Buying a B and B

Cushtie

Hi folks.

I've always had an idea that I would like to own and run my own b and b. Not the most glamorous of occupations I know. Bit more of a lifestyle thing than anything.
A place has come up for sale that I know and has reignited the idea again.

Background.
1 I have no experience in the hospitality industry. I have never worked in a pub / hotel / restaurant etc. I am however a people person. I get on really well with everyone and really enjoy meeting new people.

2. I've been to see the B and B and have got the accounts from the seller's. They are not hugely impressive as the couple running it are retiring and for the last few years have taken foot of pedal.

3 it is in a very popular tourist location with an 8 month season _ 4 months high season so the potential to grow the business is there.

I know the business would entail 7 day weeks especially during high season and am under no illusions as to the work commitment required.

It's the financials I need to get my head around as this would be a huge step. I would have to give up job / career. Sell the family home and take out a sizeable loan / mortgage to buy the business. I

If any one here has any experience of doing something similar or any knowledge of the industry in general I would be delighted to hear your thoughts.

Cheers

doolox

My parents ran a B and B from about 1974 to 1994 from our family home in Galway. As you describe it is a very demanding and labour intensive business to be in and nowadays with competition with hotels in Nama and other hotels struggling to survive until the next upturn you need to take many factors into consideration.

If you are in any way fond of a social life, summer holidays or entertaining socially in your own home then you will find that these activities will clash with the paying guests need for a quiet place, constant management attention and the need to be on site and available at all times.

I was lucky in that my parents were real home birds and Dad was afraid of flying and they were contented to take a break in late September once the busy season had quietened down.

Inputs:-- Energy is a huge consideration. The Guests will insist on a high level of heating and laundry and washing will take up a lot of energy and money. Phone etc will not be as big an issue as it was in the 80's-90's with landlines being more prevalent. Internet and broadband may be more expensive and also TV cable might be charge at commercial rates...ask a pub owner how dear that can be.

If you are thinking of letting separate units with separate entrances TV licenses and cable subs may have to be bought fro each unit.

Fire and safety measures will all add extra to costs as will insurance.

Tax is an area I am not sure on but a I recall that you could submit your gross takings and then 1/3 of that number was deemed to be income. If you run your enterprise tightly and manage costs well you might be able to improve on that ratio.

Creating circles of B and B's in strategic locations around the country is another way of increasing business. This means finding out where the guest is going to next and being able to recommend places to them and maybe even book them forward to their destination. The hope is that the recommendee will do likewise for you if they have guests travelling your way. Another thing is to encourage stayovers by recommending places to visit that are enticing enough to do that. Galway was ideal for this in that you had Connemara/Aran for the first day, the Burren etc for the next and the city for the 3rd day all within 20-30 miles of our house. It is important to inspect the bedrooms if you can before the guests leave after breakfast and always take as much information, ID, number plates ect as you can. Runners are rare but can happen another loss maker is damage to rooms so watch out for hen/stag parties rally followers etc. Do not allow rally guys to store petrol in your property. I once had a row develop between a group of rally enthusiasts and a visiting guest who happened to be a fire inspector over this.

Always point out to guests the need to take care of any valuables and cash while in the house and to lock their bedroom doors if not in the room. You and your family may be straight but many of your guests may take an opportunity if someone is naive or careless.

Pet dogs and other animals should be avoided as a bitten visitor can cause problems. Always make clear any no show policies ahead of time, how many hours you will wait before re letting a room, expectations on calling ahead in case of delays etc... This can be a cause for complaint.

Breakfast can be a mix of Irish fry and continental style buffet if the numbers are big enough. Small numbers nights the breakfasts can be ordered and served as required. Make a good connection with a good cash and carry to cut costs here ( Separately packaged butters, jams etc. and cereal portion packs are good for cutting waste)

Thats all I can think of for now.

Cushtie

Hi doolox.

Thanks for your long reply. Loads to be thinking about. The place I'm looking at probably won't sell now this year as the season is under way but I'm going to give it as much research and consideration over the next few months and 1 see if is viable financially ( mortgage repayments would be the killer) 2 if the complete lifestyle change would suit me.

(I'm married. 40. 1 child with special needs. Not big into socialising and a week or two in the canaries in December would me grand for holidays!!!)

Fionn101

there are plenty of B&B's available for lease so no need to buy.
also try to get some experience, perhaps offer at a local guesthouse to help out for a few days

hth,
Fionn

pedroeibar1

I know a few people who have done this, very successfully and none of them had a background in the tourism sector. One guy took early retirement, sold both his main and holiday homes, bought a country house and now runs it as a very successful boutique hotel even being written up in the WSJ. Another did something similar. Their common factors are (a) no background in the sector, (b) no mortgage outgoings or reliance on the income for survival (c) very special properties and (d) a cash cushion.

You say you have a high borrowing requirement (that is going to be difficult in this climate for a commercial mortgage) and you also have a special needs kid. Have you considered the impact a home-run business would have on him/her, with constant coming/going of different people, some arriving drunk after midnight?

The thread here might interest you.