtain food hygiene training.
- Register with your local Environmental Health Officer (EHO).
Comply with fire regulations
As the business owner, you are responsible for fire safety measures on your property. There are multiple fire regulations you must ensure you comply with. For example:
- Perform a fire risk assessment.
- Inform your local fire authority that you will be opening a bed and breakfast.
- Comply with the Regulatory Reform (Fire Safety) Order 2005.
- Implement any necessary fire safety measures.
- Implement emergency procedures and ensure these are clearly displayed in guest rooms.
Comply with gas safety regulations
You will need to have your gas boiler (if you have one) inspected by a gas safe engineer. If your equipment is deemed safe to use and complies with government requirements, you will be issued a Gas Safety Certificate. You will need to display your gas certificate clearly for your guests and other visitors to your business to see.
Comply with the Electricity at Work Regulations 1989
The Electricity at Work Regulations state that any workplaces that use electricals must construct electrical systems in a way that prevents danger, maintain electrical systems to ensure they are safe, ensure electrical equipment is checked by a competent person annually and conduct Portable Appliance Tests (PAT). This includes any electrical equipment in guest rooms, communal areas and staff-only areas, such as the kitchen.
Comply with the General Data Protection Regulations (GDPR) and the Data Protection Act (DPA)
You must comply with both pieces of legislation when storing or sharing personal information, such as your guests’ personal information, contact details and banking information. You must also apply for a Notification to Process Personal Data Licence. If you process or store personal information such as personal details and banking information, you will need to apply for a licence with the Information Commissioner’s Office and renew your registration every year.
Apply for planning permission
If you want to alter the layout of your property, make any structural changes, build an extension or create a new building, you may need to apply for planning permission from your Local Planning Authority (LPA). You will need to contact the LPA at your local council to apply for planning permission. Keep in mind that approval can take several months, so ensure you apply for planning permission in advance.
Apply for a television licence
If you use any televisions on your property, you will need to apply for a TV licence. Because you are operating as a B&B business, if any TVs are accessible to your guests, you will need to apply for a specific TV licence that covers up to 15 separate accommodation rooms on your site.
Apply for a music licence
If you play any music (including on a TV or the radio) in your B&B, including in communal areas, or you offer activities such as karaoke for your guests, you will need to apply for a licence with Phonographic Performance Limited (PPL) and/or a Performing Right Society (PRS) Licence. You can apply for both a PPL and a PRS licence online.
Apply for an alcohol licence
If you plan to serve any alcohol at your B&B, whether this is complimentary alcohol (such as a welcome drink) or your guests purchase this alcohol, you will need to apply for an alcohol licence. You may need to obtain a BIIAB Level 2 Award or CIEH Level 2 Award. This licence teaches you about your responsibilities regarding alcohol sales, specific prohibitions, the strength of alcoholic drinks and how to protect children from harm. Without this licence, you cannot apply for your Personal Licence (which is a necessary licence to serve alcohol at your establishment). Depending on the requirements of your local council, you may need to send a copy of your licences to the Environmental Health Office (EHO) and your local police department. You should also clearly display your licences.
Implement a Food Safety Management System (FSMS)
Any business in the UK that serves food must implement a Food Safety Management System. An FSMS is a systematic approach to controlling food safety hazards. It ensures that your B&B is following safety protocols and will influence your food hygiene rating.
In the kitchen and any other food preparation area, you will need separate handwashing facilities and cannot use the same sink for handwashing and food preparation or equipment. Each sink should have an adequate supply of both hot and cold water. All sinks will also need to have an operational drainage system.
Apply for a Waste Carrier Registration
If you need to transport any waste, you will need to register as a low-tier waste carrier in England, Wales or Northern Ireland or a professional collector or transporter of waste in Scotland.
Comply with the Manual Handling Operations Regulations 1992
Manual handling regulations can help to protect you and your employees from sustaining an injury or illness as a result of manual handling tasks. The regulations apply to the lifting or moving of any objects, bending down and reaching high and repetitive movements. You will likely be performing manual handling activities when doing tasks such as cleaning, making beds and serving food.
Comply with the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR) 2013
RIDDOR states that you must report all injuries, diseases and dangerous events that occur in your business. Reports must be made to the Health and Safety Executive (HSE) using an appropriate recording document. These regulations apply to any incidents that involve guests and staff.
Appoint a first-aider
All workplaces in the UK must have an appointed first-aider. In the event of an accident or injury, you will then be able to administer the necessary first aid. Although a first aid qualification or certificate is not legally required, it is the easiest way to demonstrate your first aid training.
Register your business
You must register your business with HMRC before you begin operating. You can register as a sole trader or as a limited company. You will need to register your business name and any other relevant information.
