Questions for Innkeeper when purchasing an inn

[Garden_Pix_Inn]

Zoning in writing. Just because it is currently operating does not mean it will be legal once sold. My City got zoning AFTER I opened. Existing businesses were "grandfathered". Some may require a variance to continue if passing to a different owner. MY B & B is OK because I am in a mixed use (both residential and commercial). AND since I am on the Zoning Commission, ensured a B & B can be located in ANY district in my City., The Mayor sheepishly said in a Develop,emt Authority meeting (yes, I am on that too) that we need more B & Bs in our City. He was surprised when I said (almost shouted) YES, PLEASE!!!
The suggestion about the "lay of the land" is also excellent. Get the town newspaper - read back issues to see what is happening in the town. Are there empty storefronts? Does the town look like a place people would come to and enjoy enough to return? THIS should be your responsibility to check out.
I also agree with the previous comments about financials - YOURS and theirs. It is not fair to them to go through the answering your questions about THEIR financials if yours are not in order. Questions to ask would depend on the size of the B & B, the laws of the City/County/State regarding its operation (meals permitted, facilities required (remember grandfather), is innkeeper required on-site (will you be living on-site), are there any "grandfather" clauses that die with the sale that will cause more $$$$. Utility costs - what are they.
Good luck to both you and the seller..

Owners cannot--and should not-- speak to zoning for a number of reasons, the first of which is it is NOT on them as the person leaving. Second, they have no standing and cannot change what is "reality." (3) they might not even know the truth or understand the laws (we are more skilled than most and WE won't speak to it for you). [See below]
Instead, it is up to the buyer to go to town hall or county zoning dept. and find out the truth from the horse's mouth.
Note: [We went to town hall and ASKED before buying our inn.] My husband was a real estate attorney. I was a reporter covering zoning and such, dealing with the building dept. weekly. We would NEVER sign a sale contract making the sale contingent on zoning. We aren't hiding the truth--we just aren't taking on YOUR issue. PS my zoning won't change when we sell, "I think."

 

[gillumhouse]

Thanks everyone. The inn is in a fairly large city. We got the financials and some response from the owner. It looks good on paper. There is a small staff and good occupancy rate. We have a million questions for them and ourselves. We will find out more this week but you all brought up some great questions..

I can appreciate holding your cards close to your vest. Perhaps you can share more later. ( or not) Sounds like you are fully financed and trusting the paper they gave you. So if you truly are down to the operations, Small staff? Occupancy rate?
Best wishes on your adventure, but one last thought from another thread.
What do you want to be? What expertise do you plan to promote? How do you plan on becoming a singular experience? What passion is driving you to own an inn? What's your niche? Why on this green earth would I want to stay with you? Hopefully its not because your a clean comfortable bnb two miles from the world's largest ball of twine. Hopefully its because you have something to offer I can't get anywhere else and I want what that is.
.

Occupancy is above 50%. There is a small staff in place. Thanks for you thoughts.
.

Best wishes on your efforts.
Occupancy is a slippery measure. We don't even look at it anymore.
The EBITAD or the Net Revenue Before Taxes( I think that what it's called) is less slippery.
Occupancy can be manipulated rather easily. How much money was made before you took advantage of your deductions is a little harder to fudge, but even there, you have to be on the look out for if the books are cooked. Were maintenance costs hidden, payments excluded, or owner's salaries manipulated.
.

salaries? Owners have salaries?

 

[Garden_Pix_Inn]

Welcome Lisa. Here's an interesting question to ask yourself before you go forward - is it the cooking that you love or having guests stay in your home and being on for most of the entire day that you'll love? I just had a guest stay with us this week who owned both a restaurant and then a small inn. I asked her which she preferred and without hesitation she said the restaurant because "at the end of the dinner service, I could lock the door, finish up and go back to my home until the next day." I think this is way more important that the operations of the inn and one most of us probably didn't investigate long enough before moving forward. I would certainly want to know the following:
1. income after expenses and debt service (will you have money to live on and take your own vacation or will it all be in the business)
2. how many hours do the innkeepers work a day on average
3. how much outside help do they have an does their help turn over every year -- very difficult finding good housekeeping help
4. Is the business very seasonal? If so, you'll want to be sure to take deposits on reservations so that you have cash flow over the year to survive
5. as others have said, zoning -- be sure that they've got everything done right or you could find yourself with costly upgrades like sprinklers, etc. if they have recently become mandated; also find out what is going on in the Town. Is it growing or dwindling? Any projects like landfills, groups against the Town growing, etc. that could lessen your business in the coming year. We had originally been going to build in one town and when I bought their local newspapers found out an inn's construction had been halted by a group trying to stop any development in their town. Cost the innkeeper tons of money. It's good to know if a town takes favorably to their businesses. Also, see what the planning board has recently approved - if any other hotels or inns are coming in which could take some of your occupancy away. We built at the same time that a local inn was selling and we have better occupancy than they do now and they have put all of their rooms on the OTAs.
6. if you want to do dinner, what is required for you to do so? You'll probably need a full commercial kitchen (along with fire suppression) so will it be worth it with the expense? Are you going to do breakfast and dinner? That's a really long day and why I haven't opened our restaurant yet even though I have the space and a commercial kitchen ready. I don't want to work 16 hour days. If you're going to hire help to do either breakfast or dinner, be sure the cost of the chef will leave you with a reasonable ROI.
7. what will you do about healthcare? I pay over $800 a month for a plan that only gives our family of 4 one physical a year and my mammogram - basically the only thing affordable to small business owners is what I refer to as a "god forbid policy" - it's in case we get seriously injured or sick and then we also have to cover the high deductible. A lot different than when I worked in the corporate world and one of the biggest expenses innkeepers have to figure out if they aren't working outside of the inn
8. after you've answered all of the above, is the scenario at the inn you're considering going to provide you with the life you want?
Good luck..

