Considering becoming an inn keeper, any and all advice is appreciated!

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 Hello! My husband's uncle owns a beautiful 5 bedroom 3000 square foot farmhouse on 10 acres in a very small town in Northern California. He wants to sell it, but has been unable to. He approached us to see if we wanted to run a B&B in it. 

There are many positives to the home. It's historic, but restored, totally upgraded throughout, sits next to a small river stocked with trout, has livestock, horses, gardens, and is a great location for hunting, fishing, bird-watching, there is a hot springs near by and a major ski resort about 1-2 hours away. The town is very small though, so we'd have to make ourselves the attraction. There is a couple restaurants, but that is about it. There is also a large garage with a living unit upstairs (1500 square feet!) that we could live in and rent out the "big house". The best thing is that we could live rent free while we build the business and then go into a rent to own situation once we are profitable enough...

I have a job that I do from home currently. It is portable and I think I could do it from this location as well. So we could have a steady, modest income while we are ramping up..

My question are these:

1. How much on a monthly basis does it cost to run a B&B. I know there are utility costs, food costs, etc. But can you give me more details on expenses? Food, toiletries, cleaning supplies? Insurance? I'm trying to figure out a budget to see if this is feasible, so a monthly idea of expenses is essential!

2. How much can we expect to earn in gross profits? We thought a basic conservative guess would be: 104 nights (say we can only get weekend business) 3 rooms out of 5 rented, at $150 per night would be a gross profit of 46K. Does that sound reasonable?

3. How do you deal with start up costs? We might be able to have it mostly furnished, but i'm sure we will need dishes, more cookware, sheets, towels, new matresses? Do you get a small business loan? Are they easy to come by these days?

4. There are 3.5 bathrooms in the house. 5 bedrooms, so there would be shared baths. How much of a challenge is shared bathrooms in success of a B&B?

5. We have three children under the age of five. Though we could live in the unit in the garage and be out of the guests way.  I imagine we would market the inn as family friendly (on certain weekends or throughout, depending). Can you tell me if I'm crazy to think we can raise a family with such small children and run a B&B?

My husband and I are familair with business plans, marketing, branding, bookkeeping, etc. I love to clean and cook and love customer service type work. My husband is an avid hunter and fisherman. We see our talents and know how to divide the labor in terms of what we like to do...I think we have enough business acumen to run a B&B, but I am coming here from some nitty-gritty details about what it really takes to run a B&B.

Any advice, any answers to my questions, details about your day to day life, warnings, cautionary tales, anything to help us explore this idea fully would be super appreciated!!! Thank you!

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Great stuff, Yellow Socks. Nice response.

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 This person hasn't been on here to reply since posting it 092211. Fyi. 7 mos ago.

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Joey Bloggs wrote:

 This person hasn't been on here to reply since posting it 092211. Fyi. 7 mos ago.

Figures.

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oppida wrote:
I have a job that I do from home currently. It is portable and I think I could do it from this location as well. So we could have a steady, modest income while we are ramping up..

It will be like working two full time jobs.  No, three b/c of the kids.

oppida wrote:
1. How much on a monthly basis does it cost to run a B&B.

It varies wildly.

oppida wrote:
2. How much can we expect to earn in gross profits?

Any number you come up with will be a wild guess.  

oppida wrote:
 We thought a basic conservative guess would be: 104 nights (say we can only get weekend business) 3 rooms out of 5 rented, at $150 per night would be a gross profit of 46K. Does that sound reasonable?

If you have shared baths, how will you get $150 a night?  I'm near a university and a seminary, but my rates (with en suite baths) are $99 to $135, and that's pushing it. 

As far as calculating, I did something similar... $100 a night x 4 rooms x 365 night x .25 =$36,500 gross income.  It's not something I could take to the bank, but it helped me do calculations for myself.

oppida wrote:
3. How do you deal with start up costs?

Any way you can.  I spent my modest inheritance and the equity from our first house.

oppida wrote:
4. There are 3.5 bathrooms in the house. 5 bedrooms, so there would be shared baths. How much of a challenge is shared bathrooms in success of a B&B?

It depends a lot on your market and your attitude.  In a high demand area, it would be easier to get away with b/c people will come anyway.  But even then you'd have to charge less for your rooms.  You really, really want to try to have each room with its own en suite bath.

oppida wrote:
5. We have three children under the age of five.

You're obviously insane. 