Register for self-assessment tax
This allows you to calculate and pay your own taxes each year. You will need to track your finances every month and submit any expenses as part of your tax assessment.
Positives of Owning a Bed and Breakfast Business
Owning a bed and breakfast business can be extremely rewarding and there are many potential positives to running this type of business.
These can include:
Design your perfect B&B
The majority of people who open a B&B are passionate about the hospitality industry, have dreamed about working in it for years or enjoy staying at B&Bs and hotels themselves. Opening your own B&B business allows you to design your dream business, from the atmosphere, décor and feel of your B&B, to the menu, your advertising strategy and your employees. You can add your own special touches to make your B&B more enjoyable for you to run and more enjoyable for your guests. For example, you could offer a guided tour of local landmarks, wine tasting or a cooking class. Designing your perfect B&B will make your business feel less like work and more like fun.
Choose your target customers
As you are designing your business yourself, you can create your business plan with your desired market in mind. This could be the customers you feel will maximise your profits, the customers you are most comfortable with or those who are most likely to fit your design aesthetic. Choosing your own target customers also allows you to design your accommodation with them in mind and set your pricing accordingly.
Work from home
Following the Covid-19 pandemic, many people now aspire to work from home. Because your entire business will be conducted from your home, a B&B business enables you to do everything from the comfort of your home and open your home to your guests. You will also have the flexibility to stop working and close bookings and choose not to offer accommodation at certain times, for example, if you want privacy, you want some time off or you have family or friends coming to stay.
Low start-up costs
If you already own a suitable property, a B&B business requires minimal investment. You may only need to pay for decoration and furnishings, any permits and legal requirements and your advertising costs. Low start-up costs, particularly compared to other businesses in the hospitality industry, allow you to begin turning a profit more quickly and can make your first year in business lucrative, even though many other hospitality businesses don’t begin to make a profit until after the first year.
Choose your schedule and workload
Many people think of a B&B as being a 24-hour job. However, as the business owner, you can choose your own schedule and workload. You could choose to only operate the reception for certain hours of the day or choose to close your B&B on certain days. Once your business is profitable, you could also opt to hire staff to handle the day-to-day running of your business, particularly cleaning guest rooms and working in the kitchen.
It can be rewarding
A bed and breakfast business can be emotionally, mentally and financially rewarding. It can help you to take a step back from the traditional 9-5 working hours and allows you to work from your home. You can also build positive relationships with your guests and get to know people from all over the UK and the world. If you are passionate about what you do, your business will likely not feel like work. For people who enjoy face-to-face interaction and spending time with other people, a B&B business can be very rewarding.
It can be lucrative
As your business grows and your bed and breakfast becomes more well-known and highly reviewed, you will have the potential to earn a higher income. A B&B business has a good opportunity for growth as you can expand your business, redecorate, install more amenities and charge higher prices. A B&B business can begin making a good profit almost immediately and with the help of a good business plan and correctly implemented strategies, these profits can continue to grow.
Easily gain exposure
The rise of social media and holiday accommodation sites makes it easier than ever for you to gain exposure. Particularly if you are able to take good photographs or are tech-savvy. Gaining exposure online is an easy and effective way of growing your business and increasing your profits.
B&Bs in the UK are particularly popular for staycations. This makes it more likely that people will return to the same B&B multiple times (if they had a positive experience) or will recommend your B&B to their friends and family. Guest loyalty is an effective way to grow your business and maximise your profits.
Be part of the local community
B&Bs are often staples of the local community and are well-respected as they help to bring footfall and business to the local area. For example, shops and cafes in a village that has a popular B&B are likely to see increased profits. Not only could you have a positive effect on your community and earn the respect of other businesses, but as a business owner, you will likely be an integral part of your local community. You can also build personal and professional relationships in your community, for example, by setting up a deal to purchase products from your local farmer.
Be part of big occasions
People often go to a B&B to celebrate big occasions, such as birthdays, anniversaries, weddings and other important milestones. As the B&B owner, you can be a part of your guests’ special occasions and know that your B&B was an important part of people’s lives. This can be extremely rewarding.
Be your own boss
You can make all key decisions yourself and steer your business in whichever direction you choose. You can choose how involved you want to be, the type of B&B you want to run, and whether you hire employees. You can make the best decisions for you and your business.
Negatives of Owning a Bed and Breakfast Business
Although opening a B&B business can be extremely rewarding, there are certain negative aspects to opening this type of business.
