Aspiring Innkeepers - what's the biggest hurdle that holding you back?

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stayparrysound's picture
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Hi All!

I remember very well making the decision that I wanted to own a bed and breakfast; and the fear that followed me as I made my torturous journey to actually getting my bed and breakfast doors open.  It ended up taking me 5 years..two years doing research (and waiting for kids to get big enough to kick them out! - the standing joke in my family is that not only did I sell the family home and leave town, but I rented out their beds too, so they couldn't come back!) and then three years searching for the right property.

My motivations were personal - I had burnt myself out twice in doing work that I truly did love and was very good at; I wanted to find out if I could create and run a business on my own; I wanted a more flexible schedule and the ability to pursue some of my hobbies and other interests.  My biggest fear was whether I could make enough money to live on and still run the type of B&B I wanted.

I finally had an ah-ha moment when I realized that even though the motivations were personal, I needed business results to overcome my fears, and I have been OK for the most part since then.

As many innkeepers on this forum will tell you, we all have many guests sitting around our breakfast tables who tell us that they would like to have a B&B one day...but they never do anything about it - it's more like a daydream.  But if you have paid to be a member of PAII and seek out learning opportunities, then I would think that you are far more serious than those daydreamers I just mentioned.

So, I go back to the title of this post - what's the biggest hurdle that is holding you back from having your own bed and breakfast?

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Susan Poole, The B&B Coach
40 Bay Street Bed & Breakfast

 

Breakfast Diva's picture
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I find that it's two things that are intertwined.

  • Realistic expectations of what a b&b will cost to buy and run
  • How to get financing. The banks are getting a little better with loan for our industry, but I'm afraid most aspiring innkeepers don't realize that it's much more difficult to get a loan for a b&b than it is for a regular house.

 

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04/21/2010

It is getting a bit easier but as a seller we are finding that the biggest hurdle is financing. Yes, it would be nice if everyone did adequate fundraising before they decided to buy but not very realistic. 

Like I mentioned though it looks like we have finally seen the light at the end of the financing tunnel in that there is money out there for workable deals. 

The Safford Inn's picture
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In my situation, my fear is doing all the research, development, numbers and marketing lists and then being edged out all together since I am not backing capital; I'm the spark plug, worker-bee.  Trust that my efforts will not be betrayed is my fear.

If I had the money (and working capital for at least 5 years), I would just go for it.  At my age and having had to retire  from a vocation (44 years Pro. Domestic Service), that I can't do anymore, this was a dream that feels close but tenuous.

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When you risk nothing, you gain nothing and that dream becomes a fantasy.

 

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The only thing stopping me is money. I have been doing research for about 10 years. I have just joined this forum because I plan to do intense fundraising and capital building in 2014 and I look forward to any insights that I may be able to glean from you.

__________________

“I am grateful for what I am and have. My thanksgiving is perpetual…O how I laugh when I think of my vague indefinite riches. No run on my bank can drain it, for my wealth is not possession but enjoyment.” ~Thoreau

 

Madeleine's picture
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Hate to say it but researching a job for 10 years is a mighty long time. If you don't know for sure what you want after one year it's time to move on to another idea.

'Fund raising' and 'capital building'? You're looking at another 10  years unless you mean to crowd source your nest egg.

Which is an interesting idea. 

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Everyday, for good or ill, we intersect with some else's story and become a part of it.

 

Skamokawa's picture
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Oops. Pushed save button twice. Wil just add that reading the previous forums plus one from UK that subsequently became private, helped keep the motivation factor up. this forum is aptly named.

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Twin Gables Inn
On the Lower Columbia Water Trail

 

Joey Camb's picture
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if it was bedposts this is now private but any B&B owner from anywhere in the world can join or rejoin if they want to  - we have just accepted some French members for example.

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Skamokawa's picture
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Some time ago, a previous forum member told of planning and preparing for 17 years. Ended up successful. That is sustained determination for sure. I know I had the dream/wish/I can do this part in my head for a good ten years before I was in a place where I could make it real.

A while ago I read a real estate agents comment that if the prospect doesn't buy in three months, they're not serious. We were very serious. just took a long time to make the right purchase. Could simply not afford to make a wrong one.

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I think time is relative if you have the tenacity. I have gone through much in life an have always kept this dream at the forefront. 

I should have used another term, rather than fundraise. My family will be doing everything it takes to make 2014 a savings year so that 2015 can be the purchase year. 