#2 - reminded me of a pizzeria many years ago we looked into buying. Working owners said it make $X net profit. I asked, do you pay under the table? Seemed the labor $$$ wasn't right for the financials. Also, I asked, how many hours do you work here weekly? He said "100" I asked, "and your wife?" "100". Basically, if all the numbers were correct, they each made about $7 an hour, not counting the payments we would have had to make to buy the business. And of course, self employment tax, the risk, etc,
Net profit is AFTER reasonable owner's salaries. That is why biz buy sell . com type sites call it "owner benefit" or hint at tax savings. In other words, the business might be unprofitable and they are trying to spin it.
There is a reason they are selling. It is rarely because they are full and happy with so much money they just want to move on with their lives. Watch restaurant or hotel impossible, etc. The frustration, anger, hostility, heavy debt of the owners will be YOU, if you are not careful!!!
.

There is a reason they are selling. It is rarely because they are full and happy with so much money they just want to move on with their lives.

And sometimes you simply want something else.... I think 23 years (for us) is far more than enough on one job, even a great job!
Also, health. We are 65+. I can tell you, it is NOT the same at 48 as 64....
Do ask WHY. DO ask to see their tax filings. DO understand that most restaurants seem to cook the books (of the ones where I knew what was going on) and do know there are honest innkeepers out there.
I got Resnexus for reservations and accounting for just that reason.
Also, don't hold it against us IF the housekeepers don't stay for a decade. The kind of people who do housekeeping always move along. It is sometimes a blessing to keep changing them up.

 

[user 26]

Update since this thread has resurfaced - I see that it looks like one can make a rez at the place in France in limited timeframes. Very curious! Hope all is okay there ...

 

[gillumhouse]

Zoning in writing. Just because it is currently operating does not mean it will be legal once sold. My City got zoning AFTER I opened. Existing businesses were "grandfathered". Some may require a variance to continue if passing to a different owner. MY B & B is OK because I am in a mixed use (both residential and commercial). AND since I am on the Zoning Commission, ensured a B & B can be located in ANY district in my City., The Mayor sheepishly said in a Develop,emt Authority meeting (yes, I am on that too) that we need more B & Bs in our City. He was surprised when I said (almost shouted) YES, PLEASE!!!
The suggestion about the "lay of the land" is also excellent. Get the town newspaper - read back issues to see what is happening in the town. Are there empty storefronts? Does the town look like a place people would come to and enjoy enough to return? THIS should be your responsibility to check out.
I also agree with the previous comments about financials - YOURS and theirs. It is not fair to them to go through the answering your questions about THEIR financials if yours are not in order. Questions to ask would depend on the size of the B & B, the laws of the City/County/State regarding its operation (meals permitted, facilities required (remember grandfather), is innkeeper required on-site (will you be living on-site), are there any "grandfather" clauses that die with the sale that will cause more $$$$. Utility costs - what are they.
Good luck to both you and the seller..

Owners cannot--and should not-- speak to zoning for a number of reasons, the first of which is it is NOT on them as the person leaving. Second, they have no standing and cannot change what is "reality." (3) they might not even know the truth or understand the laws (we are more skilled than most and WE won't speak to it for you). [See below]
Instead, it is up to the buyer to go to town hall or county zoning dept. and find out the truth from the horse's mouth.
Note: [We went to town hall and ASKED before buying our inn.] My husband was a real estate attorney. I was a reporter covering zoning and such, dealing with the building dept. weekly. We would NEVER sign a sale contract making the sale contingent on zoning. We aren't hiding the truth--we just aren't taking on YOUR issue. PS my zoning won't change when we sell, "I think."
.