But then, so am I.  I have twins and when we first opened they were 3-1/2.

oppida wrote:
Though we could live in the unit in the garage and be out of the guests way.  I imagine we would market the inn as family friendly (on certain weekends or throughout, depending). Can you tell me if I'm crazy to think we can raise a family with such small children and run a B&B?

You absolutely have to both be on board with the project.  My husband left a couple of years ago and I made it, but barely.  When we first opened, I couldn't have done it alone, but now that they're getting a little older it's a little easier.  The separate quarters will help tremendously... they can be messy and noisy and not bother anyone.  But can you leave them in the quarters while you are cooking, cleaning, and greeting guests?  That's where you need two people on duty. 

Now that mine are 8 I don't have to constantly be watching them... but I find that 8 year olds are far noisier than 4 year olds. (Who knew?)

I don't think it's crazy.  Personally, the whole reason I have a B&B is to train my kids how to work and run a business.  They have all kinds of interpersonal skills already.  And recently I talked to an accountant and learned that having them on a payroll will have a very positive impact on my taxes.  (Message me once you're up and running.)

You only have to market your inn as family friendly if your kids will be in the inn area.  If they are, then do, but that will not preclude you from getting guests.

oppida wrote:
My husband and I are familair with business plans, marketing, branding, bookkeeping, etc. I love to clean and cook and love customer service type work. 

All good.

oppida wrote:
My husband is an avid hunter and fisherman.

And maybe someday he'll get to go hunting or fishing again... someday... maybe....

oppida wrote:
Any advice, any answers to my questions, details about your day to day life, warnings, cautionary tales, anything to help us explore this idea fully would be super appreciated!!! Thank you!

Go back and read everything on this forum... it's all there, the good, the bad, and the ugly.

=)
Kk.

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Most supplies tend to go up and down based on number of guests. Soap, TP, linen etc are all this way. Food costs seem to run $5-7 per person for a great breakfast. I know that is a big range.  Don't forget processing and credit card costs.

 

with 3 children and a job, you would need outside help. Add some labor. 45minutes to clean a room.

Take a really good look at the property. How many rooms will have a king bed, jacuzzi,private bath and a fireplace? Not sure if the fireplace is needed across the country. Those rooms are your money makers. Any shared bath rooms are probably a waste of time in an area without a big draw.

Website and internet marketing turned out to be huge. Does anyone have experience with this?

I have been a B&B owner only 19 months but this is what I have gotten from reading this forum constantly.

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hello.

i would not buy it yet ... i would see if he wants to do a partnership to start.  AFTER he applies for and gets the necessary permits and licenses to convert to a b&b ... you might have to put in a fire alarm system, a sprinkler system, who knows?  only after the preliminaries, then you come in with a lease to own or some such arrangement.

you CAN make your place the attraction but you will have to create a lot of buzz. marketing and publicity is, in itself, a big job. do tourists come there already?

for an old inn, i had some bare basics but had to buy a lot. a lot.  dishes and silverware, tables and chairs, lamps, sheets and towels, blankets ... you name it. Extension cords and light bulbs. Every time I turned around, I was spending money. And I'm thrifty!

folks wanted wifi, do you have it? 

there were 8 bedrooms.  we had a fair number of metal bed frames ... but had to improvise on the head boards ... estate sales and thrift stores and yard sales fitted out the guest rooms with end tables, lamps and chairs ... you need quality mattress sets and pillows and mattress covers ... no skimping there. 

i got the place up and running but it needed constant repair and upgrade and so much more.  deep pockets (money) required. 

i definitely recommend you take an aspiring innkeeper course. i learned so much that way.  the one i took shared a formula for how to figure gross revenues and hard numbers about costs.  i don't have that info any more, it was in 2005.

best of luck to you.

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swirt's picture
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 5. We have three children under the age of five. Though we could live in the unit in the garage and be out of the guests way.  I imagine we would market the inn as family friendly (on certain weekends or throughout, depending). Can you tell me if I'm crazy to think we can raise a family with such small children and run a B&B?

You could, and probably should, start another thread on this topic alone.   Many people initially only consider the children impacting business side of the equation.   The other side of the coin is, how much of your childrens' lives are you willing to miss out on as a result of the B&B? When you run a B&B from your house, not only is your "on-time" not your own, but your "free time" is rarely under your control either.  You'll get free time, but you will rarely get it WHEN you need it. 

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When Inn keepers say that they don't make a profit, or very little profit, does this mean that their mortgage, food, and all bills are being paid but nothing left over after that?  I'm sure some people see a 'profit' different from how others see it.