We are trying every/any legal method. 

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Not really. I needed to ensure that I was not jumping into a dream. I worked as an innkeeper assistant part time for 7 years. During this time, my husband went to culinary school. I have gotten certified in event management as well. I also wanted to learn about livestock and homesteading and have done that as well.

I would rather know more than less. And yes, fundraising is very hard. However, I have raised millions for others, so now I am trying it for myself. I am not starting with $0

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05/22/2008

I too had the dream and planned for more than 10 years. I just knew it was something I would do when I retired. To that end, we saved for years so we would have the cash. Fundraising sounds very ominous to me. If you are aiming to get people to invest in your B & B...that is troublesome and you are asking for alot of problems. Unless you are going for a large inn in a prime location which will bring in lots of $$$, you aren't going to make enough money to pay investors back.

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Our first attempts at fundraising will be to sell off all possessions. We have saved enough where every penny that we make in 2014 will go towards the B & B.  The property we want is 600,000 but it is productive property (besides inn has operating orchard) we have the cost of the property but need more. 

Anyhow... I'm going to try!

Madeleine's picture
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Good that you got experience during that time. When someone just jumps in here with no intro and says they've been researching for 10 years it doesn't always come across as you've been doing rather than dreaming.

Lots of excellent advice here. Altho, I would guess a lot of folks here did their fund raising by selling a house or raiding a retirement fund.

One very important factor, as you will know from fund raising experience, is to always raise at least 30% more than you think you need. We needed an additional 70k just as a cushion when we started.

 

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Thank you for your reply, Madeleine. I got too excited at finding the site and did not see all of the forum categories and just jumped right in. I will find my way to make a proper introduction.

Fundraising seems to be the only avenue for us right now. We both have good credit and live simply and within our means but are not able to get a loan for a B & B. A hotel, yes; a small (micro) business loan- maybe after purchase.

 

Arks's picture
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Rachael wrote:

...I plan to do intense fundraising and capital building in 2014...

Sign me up for some of that.

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All saints can do miracles, but few of them can keep hotel. ~ Mark Twain

 

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Arkansawyer that's my job now (fundraiser) and now I am turning my attention to myself. 

Lea Ann's picture
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The house we are in the process of purchasing is in a small town (only one stop light). We don't have any tourism, but we have a small college and have some large businesses a few miles away. Though they have a couple of hotels, one is very old and the other is just eh. The only other hotels are close to 30 miles away. So we know we won't be full very often. We also won't be living on the property. My hubby and our partner are thinking about putting a small apartment in so we would at least have some kind of income coming in monthly to offset expenses. Have any of you had any experience with this? 

 

Thanks

Madeleine's picture
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Make sure you can legally operate with no one on premises overnight. Many insurance companies won't write a policy if there is no one there in event of emergency. Many towns/counties/states won't allow an unoccupied B&B to be licensed.

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10/08/2013

Thanks for the warm welcome ... look forward to interacting with you on this forum ... My wife Karen and I are learning a lot already ... the proverbial baptism of fire ... and the high tuition rates of "challenging" experiences.

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Bruce
West Ridge B&B, Etown PA

 

Joey Camb's picture
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just remember the mantra "they pay they stay they go away!" lolwink

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Welcome Bruce!

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Aussie Innkeeper's picture
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Those of you who are looking, have you considered La nca ster, PA? There are  many for sale here...at good prices! The area gets almost 12 million tourists a year. There is a very good CVB, too. If you want more info, message me.

No, I'm not on commission. LOL. I just like to see the old, tired properties brought to life when new innkeepers buy them. 

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Lynne
Queen of Everything!

 

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Aussie Innkeeper wrote:

Those of you who are looking, have you considered La nca ster, PA? There are  many for sale here...at good prices! The area gets almost 12 million tourists a year. There is a very good CVB, too. If you want more info, message me.

No, I'm not on commission. LOL. I just like to see the old, tired properties brought to life when new innkeepers buy them. 

My wife and I are in the process of purchasing one in Lancaster County ... and hope to "bring it to life!"

Breakfast Diva's picture
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Welcome Bruce! I hope all goes smoothly in what can be a difficult process.

gillumhouse's picture
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WOOHOO!! Welcome.

Madeleine's picture
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Bruce Mac wrote:

My wife and I are in the process of purchasing one in Lancaster County ... and hope to "bring it to life!"

Welcome

Aussie Innkeeper's picture
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Bruce Mac wrote:

My wife and I are in the process of purchasing one in Lancaster County ... and hope to "bring it to life!"

