When I began my search for a B&B in Dallas I came up empty.  There were some in Dallas already but none were both in the area I wanted to be in and for sale.

Advantages of Building
One of the biggest advantage of building is that you can make it exactly the way you want.  It is tricky to find a house with LOTs of bedrooms where every bedroom has a bathroom.  If you build, you can do that easily.  Another advantage to building is that the ongoing maintenance is much lower than if you purchase an older home.  Lots of people believe that a new home doesn’t have the same character as an old home.  That may be true BUT I have lots of people who think my B&B IS old.  We built it to look older by putting in wood floors, larger moldings, paned windows.  Details can be added to give a new home an older look.

I believe that another advantage to building is that you can start with a completely clean slate.  No prior history to deal with.  You may not have an internet presence but you can build that pretty quickly.

Zoning
Zoning is very important because you want to make sure that your town/city allows your B&B to exist legally.  This is less of an issue in more rural areas but in Dallas, for example, there are not many neighborhoods that allow a B&B.  My neighborhood is very Urban, but other neighborhoods I considered would not allow a B&B.  The zoning wouldn’t allow it.  Go visit your Planning Department they may be able to help you figure it out.  Watch out for definitions, too.  For example, I’m zoned as a “boarding house” which allows me to rent my rooms just like a B&B. Parking can also be something that is strictly enforced by cities.

Finding an Architect
An architect can be a very important part of the way your B&B looks and feels.  I was VERY involved to the point of drawing out the floor plan I wanted him to produce.  I strongly believe that guests are not willing to share bathrooms so every room must have a bathroom.  An architect is one of those things where a referral can be the best way to find someone good.

There are some unique things that you might want to include in your drawings.  For example my rooms were framed so that the bedrooms don’t share studs – the dry wall for one room is hung on different studs than the studs for the room next door.  Also I have insulation between floors and my doors have dampers that go down as the doors close to block noise.

Getting the financing
Most banks will make you what is called an “interim construction loan”.  The is a little bit different kind of loan.  It will require you to have a down payment, probably around 10-20%.  You will also have to submit a plan to the bank of your construction costs and the qualifications of your contractor.  The bank will then allow you do draw down on the loan as construction progresses.  For example, you submit a bill for the lumber to frame and they release the money for you to pay.

You keep this loan until your construction is complete and then convert it into a traditional mortgage.  They key to this type of loan is not to underestimate your construction costs.  If you would like a sample spreadsheet with my construction costs please complete the form below.  Remember these costs can vary significantly depending on the area you live, but it’s helpful to have a starting point.

If you know you want to run a B&B you have a few choices – buy, build or remodel.  If you think you want to buy this post is for you.  Let’s assume you’ve done your research and you are ready to take action.  You have narrowed down your city or town, so what’s next?

Step 1 – In my opinion the first step to take is to go meet with other B&Bs in the area.  Yes they are your competitors BUT there are more than enough guests to go around.  It’s important to do this for a few reasons – 1.) in the short-term, if they are willing, it can be a great way to learn about owning a B&B in your town.  They can give you information like what seasons are the busiest, what kinds of rates they are able to charge, etc.   and 2.) in the long-term it’s really helpful to know someone else in the business in your area so you can share information.

I took this approach before starting my B&B.  I visited all the B&Bs in Dallas and some in the nearby towns.  I’m still very friendly with one and we pass business and advice to each other.  We also visit periodically and it’s a great way to see what they are experiencing in terms of traffic.  I’ve also discussed rates because I believe it is a great way to make sure you both earn more per night.  There’s no point in being the cheapest room around.

Step 2 – If you’re looking to purchase a B&B there are some good sites that list them.

Bedandbreakfast.com B&B listings
bbonline.com
Innmarketing

The first two are good sites because most B&Bs list their inns for guests here, the directories are both ranked highly by google (at least as of May 2013).  If you find a B&B you are interested in visit them and request their historical financial information.

Research the B&B on the internet to see what their reputation is because you would be buying that too.  You will not get a clean slate to start with unless you change the name of the B&B.  That can be a great thing if the current owners are doing a good job. If the B&B has a bad online reputation that could be hard to overcome and it might be better to start fresh with a new name.

