How to Start a Bed & Breakfast

On the surface, running a bed & breakfast seems like a career opportunity available only for those characters from made-for-television movies: Inevitably, there’s a charming person who runs the local inn and finds love at the most unexpected moment.

However, starting your own B&B can be a lucrative adventure, where each day is different from the last. There are few jobs that allow you to meet new people from all walks of life while living where you work and showcasing the destination that you love.

As more people look to travel the world in authentic and sustainable ways, bed & breakfasts are increasing in popularity. The idea of staying at a place where you know the innkeeper, you can get local information from locals, and you can enjoy genuine hospitality is appealing to travelers of all ages and stages.

a couple standing together looking at a house from across the street with article title How to Start a Bed & Breakfast overlay

Given that demand is high and opportunities are plentiful, now may be the best time to invest in a bed & breakfast. Our guide can help you learn how to start a bed & breakfast in your town (or the town you’ve always wanted to make your own). We’ve also got some great resources for purchasing an existing business, and we’ll link to those here once they’re available!

So, while we can’t give you ALL the answers, here’s a quick high-level guide to what you need to know:

Step-by-Step Guide to Starting a Bed & Breakfast

Knowing that you want to start a bed & breakfast is only the beginning. Now, you’ll need to take your dream and transform it into a reality. Our step-by-step guide can walk you through the process of opening your own B&B from scratch.

Step 1: Location

Conduct market research and choose a location for your establishment. This first step is a pivotal part of the process, because location is everything when it comes to a bed and breakfast. You'll likely want to find a place that will naturally attract travelers and offer distinct experiences for visitors to enjoy. You also need to find a spot that is not already inundated with other bed and breakfasts and inns, as you won't want to face steep competition immediately upon opening your doors.

That being said, competition is a sign that there’s usually demand. So, shooting for a balance where you can bring your special brand of hospitality to differentiate is key!

Think about the lifestyle you want to have, as well. A booming business doesn't mean you have to set up in the middle of a busy urban area. If you are looking for more seclusion, that's okay! Just make sure you know who your ideal guest is so you can stay focused on offering what they want.

Step 2: Property

Once you’ve decided on a location, the next step is to secure a home or property that can be transformed into a bed and breakfast. The local government in the area can help you find a place that is zoned correctly and provide insight into the permits that you need to acquire in order to start your business. We’d also highly suggest partnering with an industry-specific realtor or consultant that can guide you through this piece.

Insider tip: Sign up for Google Alerts with keywords like “bed and breakfast”. Google will email you regularly with links to relevant articles which often include news stories about homes for sale that “would make a great bed & breakfast!” Plus you’ll be able to stay current on trending stories that you might find valuable.

a couple sitting at a desk shaking hands with someone on the other side with text overlay that reads For a smoother start, use a professional realtor that's experienced with lodging businesses for finding and buying your property.

Step 3: Market

Identify your target market segment and create ideal guest personas. Is your bed and breakfast geared toward millennials who love to travel with their pets and prefer avocado toast in a quaint sitting room? Are you going to market your B&B to retirees who are looking for a quiet and romantic escape? You’ll want your property and overall business strategy to accommodate the guests you intend to welcome. Your market will influence the color scheme, furniture, and amenities that you provide, as well as the look and feel of your marketing and messaging, pricing, and specials.

Insider tip: Think about WHY people come to the area where you’ll have your business. Make a list of activities, nearby attractions, and events and see if you can formulate the person that would love to be part of it all. Some common themes include: foodies, outdoorsy adventurers, spa/relaxation lovers, business travelers, arts and culture nerds, etc.

Step 4: Business Plan*

Create a business plan for your bed and breakfast. As you build or renovate your property and ready it for guests, you will want to design a business plan that helps you understand your overhead costs and profitability goals.

Again, we suggest working with a pro to make sure you’re not missing anything critical. Those early days of running your business can be a whirlwind, so the more you plan for, the better off you’ll be. You might find it helpful to use a business plan template to get you started and customize it for your specific needs.

*Depending on how you finance your property in the first place, this piece may need to be formalized sooner, but either way, it is a must! Don’t skip this part.