It can be time-consuming
Running a B&B can be a 24-hour job and even if you set specific front desk hours, guests don’t always comply with these. You may have guests trying to check in or out early in the morning or late at night or guests ringing the bell to request extra towels at 10 pm. Running a bed and breakfast can have a significant impact on your personal life. You always have to be available and may no longer feel able to spontaneously go out for the evening or away for the weekend. Even organised events may involve you cancelling or refusing reservations and may feel too stressful.
Your home is never your own
The majority of B&B owners run their businesses from their own homes, or the B&B staff live on-site. This can make it feel like your home isn’t your own and can make it extremely difficult to switch off from work. This is even more likely if you can hear any of your guests, or if you share any areas of your home or garden with your guests.
It can be difficult to take a holiday
If you run a B&B, particularly if you run a family business, any time off you take or holidays you go on will be lost income. Many B&B owners either refrain from going on holiday or don’t take time off during peak times of the year. This can mean you miss out on experiences with your family and friends and can make it feel like work is taking over your life.
Guests can be demanding
Some guests can be extremely demanding and may not understand that B&Bs operate differently than hotels. They may expect you to always be available to help them and may expect your B&B to have the same amenities that they have found in hotels they have stayed in. To avoid negative reviews, you may feel like you have to adhere to the demands of difficult guests, which can impact your own personal life.
Bookings can be inconsistent
It can be very difficult to plan your finances and predict your profits when you work in the B&B industry because bookings can be very inconsistent, with some times of the year being significantly more popular than others (for example, summer and Christmas). Although larger accommodation, such as hotels, can capitalise on busier times of the year, by accepting a larger number of guests, which allows them to make up for their lower profits at other times of the year, B&Bs don’t have the same luxury, as they often only have 5 to 10 rooms available. There could be certain times of the year when you have no or very few bookings and this can make it difficult to make your business a success long term. Occupancy rates usually hover around 50% for B&Bs, meaning that half of your rooms will be vacant and not making a profit.
Although the majority of customers leave honest reviews, some customers are difficult to please and will leave a negative review because of the smallest complaint (even if it is something outside of your control). Some customers even leave negative reviews because they didn’t read the property description properly (for example, complaining about there being no parking even though that is clearly stated). It’s also possible for people to leave fake reviews, which can be extremely damaging to a business and can be very difficult to remove, even if you know they are fake. Negative reviews can be extremely damaging to your business, particularly to small B&B businesses that may have fewer guests and fewer reviews.
Complying with legislation
There are many different pieces of legislation and legal guidelines you will need to comply with. Not only can this be complicated and time-consuming, but any non-compliance (even if this is accidental) can be heavily punished with a fine, the forced closure of your business or even a prison sentence. Some types of legislation also require you to go through specific training and/or gain a qualification, which can be costly and arduous. A B&B business can have high liability which can be a lot of stress and pressure on a business owner.
Potentially high start-up costs
If you already own the perfect property that already has the correct facilities (such as ensuite bathrooms) installed, start-up costs can be low. However, for the majority of prospective B&B owners, they will either need to purchase a new property or make extensive renovations to their existing property. This can be extremely expensive and time-consuming and can not only make setting up your business a long process but can also result in you needing to take out expensive business loans, which can lengthen the time before you begin turning a profit.
If there’s a problem, you need to fix it
If there is an issue, no matter what time of the day or night it is, you will be responsible for fixing it. If a guest has a water leak, the electricity stops working or there is another major issue at 3 am, you will be responsible for fixing it to avoid a negative review from the guests or to avoid needing to give them a refund. It can be difficult to manage stressful situations and solve major issues yourself, especially if they occur on holidays or at nighttime.
It can be competitive
Not only are you competing with other B&Bs, but you are also competing with hotels, caravan parks, holiday parks and other private holiday rentals. Having multiple businesses to compete with can make it more difficult for your business to succeed.
It can be physically demanding
If you handle most of the day-to-day running of your business yourself, this can be physically demanding. You will be expected to clean bedrooms regularly, handle the laundry and cook and clean. You will also be on your feet for a lot of the day and be involved in manual handling activities. This can be physically demanding and can result in strain and even injuries.
It can be stressful
If you run the B&B on your own, the stress of it can feel overwhelming. A B&B owner can have a lot of responsibilities and it can be extremely demanding and stressful. Not only are you handling the day-to-day running of the business, but you are also responsible for tasks such as adhering to legal requirements, advertising, ordering stock and organising bookings.
Planning Your Bed and Breakfast Business
If you are thinking of starting up a bed and breakfast business, an effective and well-designed business plan is essential. A business plan can help you to focus on the specific steps that will help your business succeed, plan your short-term and long-term goals, determine your financial needs and help your business to grow.
Your business plan should contain information such as:
- Your company information.