I know for myself working outside the home and working for someone else, I only get my bills paid, and wonder sometimes how I'm going to feed my kids.

I know each B&B is different, but if I can ask, approx. how much does a 3 bedroom Inn make, or a 5 bedroom Inn make yearly?  Just rough ideas.  Just curious.

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Have you heard the phrase location! Location!! LOCATION!!! Whether  rooms or 10 rooms - it all depends on location.

When I moved back to West Virginia, I discovered what I paid for real estate taxes on a 900 Sq Ft house on a 100 x 60 lot would have paid  the real estate taxes on my 2350 sq ft house and lot (& I do not remember the dimensions of my current property but not much bigger than in Illinois) would pay the taxes here for 5 years. My insurance rates, utilities, etc are also minscule to what a location in California or New England would pay. But I cannot charge the rates and in my location do not have the occupancy they have. Profit? No salary gives a technical profit sometimes, but it pays the expenses of the house so it works out - IF you have another source of income. The B & B revenue is the part-time job salary that would be used to pay the expenses of the house if that makes sense.

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Olga wrote:

When Inn keepers say that they don't make a profit, or very little profit, does this mean that their mortgage, food, and all bills are being paid but nothing left over after that?  I'm sure some people see a 'profit' different from how others see it.

It means exactly that. The inn pays the bills, but it doesn't pay the innkeeper. That, of course is not true for everyone. Many, many inns make a wonderful living for their owners. My telling you what my inn grosses will make your eyes bug out of your head. And it won't help you in the least to figure out how much YOUR inn might make.

There are a few of us on here whose yearly mortgage payments are more than some other inns gross in a year. My fuel oil bill is more than someone else pays for her mortgage.

In business terms 'profit' is what is left over after all the expenses have been met. You really can't fudge what profit is altho big companies fudge how much profit there is! Sometimes 'profit' has a big minus sign in front of it. Then you are taking money from your slush fund to pay this year's bills.

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Olga wrote:

When Inn keepers say that they don't make a profit, or very little profit, does this mean that their mortgage, food, and all bills are being paid but nothing left over after that?  I'm sure some people see a 'profit' different from how others see it.

I know for myself working outside the home and working for someone else, I only get my bills paid, and wonder sometimes how I'm going to feed my kids.

I know each B&B is different, but if I can ask, approx. how much does a 3 bedroom Inn make, or a 5 bedroom Inn make yearly?  Just rough ideas.  Just curious.

It varies greatly with different areas, how much your mortgage and utilities are, occupancy rates for the area, amenities, specific locale, etc.. The best thing to do in my opinion is to buy the PAII (professional association of innkeepers international) industry study. It gives a lot of information about income, operating expenses, etc for different regions and size of property. You can find their website at innkeeping.org

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Upgraded does not = "commercial kitchen" accepted by the health dept

Check the cost of commercial insurance

 

As for how much you can make and how much are expenses, there is just no answer for that. Every Inn is unique, this is not like a Holiday Inn or a Comfort Inn where a corp office has done the math and can say "within x years based on x expenses in x area you should make Y'

Not to mention the economy

As someone who took over a struggling Inn - grew the biz 80% in the first year 7 years ago, 20% for the next 2 years and then the economy went south .. I am about to be foreclosed on. I had perfect credit. I was up to date with my morgage. I had no major debt. And like you I have had a 2nd work at home job for the last 7 years. For the last 4 every penny from my 2nd job went to paying every increasing bills (and that is NOT counting any Major or unexpected repairs like an AC unit being replaced).

100% of my income from the B&B and 100% of my income from my 2nd job went to just paying the bills. Can't do it anymore.

Unlike you where there are 2 of you, having someone who can bring in a guaranteed 2nd income and help around the place may make things different, but that probably means you would have to hire help. Having a nice property does NOT mean it will be a successful B&B, and I had 20+ years of HOTEL management experience behind me

I am not saying you won't make it, but I don't know how many Innkeepers would say "right now" that things are "so good" that they have no concerns at all above their business

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That's funny...leave it to CA to legislate something like bathrooms at a B&B.

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If you think you're going to make a profit or even pay all your bills and expenses the first couple of years, I'm afraid you'll be very disappointed. Most start up b&bs are in the red for at least 3 years.