Step 5: Employees

Will you need to hire staff? Depending on the size and scope of your business, the answer will vary. Many smaller inns will start out being run by the owner(s) to save costs and stay hands-on. However, no matter how few rooms you have, it’s important to not run yourself ragged. So, be realistic about this potential expense.

A graphic of a white sign with black lettering that says We're Hiring with the quote Be realistic about whether or not you need to hire staff. If you do decide to bring on a team, don't skimp on finding and keeping the right people. Have a process and budget in place.

If you do decide to bring on employees, outline your plan of attack. Your staff is going to be integral to your overall success as a bed and breakfast operator. They will help you implement your customer service plan and will have a direct impact on your guests' impression of your establishment.

You’ll want to have clear, written job descriptions and a recruitment plan. Don’t forget about training and ongoing management of your team, as well as relevant regulations. Hiring great help isn’t always easy, so make sure you know how to take care of your people so they take care of your guests.

Step 6: Marketing

Design and launch a marketing campaign. As you are getting ready to accept bookings, you will want to create an innovative and flexible marketing campaign that can generate buzz about your bed and breakfast. Consider incorporating a variety of channels into your marketing strategy, including a combo of traditional promotional materials and online marketing campaigns. Begin building a following on social media at this time, growing an email list, and networking with your local community.

There’s so much that can be said about this topic, but it’s important to not get overwhelmed. For example:

  • One of the most important marketing investments you can make is with your website. You need to have a website that is user-friendly, designed to be SEO optimized, and fits the aesthetic of your property, appealing to your target audience. A quality website quote can lead to sticker-shock, but working with an industry-specific company to build and maintain a site designed to convert visitors into guests is worth every penny. woman looking at an image on her camera with text overlay that reads Working with vendors and partners that specialize in lodging can be your secret weapon to building the business of your dreams. Look for industry experts when shopping around for website, marketing, photography, and consulting services.

  • Find marketing activities that you enjoy and focus on those to start. Love Instagram, but hate Twitter? Then don’t create a Twitter account! We like to sum up social media with the phase “use it or lose it”. Don’t leave an outdated account floating around. On the other hand, make sure you think about your ideal guest profile when you decide where to spend your time.

  • Email marketing is one of the most valuable pieces of your business. Don’t underestimate this. It’s an OWNED audience, as opposed to social media, which could disappear tomorrow. You want to start inviting potential guests and supporters to join your email list right away so you can start building a relationship with them. Get them used to expecting you in their inbox and eager to read your content.

  • While staycations are certainly a thing, we want you to get involved locally so you can meet other business owners, members of your community, your tourism associations, etc. These people can be a huge resource for you not only when it comes to referring guests, but also for building business friendships (community over competition!).

Step 7: Property Management Software

Invest in a property management system so that you can begin accepting bookings, organizing rates and inventory, storing guest history, and managing guest communication… at a minimum. Today's travelers expect to be able to book with you online, receive automatic confirmations and process secure payments. An intuitive property management system that is designed for bed and breakfast operators can help you seamlessly launch your business and keep things running smoothly 24/7.

Graphic showing the different functions of a PMS, including pricing, inventory, real-time reports, guest management, communication, housekeeping, tasks, gift certificates, point of sale, reservations. Text reads A property management system is like the backbone of your business. Here's just a sample of what you'll be able to simplify:

Because all systems aren’t created equal, we’ve got a helpful free checklist you can use to kick off your search, plus tons of other content that can make the process a little easier for you. We may be biased, but we know a thing or two about a thing or two!

Step 8: Policies

Establish policies, protocols, and task lists to ready your business for its grand opening. Of course, you’ll need to have staff policies and procedures in place so that everyone knows what needs to be taken care of on a given day. But you also need to create guest protocols for things like check-in and check-out, on-site expectations and safety, cancellations, and more.

Once you have your policies outlined, make them accessible to potential guests and those people that have already booked. We suggest including them on your website, within your booking engine, and in your reservation-related emails. And don’t forget if you ever amend your policies to change them wherever you have them posted.

Step 9: Welcome!