You may find as you start searching that there are no B&Bs listed for sale in the place you want to be.

Step 3 – Don’t be discouraged it’s hard to advertise a B&B as “for sale” when it is still in business.  I don’t believe that there are really very good real estate agents out there for this purpose because it is such a small niche.  Owner’s can’t really post a sign in front either.  Try visiting the B&Bs that are in your area and ask them if they are interested in selling.  It might be that they have been thinking about selling but aren’t sure how to go about it.

Step 4 – If you still have no prospects it’s time to consider finding a home to remodel or building from the ground up.  Check for future posts on these topics.

If you have more questions about how to finance your bed and breakfast, take a look at this post on that subject.

I recently posted about offering to build projections for other B&Bs since I’m also a CPA and I’ve been through it.  If you want to read the full post look here.  If you want to do your own, take a look at the questions below to help you.

1. How many rooms do you rent?
2. What will the occupancy of each room be?  Or how many total guests could you have?
3. What is the address of your property?  If you have historical property tax information please include it if not, I may be able to look it up.
4. Will all of your rooms be open the first month? If not please provide a schedule of what month they will be for rent.  For example, 2 rooms for first 6 months, 5 rooms after month 6.
5. What is the total square footage of your B&B? and how much is used for personal use only?
6. What type of entity to you have – sole proprietorship, partnership, corporation, LLC?
7. What city/county are you located in?  If you have the average electricity bill for your facility Please provide it but otherwise I can estimate using this information provided.
8. What type of breakfast will you serve – buffet or plated?  How many days per week will you serve breakfast (we serve only Saturday and Sunday)?
9. Please describe the phone system you will use – Will each room have a separate line or one line?  How many phone lines will you have for business?  How many cell phone lines?
10. Can your B&B be served by one internet connection with Wi-fi or will you be required to have multiple connections?  If so, how many?
11. How many outside employees will you have?  I will need a rough explanation of the number, hours and pay rates you will have.  For example, I will have 1 person 20 hours per week at $10/hour for the first 6 months and then 1 person 40 hours per week for months 6-12.  I will make this a field that can be easily changed by you once you receive the projections.
12. What is the age of your B&B?  Do you have any idea what annual repairs have been?  If not I will estimate based on database information.  Please tell me the construction type – brick, wood, stone, number of floors and number of bathrooms.
13. Please list what types of things you plan to provide for each guest – shampoo, soap, cups, conditioner, robes, water, etc.
14. Have you paid to develop your own web site? If not, who will you host your site?  (If you don’t know I will assume one of the large and inexpensive hosting companies.)  If you haven’t built your web site do you have a budget for that and how much?
15. Do you plan to list your B&B in online directories?  Bedandbreakfast.com, bbonline.com,
16. Do you plan to list on hotels.com or bookings.com? (so I can include the commission charge?)
17. Will you have online booking capability and do you know who will provide that?  If you don’t know I will estimate the cost for one of the large inexpensive companies.
18. Do you plan to use outside provider for reservations/guest tracking or do it yourself?
19. Will you accept credit cards?
20. What type of television service will you provide your guests?  TV in every room? Cable TV? With premium stations?
21. Will you draw a salary from the property? If so, how much?
22. Rates – what is your average rate?
23.  If your B&B is currently in operation do you have any historical data on how many nights per month you would have guests? This is an example of what the data might be for an existing B&B:   First quarter –  60 rooms nights, Second quarter – 90 room nights, Third quarter – 54 room nights and fourth quarter – 65 room nights.  IF you are opening a new B&B there are several ways to estimate this.   You could estimate that you will be 100% occupied on weekends and 30% on weekdays.   The key is to estimate occupancy on weekends and weekdays. The projections I send you will make it easy for you to change these occupancy numbers if you think they are too low or too high easily.      
24. What will your mortgage be on both properties?  I assume you will pay that through the B&B?  If you don’t know it I can estimate based on the total loan, current rates and the number of years you will finance over (15 or 30).  If you will pay the mortgage yourself and not through the B&B will the B&B pay you rent and how much?

I had someone ask me a question about this issue so I thought there might be other people who are curious.  How do you get enough privacy when you live in the same house as your guests?