- Your company description.
- The services you will provide.
- Your branding, marketing and advertising plan.
- The structure of your business.
- The operational plan for your business.
- The financial plan for your business.
Decide what type of B&B you are going to run
There are certain questions you should consider when creating your business plan, such as:
- Are you going to open a budget, mid-market or luxury B&B?
- Will your B&B have a theme or a certain design or aesthetic?
- How many bedrooms will your B&B have?
- What will the bed configuration be (e.g. double, twin, bunk beds, king-sized beds)?
- Will you offer breakfast? If so, what kind of breakfast will you provide?
- Will you have any communal spaces?
- What type of check-in experience will you offer?
Summarise your business
Your business plan should include a detailed overview of your business, including your location, the size of your business (e.g. how many guests you can accommodate) and your business goals. You should also consider who your target customers are.
Decide what services and amenities you will offer
What services and amenities will you offer at your B&B? What will be included in the price and what will be offered as optional extras? You may choose to offer additional tours and experiences that may be specific to your B&B or the local area, for example, a local tour, wine tasting or a pottery class.
Decide if you are going to hire any staff
You may opt to run a family business; however, it could be that you are not able to efficiently run your B&B without hiring staff. You may choose to hire staff to help you with cooking, cleaning, bookkeeping or managing your website.
Analyse your competition
Analyse your local competition, including B&Bs and other accommodation in the hospitality industry, such as hotels. You should also analyse your competition across the country, comparing your B&B with other B&Bs that operate within the same niche as you. Look at what they do well and what you think they can improve. You can also use competitor information to predict when booking numbers are likely to be higher or lower. Analysing your competition also allows you to investigate where most of your business will come from and how you can maximise on local opportunities and events.
Calculate your initial start-up costs and your approximate running costs
You need to determine your approximate start-up costs and running costs to enable you to calculate your initial investment and what your monthly or annual running costs will be. Creating a budget is a key part of your business plan. It can also help you to determine whether you can finance the business yourself or whether you require outside investment. Consult the list above to help you calculate the approximate costs associated with setting up and running your business.
Create your sales strategy
When creating your sales strategy, you will need to consider how many guests you can accommodate at one time and what your occupancy rate will need to be in order to turn an acceptable profit. As your business grows, your sales strategy may change. You should also calculate what your weekly, monthly and annual sales forecast will be.
Create a strategy for growth
Because the B&B industry is increasingly competitive, revenue management can help to increase your performance and grow your profits. There are several different key performance indicators (KPIs) that can increase your profits.
- Average room rate: This is the average rental income of each room for each occupied room during a specified period of time. The average room rate may differ during peak and off-peak times and for different rooms in your property. You can compare your room rates to your competitors and use this information to maximise and increase your income.
- Costs per occupied room: Monitor your costs by calculating the average costs incurred for each occupied room. For example, you will need to consider the breakfast costs, staffing costs, cleaning and laundry, utilities and booking fees and/or commission. By calculating the cost of guests staying in a room, you can ensure you set your room rates to ensure maximum profits.
- Room occupancy rate: This is the number of rooms that are occupied (as a percentage). Your room occupancy rate is likely to be higher at certain times of year compared to others. You can look at your room occupancy rate daily, weekly, monthly and annually. You may be able to increase your occupancy by monitoring and partnering with local events, being aware of your competition, adjusting your advertising and booking channels and adjusting your room rates.
- Total revenue per available room (TrevPAR): TrevPAR is frequently considered the most important factor when calculating your profits and how well your B&B is performing. You may calculate your TrevPAR at a specific time or compare it across time periods (for example, comparing different weekends across the year). Total revenue per available room includes your room rates and profits from the bar, food, room service etc. Look at factors that may be influencing your total revenue, the performance of certain amenities and whether revenue changes based on guest demographics (e.g. couples spend more money).
Create your marketing and advertising strategy
Your marketing and advertising plan should detail what your brand is, how you plan to promote your business and your business’s unique selling points (USPs). Consider how you will attract potential customers. You will need to create an effective advertising plan, for example, you may want to advertise your B&B on multiple channels and may list your property for let on multiple channels. You should also focus on optimising your website to make it user-friendly and attractive to potential guests.
Determine your business objectives
Determining your business objectives is an essential component when creating your business plan. Your business objectives highlight the targets and goals of your bed and breakfast business and help you to create a one-year, three-year, and five-year business plan.
Your business objectives should be SMART:
- S = Specific
- M = Measurable
- A = Achievable
- R = Realistic
- T = Time-bound
Have you complied with all legal requirements?
Ensure you have filed all your paperwork and have complied with all legal requirements before starting a baking business.