Welcome to the neighborhood, Bruce! I am the self-appointed 'welcoming committee' for new innkeepers here.

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Finding the right place for my family that we can afford. We have kids do need lots of space to make it work. We saw one that was just about perfect but the lot was too small and I can't put two kids in a three room apartment. We are actually looking at buying something with room to grow because we can't afford to buy the perfect place so iffy books are not necessarily a deal breaker But not the lady who, when asked about occupancy, said oh, no idea. People just come up sometimes. That is beyond iffy to me.

We have been actively looking for about six months now and are going on a quick two day trip later this month to check out a few more properties.

TheBeachHouse's picture
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Money.  And the right house.  I would not be able to live in a dark back room hiding from the guests.  So many B&Bs we looked at had tiny, cramped owners' apartments.  The one we bought is a five room apartment with ocean views and lots of closets.  I can live like that.

 

 

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TBH

 

Madeleine's picture
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TheBeachHouse wrote:

Money.  And the right house.  I would not be able to live in a dark back room hiding from the guests.  So many B&Bs we looked at had tiny, cramped owners' apartments.  The one we bought is a five room apartment with ocean views and lots of closets.  I can live like that.

 

 

Heck, I could live like that, too! We don't have views here but I have a great south-facing wall of windows for sunlight. Like you, that whole basement/back room/corner cupboard thing did not work. I have to have massive amounts of daylight.

Highlands John's picture
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Like others, once we'd decided that B&B was what we were going to do, finding the right property was the thing that took the longest. We looked for 2 years at places all over the UK. Wales, couldn't find anything suitable, South West, too short a season, Lake District, too pricey. We wanted an older property so this place was on the "maybe" pile as it was only a couple of years old. The previous owners had done a little B&B, but not much so it was almost a new start.

I'd like to pretend it was a skillful business decision based on lengthy analysis of data we'd gathered. The truth is we had no idea what an ideal location this house is in for B&B and we were very lucky that we started just as the Internet really got going for accommodation booking, so my IT skills were invaluable.

 

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If you wanted hotel facilities you should have booked a hotel and paid hotel prices!!!

 

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My biggest hurdle is finding the right B&B. I want one that's operational, and that isn't OVERpriced. Too many innkeepers are enamored with their property, house, furniture, etc. 

But, it's a business. I hear things like 

"well, we don't keep detailed books"

"if we stayed open more during the year, or did this or that, we'd (or you'd) make more money" Sure, but I have to do that work.

"occupancy rates can be higher". Sure again, but they're not

Owners/sellers don't understand that the basic price is a function of 

1. Price per room

2. A multiplier times revenues (or profits)

3. The number of rooms

__________________

Jules - aspiring Innkeeper

 

gillumhouse's picture
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edgehill2014 wrote:

My biggest hurdle is finding the right B&B. I want one that's operational, and that isn't OVERpriced. Too many innkeepers are enamored with their property, house, furniture, etc. 

But, it's a business. I hear things like 

"well, we don't keep detailed books"

"if we stayed open more during the year, or did this or that, we'd (or you'd) make more money" Sure, but I have to do that work.

"occupancy rates can be higher". Sure again, but they're not

Owners/sellers don't understand that the basic price is a function of 

1. Price per room

2. A multiplier times revenues (or profits)

3. The number of rooms

Not all are like that. This is "my baby" that I started from scratch. There is potential because due to getting old and having bad knees, I do not want to do dinners any longer. I am branching out and hoping to do elopements but we will have to see how that turns out. BUT my city NEEDS a B & B. I am planning to sell my B & B for the price of the house - and the furnishings are a bonus. All I am planning to take is my personal stuff (that includes the artwork) and whatever the new owners do not want. I will be turning over a B & B with an excellent reputation that has had publicity nationwide. I cannot put it on the market, however, until DH goes out the door feet first. He does not like change and his crap has to be removed before anyone in their right mind would consider this place. He is in his 70s and I got a wake-up call yesterday at how close I am to it! So it will be a while yet.....

 

But Maddie is correct - the FIRST thing to consider is  - Will I like living here. Will you like living in a small town or medium city or tourist area. Will you like the PEOPLE and will you be able to be accepted by THEM! (Most important in a small town/city.)