In CA you must have private baths. You're in the land of the demanding, whining, picky population. I know it's a stereotype, but just ask other innkeepers here where a lot of their PITAs come from. Years ago there was an innkeeper active on this forum who had a beautiful property in northern CA, rural, with acreage and 3 separate cottages along with the main house. The people she had to deal with were some of the most demanding guests you could imagine. She only lasted a few years there before all the guests zapped the 'hospitality' out of her...and she had a lot of experience before opening up this one in CA. I'm not trying to scare you off, just giving you a dose of reality.

What's going to be in this for you and your family? The property & house is owned by your Uncle-in-law. You won't get the tax benefits and if you're looking for a salary, please re-read my first paragraph. Will you be paying your Uncle rent? Will he be a partner in the business?

You say you're in a small town with only 2 restaurants. What's going to be the draw for guests to come to that area? If you make your b&b a destination, then you'll spend lots of time and money doing escorted fishing/hunting/outdoor experiences. Your insurance will be incredibly high if you take them out yourself or provide a boat, kayak, horse, etc.  Just to give you an example, I'm in a state to the north of you, have a few acres, 3 rooms in the main house and a cottage with a small separate innkeeper quarters and we have to pay $4,000 a year for our b&b insurance and it keeps going up every year. CA insurance is much higher than ours.

To make all this work the way you want it to, you must have a stash of cash. You also need health insurance. You didn't mention if your husband will continue working and bring in some money and benefits.

Please, please, take an aspiring innkeeper seminar! Invest some time and money in a seminar/workshop and get some hands on experience if you can.

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I would first check the tourism in your area and if there is any, is it couples or families? I know an innkeeper that had a luxury B&B in the Mendicino area I think it was and she said it was difficult. She sold her B&B and it is not a B&B anymore.

You need tourism to book rooms. And each room or suite needs a bath in California. I'm from Northern California myself and some of our most difficult guests are from that state. The ones we get would NEVER accept sharing a bath.

Are you near any wineries? History? on a Driving route from one tourist area to another? Near the sea?

Location, I think in these economic times, will make or break.

Does your uncle understand that a B&B will most likely just support you (if you are lucky) and that he will not see any profit? 

We are in a destination where we do make a profit because of the popularity of the Virginia wine country. We also make a profit by adding the wine tours. But we also pay a mortgage every month, which I assume you will not so that could go to your uncle. Probably if all worked out he would have his mortgage paid by the business, but that may be it.

You can't just figure booking the rooms and the money it will bring in. You have to figure insurance, taxes, (my husband works in the biz 100% and has to pay over $3,000 every three months) and cost of running the business.

RIki 

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We can talk you into it, or out of it. Which would you prefer?

I will speak to your question about raising a family while running an inn. Three small children, you say? Well, you need to ask yourself how they behave in public settings. How are they around strangers? Are they content to wait until you stop speaking to say 'excuse me' to interrupt to get your attention, or do they pull on your shirt and say, 'mommy, mommy, mommy, MOMMY!!!'?

If you're marketing to families with children (do make sure rooms will accommodate), then the families will find your children charming and will want them around for instant playmates for their kids. However, if your primary market is couples who are getting away from their kids for a night or two, then they will NOT find your kids running around the house nearly as charming.

Keep your owners' quarters as separate as possible. You, and the kids, will need your 'down' time, though YOU won't get much of that unless you have help. This is what a typical school-day is like at our house (mind you, I only have 1 child) - Get up at about 6:15am, shower, fix breakfast for dd (dear daughter), drive dd to school, return home and start on breakfast for guests; serve breakfast to guests; clean up dining room; checkouts; finish cleaning up kitchen; then on to rooms (fluffs and turn-overs) until about 1-2; laundry & ironing; oh, yeah, forgot to eat breakfast or lunch; eat something before blood sugar falls thru my feet; dd arrives home just before 3; keep ear open for guests arriving at the front door while at the same time dd is telling me about her day and I'm reviewing homework to be done while emptying the dishwasher and setting the table for the next morning; guests arrive; try to find time to start some dinner as there are other people in this house who need to eat; DH (dear husband) arrives home from work (somebody has to earn an income around here and keep us in health insurance); feed dd and take her and friend to cheerleading practice; return  home (thank god for the carpool!); have dinner with dh; guests arrive late just as I'm taking 2nd bite of hot food; check-in guests; advise guests where to eat dinner; return to table and finish cold food. DD arrives home from cheerleading; supervise more homework and getting ready for bed (dd, not me); greet last of late-arriving guests; turn out lights and go to bed. (re-reading this makes me tired)

I have many close friends in the area who are innkeepers. I'm really involved in our local association. I've seen the 'innkeeping with kids' thing work, and I've seen it NOT work. It works when you have a good handle on organization and a great support network. It does NOT work when you're in over your head and have to do everything yourself with no help from (extended) family and/or friends. Maybe it would work if you have an unending supply of cash and can hire someone to do the cleaning, cooking, laundry, marketing, reservations, and maybe a nanny, too. (just kidding)

For example, there's one B&B here in the area where the family has something like 6 or 7 kids. The house is cluttered, dark and dirty and the guests notice! They're on a slow, painful sprial downward. It's sad, and I really feel badly for them.