Begin welcoming your guests. If you’ve checked everything off the list, you’re ready to welcome the first guests to your bed and breakfast. You might find it helpful to have a soft opening, with friends and family first. That way you can run through your check-in process, get some (honest) reviews of your guest rooms, amenities, and food service, and test out your guest communication for functionality and clarity. We’ve got some tips on how to make vacancies vanish!

Pros and Cons of Owning a Bed and Breakfast

As with any career, there are going to be benefits and disadvantages to owning a bed and breakfast. To keep it positive, here are a few of the biggest pros to owning a bed and breakfast:

  • You’re in charge of your bed & breakfast, which gives you the flexibility and autonomy to run your property as you see fit. This can be a rewarding endeavor, both personally and professionally.

  • You’ll likely feel comfortable and at ease in your work environment. Often having your own small lodging property means literally working from your home — you know the space, and you know what to expect.

  • You’ll meet new people every day. Many innkeepers find that their favorite part of the job is hearing the stories of their guests and making each person who stays at their property feel welcomed and relaxed.

Of course, as with any job or business venture, there are some disadvantages to consider:

  • You may have a difficult time managing your personal schedule. You are at the mercy of your guests when they book your property, which can limit your ability to take time off or travel.

  • You may not have consistent income from month to month, depending on the number of bookings that you receive. You will need to plan accordingly during the high travel season so that you can still take care of business in the low travel season. We’ve got some tips on how to make vacancies vanish!

Of course, there are potential cons to every job or business, so don’t let these stop you. Just being aware of them gives you the ability to anticipate and prepare.

Cost of Starting a Bed and Breakfast

You’re going to need start-up costs in order to get your business off the ground. The cost of starting a B&B will vary based on several factors, such as the location, the size of the property, and the amount of work that will need to be done in order to convert the home into a functioning bed and breakfast.

Here are additional costs that you may need to consider as you start your bed and breakfast:

  • Renovation costs: You must factor in the cost of furniture, amenities, and those luxurious extras that will set your inn apart from the rest.

  • Staffing costs: You will need to plan for the salaries and other expenses related to hiring and retaining employees.

  • Insurance and taxes: You will be required to take out various insurance plans in order to cover your property, your liability, your staff, and your guests. You also will need to identify the taxes that you will have to pay to the local, state, and federal governments.

  • Technology costs: Budget for the right technology in order to adequately manage and grow your business.

  • Marketing costs: You will need to invest in a marketing strategy that can drive bookings.

  • Maintenance costs: Plan for routine maintenance that will be required over time, as well as unexpected repairs that will inevitably occur.

Are Bed & Breakfasts a Good Investment?

Bed and breakfasts are similar to any small business, in that it can be years before you begin making true, consistent profits. Most people who embark on this entrepreneurial adventure know that they are investing in a business as well as in a personal lifestyle. You need to evaluate your financial circumstance as well as your personal needs in order to determine if a bed and breakfast is a worthwhile investment for you.

While you may be an independent entrepreneur who is starting your own small business, it's important to remember that you don't have to go it alone when you launch your B&B. We suggest researching regional and national associations and small business groups you can join to meet peers that have been there and done that. Be open-minded and ask for help when you need it!

Photo of four people sitting in chairs facing forward and smiling appearing to be watching a speaker with text that reads Don't go it alone! Even if you are running your business solo or with a partner, it's important to find support. Join local, state, and national groups so you can meet other innkeepers and stay on top of trends and educational opportunities.

You can also find it helpful to work with vendors that are experienced in the industry. For example, the ThinkReservations team is full of people that have lived and breathed innkeeping and hospitality management. When you become a Thinker (that’s how we lovingly refer to our clients!), you not only get a robust property management system for your business, but you’ll also have access to the support that you need in order to be successful.

Remember, your business will always be evolving to accommodate not only your guests and new trends in travel, but also you and the lifestyle you want to have. While we’re not going to say running a bed & breakfast is easy, it can be an incredibly rewarding experience and one that you’ll be thrilled you took a chance on.

This is the moment you have been waiting for — go get ‘em, tiger!

At ThinkReservations, we offer an integrated booking software specifically designed for bed and breakfast operators. For more information about our property management system, contact us today.

We look forward to helping you discover new ways to grow your business!

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