DH had never lived anywhere except the burbs of Chicago until moving to my West Virginia. I thought it would be OK for him since the activities he enjoyed were more available in WV than in Illinois. I was right. BUT being accepted here was easier for him because I was from WV - although still an alien since I was not from HERE. We both got involved in the city, me more than him, but he really is a semi-hermit so it has worked out. He has been asked to read poems of Edgar Allen Poe for a program the museum is doing this month. DH has a very deep voice. 

These are things to think about REAL hard before deciding on a B & B to purchase. If you find you do not like the area after all, it will be a living hell for you. I did 24 years in Illinois, I know from where I speak.

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edgehill2014 wrote:

My biggest hurdle is finding the right B&B. I want one that's operational, and that isn't OVERpriced. Too many innkeepers are enamored with their property, house, furniture, etc. 

But, it's a business. I hear things like 

"well, we don't keep detailed books"

"if we stayed open more during the year, or did this or that, we'd (or you'd) make more money" Sure, but I have to do that work.

"occupancy rates can be higher". Sure again, but they're not

Owners/sellers don't understand that the basic price is a function of 

1. Price per room

2. A multiplier times revenues (or profits)

3. The number of rooms

There is no one B&B out there with everything. You have to find one where you want to live (very important that you LIKE where you will be spending all of your time).

And, the owners are giving you perspective on how YOU can increase revenue. This is a gift of information. Of course YOU then have to do the work! I've got a list of things the next owner can do. I don't want to do them. They're not my style but they very well could be the right up the next owner's alley. Converting my office into meeting space is one BIG idea I will pass along. Me? I don't want to host meetings and bridal showers and the like but someone else might want to do that.

You can BUY a 100% occ inn and then what? How do you improve that? OTOH, if you buy a place that the present owners are using as a 'lifestyle' B&B you can keep it open year round and make a lot more money. That is not a bad thing.

I would stay away from places with no record keeping. They may also not be licensed.

Obviously you have not found the right property yet. Not everyone selling is 'enamored' of their inn, but many have a right to hold out for a fair and reasonable price. An inn with all the improvements done is worth spending more than a broker says to because the work is done. The clientele are in place.

 

Joey Camb's picture
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See I don't know that crappy books would put me off - ie we bought our place with no books to really speak off!

we could see from the bones of the building we could add 4 more large bedrooms out of what was the owners quarters and convert the basement into a flat which increased turnover.

Couple were divorcing and basically were spending as little time here as possible (him mainly in the pub)

Décor was shocking carpets and beds were worse, but it had what is the most important thing in our town - location and car parking

Anon Inn's picture
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"Owners don't understand the basic price is a function of:

1. Price per room

2. A multiplier times revenues (or profits)

3. The number of rooms"

Agreed.  Many don't.  You may have to wait on the property until  that reality penetrates their heads.  For many who got into this business x years ago, it was as much a lifestyle choice as a business decision.  That kind of emotional component to the asking price persists for a lot of properties, even though the economic climate is much harsher now. 

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PS YOU can make MORE money depending on what you choose to do. Example we don't do weddings or elopements, I know some B&B's who ONLY do this and make more $ than just room nights. We don't do them, and don't plan on doing them.  There are dinners and functions and more. We can only do what we do and what we wanna do. 

Potential is a word that every B&B has, we can always increase revenue stream, just depends where our hearts are!

All the best in your search!

Joey Camb's picture
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plus in some places doing a bit more marketing - ie round me you could easily make 30% more just by being a bit more on top of things

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edgehill2014 wrote:

My biggest hurdle is finding the right B&B. I want one that's operational, and that isn't OVERpriced. Too many innkeepers are enamored with their property, house, furniture, etc. 

But, it's a business. I hear things like 

"well, we don't keep detailed books"

"if we stayed open more during the year, or did this or that, we'd (or you'd) make more money" Sure, but I have to do that work.

"occupancy rates can be higher". Sure again, but they're not

Owners/sellers don't understand that the basic price is a function of 

1. Price per room

2. A multiplier times revenues (or profits)

3. The number of rooms

and buyers and inn consultants don't give the HOUSE any value whatsoever. With that pricing, we can sell it as a private home for more than a fully operational, turnkey business.

Be careful with innsultants, oops I mean inn consultants.  The inns that are feasible will be in the $1.0-2.5 mil range. So you better have a decent 3/4 down payment to cover the mortgage/bank.

Joey Camb's picture
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for us it was money and finding the right property - we wanted somewhere bid enough to support a chamber maid as I am realistic enough to know I don't want to clean toilets every day!

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