In my B&B there are six bedrooms and I lived in one at the beginning.  Over time I moved out to a place nearby and turned that room into a guest room.  I was nervous about this at first but it seems to be a good solution for me (and my husband especially).  I accept that I will have to run over there for emergencies but that doesn’t happen that often.

When I lived in the B&B I made a habit of keeping my door closed most of the time.  I typically left it open on Friday and Saturday afternoons so I could hear guests arriving.  This was my biggest complaint about being an innkeeper – waiting for guests to arrive.  I handled this by putting a combination lock on the door and sending guests a code with their confirmation.  When they arrive they find a basket waiting for them and I’m not always there.  This works for me and my guests know that I’m available and I’ll be around at breakfast but I’m not there all the time.

I have had guests ask what time they have to get there – but this makes it so they can check in any time.  I believe guests would rather do this than try to stick to a certain check in time.  Plans change and flexibility is important to guests.

This doesn’t really address the issue of privacy.  I believe it is important and you have to make it clear that your space is not open to guests.  They will walk right in and make themselves at home if you don’t.  You can put a sign on your door with a phone number and keep it closed.  Guests don’t need to feel so at home that they can walk right into your private space.  Don’t worry they will knock or call if they need something.

I believe you also have to let yourself get away. Almost every guest has access to a phone and make sure they have your number.  I put it in the room and on the welcome brochure and on the front door.  I also take time away by being closed.  It’s tough because you feel like you are throwing money away but your well being is more important in the long run.

The bottom line is you want to enjoy being an innkeeper so you can keep doing it.  The longer you do it the more repeat business you build and reputation.  These things can take to build and the financial rewards can be worth the wait.  Don’t be a slave to your guests, enjoy them but make time for yourself too.

As you may have read, I have not been a huge advocate of paying for social media. The main reason for this is that I don’t see that it increases revenue. I have recently been contacted by Main Street Hub, a social media full service company. This caused me to look a little more closely at the costs and benefits of social media and to reach out to other B&Bs to get their views.

First, let me say that if I were going to pay for help with building my social media presence I would definitely use Main Street Hub. I got good feedback on the company, even though I myself didn’t move forward. They made a very compelling argument for why it can really benefit your B&B, especially if you don’t have the time to do it yourself.  They will write Facebook posts, Twitter posts and respond to reviews for you.  They will also make sure that your Facebook page looks good and that you have claimed your Yelp page.

This is what some other B&Bs had to say:

“In my view, social media is like brand advertising — it increases awareness of the brand so that when (and if) someone is ready to buy your services, you will then come to mind as an option to consider that they may not have been aware of previously. For those who have used your services in the past (a repeat customer), social media will help keep you top of mind the next time they are searching for your services. I don’t think it’s really possible to accurately trace bookings to social media.”  Briar Patch Bed & Breakfast Inn

This B&B does a lot of weddings and events and they use social media to get photos of these events out there.

I spoke with another B&B who thought that it was very helpful to have someone responding to reviews, posting regular things on their Facebook and Tweeting about their B&B, even thought it might to turn into reservations.  They could not say for sure.

That is my beef with social media – how can you tell if it is generating more income?  People I talked to argued that it was good for building their “brand”.  Awareness is great, but I don’t believe that I have a brand.  B&Bs are so unique that the way people find me (and your B&B I’ll bet) is not through Facebook.  They find me by typing my city and B&B into Google.   If you are a B&B that gets guests from your brand, you probably aren’t reading this but I’d love to hear from you.

One of the unfortunate realities of owning a B&B is that you will inevitably be forced to learn a thing or two about toilets.  This may not apply if you own a large enough Inn where you have a maintenance man, but that is not the reality for most B&Bs.

The first issue with many toilets is that people put too much in them.  It is puzzling to me why people think that they can put what they put into a toilet and expect it to flush.  This will require you to occasionally plunge the toilet for them.

I decided to take one proactive step and put a nice looking plunger with a cover into each bathroom.  I figured this would force many guests to plunge their own toilet out of embarrassment.  It has worked for me in many cases, I can only assume because I don’t get many requests.  I have had some exceptions as the title suggests with guests who could not plunge the toilet themselves.  One arm does make plunging difficult and in these cases you just have to hold your breath and do it.