On the other hand, I've seen some B&B families here thrive in their business, because the whole family pitches in and the positive energy spills over to the guests.

Just my 2 cents (ok, maybe 4).

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Welcome. There are lots of posts here we have given to people with the same start up questions. Look around and read. I echo the other's sentiments. I warn however, no one is going to give you start up money today especially given the economy right now. If you don't have money to do this yourselves, then you had better wait until you do.

Oh these days...people DO NOT want to share bathrooms. You need to find a way to work this out.  

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 Thank you, thank you and more thank you. Your experience, advice and wisdom is so very helpful! I've been reading your responses over and over to make sure they sink in as I wrap my head around this possibility!

Thanks again.

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Also RUN do not WALK to a GOOD attorney to have everything (and I mean EVERYTHING) spelled out as to who does what financially re start-up, future purchase, during the contract of operation, dissolution of contract - who can quit how, etc. Have it spelled out in a legal contract. In my Aspiring classes I tell them if it is anything other than a sole proprietor, spell it out legally FIRST. I have seen B & Bs close because of divorce when one really wanted to stay a B & B and I know of an inn that the cousin owned the property and begged "come run it". After 3 years, money (not counting time) invested, the cousin got religion and turn the place into a religious retreat - innkeeper cousin out on ear.

As long as Uncle owns the property, cover thy butt and spell it out - in a contract.

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The property sounds NEAT... lots of potential.  As K mentioned the first is CAN it be zoned for this?  Contact the zoning office in the area, get all the info in writing as what if anything needs to be done to be licensed in the area and as for fire codes usually you can get them to come out and do a unofficial walk through to let you know what would need to be done. 

Once you know it can be done legally, then you can start your search for insurance quotes.  As K said having horses or any activities on site does lead to more liability issues and insurance needs. 

Once you have done the steps above and get then you may consider -

Contact the area Chamber, the economic development office and the local and/or state B&B association for answers about the area, other businesses and they may offer additional suggestions and assistance. 

Do your research by googling other B&B's, lodges and farmstays.... to help you determine what may work for your area. 

Once you are ready to put money into the idea, you may consider speaking to an attorney to determine the best way to set up your business... it maybe better to keep the B&B separate from the livestock business...

Regarding the 5 bedroom/3.5 bath issue, since you are considering a family friendly property, a thought - depending on the floorplan - is to make them 2 bedroom/1bath suites so familes would share. If not that, maybe there are other options to ponder over.

One other point to consider here is that this is a heck of a lot of work you are speaking of with the B&B - marketing, bookkeeping, reservations, cleaning, breakfast (possible other meals) gardening, horses, general yardwork.   It seems like a charming life but there is a lot of work involved....  think long and hard.  Make sure you attend an aspiring innkeeping class before jumping into the water!!! 

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First, before ANYTHING check Codes - zoning, building, fire, health - and GET IT IN WRITING!!!

Shared baths will be a challenge - I have 1 room with pvt ensuite bath and 1 that share a bathroom - so I know from where I speak. It will work for families or friends traveling together - usually - better than for the general public. I have had many book a "shared" room because of price being they are 95 and the pvt bath is 129. It would not work well in a city but you are country.

If your husband qualifies as a "Fishing Guide" that would be one of your extra fee packages (IF you are permitted to pack lunches, that could be part of the Fishing Package.

There are several here who have children - some have young ones.

Insurance will vary per location, size of property, structures, what you do, etc, etc. I can tell you that if horses are involved - grab your ankles. I do overnight stabling but do not touch the money so I am not liable (sort of) - they leave cash or check for the farmer at the stable. I am by a rail-trail and have 2 bikes & helmets in the shed for guests to use - but do not rent them (suggest a donation to the local food bank for using bikes).

There are so many variables on costs because utility rates are so varied also.

Forgot to add: Welcome

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