Aside from plunging, toilets seem to need a fair amount of fixing as time goes by.  I’ve found that a plumber is not required for most fixes.  There are a surprising number of resources for fixing toilets on YouTube.  Some of you may be thinking of course you can fix them easily but I’m not a particularly handy person, and my husband is even less so, so it has been a learning experience for me.

Before owning a B&B I would never have attempted to fix these things but now I always try.  I have easily replaced a broken handle, ball and arm, chain, flapper and even the complete insides of the tank including removing the tank.  Maybe easily is not quite accurate, but successfully.  It takes much longer than the video indicates but most of these repairs are possible and can be done for less than $10.  I have NOT attempted to remove the base.  For me removing the base is the point where a plumber would have to intervene.

I do recommend that you have a relatively new toilet.  I have debated this at length with my husband but it is true.  Toilet technology has improved their ability to flush.  If your toilets are very old, replace them.  They are not expensive.

Up to this point I have recommended that you DON’T need a business plan.  Many of you are not convinced and/or are writing one despite my advice.  I understand that and I don’t blame you.  It won’t hurt you; I did one too.  It can be a useful exercise to help refine your vision.

My main complaint is that it takes time and after the exercise is over it isn’t a very useful resource.  I haven’t picked mine up since the day I printed it out.  I also get folks comment that their bank requires it.  Again, I think it is unlikely that a bank will provide a business loan UNLESS they take your property as equity for the loan.  This type of loan is not really a bet on your business but on the value of your home which has little to do with your business plan.

I say these things because before I became a B&B owner I was a banker with an MBA and a CPA.  In banking I worked as a lender to medium-sized businesses but my early career was spent as a CPA.  This work gave me lots of practical financial skills and a love of spreadsheets.  I actually like building spreadsheets.  For this reason I wanted to reach out to prospective B&B owners who are struggling with projections.  My time is not free, but I am really good at building projections.

If you would like to have your B&B projections prepared for a small fee I would be happy to do it.  I ask only that you answer a short questionnaire to help me put the numbers together.  This questionnaire will help me put the numbers together so that they will be meaningful and useful both to you and to other financial experts who might look at them like bank lenders, investors, etc.  I have a sample of what the finished projections would include and they would come with an explanation of how you can tweak them as your information/knowledge changes.  I use a page that includes all my assumptions that can be changed easily.

Fill in the form at the end of this post and I will send you my sample projections along with a questionnaire.  The cost to get your own is only $75.  I can tell you that projections even for expert excel users take hours to complete so it could be worth your time to get some help.

You probably got into the B&B business because you like people and enjoy meeting new people.  That is the best part of running and inn.  The innkeepers 99%, I call it.  This article is about the 1% of guests that aren’t so great.  Most people that visit your inn will be a pleasure to host but there will be a few that you wish  had stayed at home.

Dealing with the 1% can be tricky.  You will find they are more difficult because they do things like rearrange/abuse your furniture, help themselves to your food, help themselves to everything else, have dinner in your dining room using all of your dinnerware and leave food out everywhere.  You get the idea.  Some people can be demanding, inconsiderate and downright rude.

The trick is that as an innkeeper, with the guest’s power to write reviews, you can’t let on that they are really annoying.  These are just the kind of people who will also take the extra time to write a terrible review which can cost you guests from the other 99%.  You must instead try to be as hospitable as you can.

I’ll give you some examples.  I had a guest who thought that since he was staying at the B&B it meant he could invite all of his co-workers over to take over my living room with a business meeting.  Rather than ask them to leave I decided to go about my business as usual.  When there was an opportunity I mentioned to this guest that I had a large group coming to the inn the next day so they would not be able to meet at the inn.  It was true in fact.   This way he got to continue his meeting but I made it clear that it was not something that he should feel entitled to do every day.

Another example (which seems to happen more with my long-term guests) is I had a guest who helped themselves to cook in my kitchen and leave dirty dishes and food out.  I tell my long-term guests that my insurance does not allow them to “cook” in the kitchen but they can use the refrigerator and coffee machine.  This is a true statement – my insurance does not allow guests to cook.  
This didn’t stop them from cooking and making a nice mess for me to clean up.  In this case I chose to just complain about it in private and not say anything.  Some people would choose to lock up their kitchen – which is an option BUT I feel that this is one reason guests choose to stay at a B&B.  They are looking for an experience that is more like home.

Above all I recommend that you try to remember that most guests are not like this and an occasional 1% every now and then is just part of the business.  Grit your teeth and smile.

There are lots of “packages” you can purchase to keep track of your revenues.  It is something that all innkeepers have to do and it’s not one of the more fun parts of the job.  It is important because you have to pay tax on these revenues AND it is vital to track how your business is performing.

Not many people like this task, but I have a method that is super EASY and FREE.  I keep an excel spreadsheet which I’m happy to send to anyone who fills out the form at the end of this post.  If you don’t have excel OR don’t know how to use it have no fear.  I have pre-formatted the spreadsheet and highlighted the rows you need to complete for each guest.

I track 4 things for each guest:  name, date of stay, rate and number of nights.  I have the tax rate built into the spreadsheet and a formula that calculates the total room nights, total tax and the grand total for each guest.  Every time I get a reservation I take a minute to open up my spreadsheet and add each guest.

Then at the end of the month I reconcile my total to my credit card statement.  This is a pain, but really important because mistakes happen and this is when you catch them.  You want to pay tax on the right amount.

Take a look at my spreadsheet (a sample entry) and if you want a copy, complete the form below.  The yellow boxes are the only ones that you have to enter with each reservation. 

I have a separate tab in the spreadsheet for each month to make it easy for taxes. At the end of the month I download my bank transactions directly into this spreadsheet and reconcile the difference between my room revues and the deposits. The difference is normally due to a 1-4 day lag between when cards are run and deposits are made.

If you would like a copy of my spreadsheet to try out please complete the form below.

If you are listing your business online one of the first things you will hear is the term SEO or Search Engine Optimization.  Basically this means building your web site in a way that google and other search engines will find it.

There isn’t just one way to do this and there are lots of “experts” out there that have their own theory.  The truth is that no one really knows for sure and the formula google uses changes constantly.  The best way to make sure your site comes up is to make sure it meets these criteria:

1.) your site has relevant and high quality information about the search that people are doing (bed and breakfast  + “your city”)

2.) your site reflects your personality so that it is clear it wasn’t written by someone in another country or a computer

3.) your site has regular additions to the content

4.) your site has relevant incoming links

Adding regular content to your site
The first two are relatively straight forward but the last one requires a bit more work.  The trick is to add information to your site over time that is relevant to your area AND the kind of stuff that people will be searching for.  Let me give you some examples.

I have a page on my site called “info”.  I regularly add posts about new restaurants that open, museums in the area, the food tour that started in Dallas, etc.  You get the idea right?  If someone is looking for a hotel in Uptown Dallas they might also look for places to eat, night life and attractions.  These are things that all travelers look for and if they can find that information on my site that helps me.  Maybe I get some extra visitors to my site who weren’t searching for Dallas B&B but they were looking for what to do on a weekend getaway in Dallas.

It’s important to keep this information current with what’s happening in your area.  If there is something happening in your town, write a post about it and include the proximity of your B&B to the event.

The mechanics of doing this are pretty simple if you have a WordPress site.  You can make one of your static pages in your navigation a blog with posts that you add.   The newest posts appear at the top.

Getting incoming links to your site
Many people have tried to pay for links but google is getting more and more clever at spotting this.  I don’t recommend it.  The best way is to get links that are legitimate.  One of the best incoming links you can have is from bedandbreakfast.com which is part of a paid listing with them.   We get lots of traffic from bedandbreakfast.com, they are a leader in the industry and I think it’s a link worth paying the membership fee for.  Tripadvisor is another high quality incoming link.

Other ways to get incoming links are to contact the web sites with relevant attractions in your area and ask them if they will link to your site.  For example, if there is a winery near your B&B ask them if they will include a link on their website to yours.   If there are B&Bs in your area you can see who is linking to them and contact those same sites to see if they will link to you.  This is a topic that we will discuss more in a later post.