We always tell the BUYERS to go to the City Hall/Courthouse re zoning/building codes/etc and get it in writing. Being new, you are unaware I am on the Zoning and Planning Commission for my City since we got zoning. That is why I know to say do not take it that since it is an existing B & B that it will be when you buy it. Mine will be because #1 - I am in a mixed use district and #2 - I ensured when we were adopting Codes that a B & B can be in ANY district in our City. Too many have neglected this to their sorrow. What we grandfathered in when enacting our Codes will often NOT transfer to a new owner - ie body shop business.

 

[Joey Camb]

Zoning in writing. Just because it is currently operating does not mean it will be legal once sold. My City got zoning AFTER I opened. Existing businesses were "grandfathered". Some may require a variance to continue if passing to a different owner. MY B & B is OK because I am in a mixed use (both residential and commercial). AND since I am on the Zoning Commission, ensured a B & B can be located in ANY district in my City., The Mayor sheepishly said in a Develop,emt Authority meeting (yes, I am on that too) that we need more B & Bs in our City. He was surprised when I said (almost shouted) YES, PLEASE!!!
The suggestion about the "lay of the land" is also excellent. Get the town newspaper - read back issues to see what is happening in the town. Are there empty storefronts? Does the town look like a place people would come to and enjoy enough to return? THIS should be your responsibility to check out.
I also agree with the previous comments about financials - YOURS and theirs. It is not fair to them to go through the answering your questions about THEIR financials if yours are not in order. Questions to ask would depend on the size of the B & B, the laws of the City/County/State regarding its operation (meals permitted, facilities required (remember grandfather), is innkeeper required on-site (will you be living on-site), are there any "grandfather" clauses that die with the sale that will cause more $$$$. Utility costs - what are they.
Good luck to both you and the seller..

Owners cannot--and should not-- speak to zoning for a number of reasons, the first of which is it is NOT on them as the person leaving. Second, they have no standing and cannot change what is "reality." (3) they might not even know the truth or understand the laws (we are more skilled than most and WE won't speak to it for you). [See below]
Instead, it is up to the buyer to go to town hall or county zoning dept. and find out the truth from the horse's mouth.
Note: [We went to town hall and ASKED before buying our inn.] My husband was a real estate attorney. I was a reporter covering zoning and such, dealing with the building dept. weekly. We would NEVER sign a sale contract making the sale contingent on zoning. We aren't hiding the truth--we just aren't taking on YOUR issue. PS my zoning won't change when we sell, "I think."
.

at least in the UK the equivalent of Zoning which is planning permission stays with the property ie we have our basement Zoned as a Café from a previous owner, we won't change it in case we ever want to do that will just sit as it is. Also in my town we are very keen to have bedrooms so there is a $20,000 fee to change from bedrooms to house.

 

[undersea]

Zoning in writing. Just because it is currently operating does not mean it will be legal once sold. My City got zoning AFTER I opened. Existing businesses were "grandfathered". Some may require a variance to continue if passing to a different owner. MY B & B is OK because I am in a mixed use (both residential and commercial). AND since I am on the Zoning Commission, ensured a B & B can be located in ANY district in my City., The Mayor sheepishly said in a Develop,emt Authority meeting (yes, I am on that too) that we need more B & Bs in our City. He was surprised when I said (almost shouted) YES, PLEASE!!!
The suggestion about the "lay of the land" is also excellent. Get the town newspaper - read back issues to see what is happening in the town. Are there empty storefronts? Does the town look like a place people would come to and enjoy enough to return? THIS should be your responsibility to check out.
I also agree with the previous comments about financials - YOURS and theirs. It is not fair to them to go through the answering your questions about THEIR financials if yours are not in order. Questions to ask would depend on the size of the B & B, the laws of the City/County/State regarding its operation (meals permitted, facilities required (remember grandfather), is innkeeper required on-site (will you be living on-site), are there any "grandfather" clauses that die with the sale that will cause more $$$$. Utility costs - what are they.
Good luck to both you and the seller..

Owners cannot--and should not-- speak to zoning for a number of reasons, the first of which is it is NOT on them as the person leaving. Second, they have no standing and cannot change what is "reality." (3) they might not even know the truth or understand the laws (we are more skilled than most and WE won't speak to it for you). [See below]
Instead, it is up to the buyer to go to town hall or county zoning dept. and find out the truth from the horse's mouth.
Note: [We went to town hall and ASKED before buying our inn.] My husband was a real estate attorney. I was a reporter covering zoning and such, dealing with the building dept. weekly. We would NEVER sign a sale contract making the sale contingent on zoning. We aren't hiding the truth--we just aren't taking on YOUR issue. PS my zoning won't change when we sell, "I think."
.

at least in the UK the equivalent of Zoning which is planning permission stays with the property ie we have our basement Zoned as a Café from a previous owner, we won't change it in case we ever want to do that will just sit as it is. Also in my town we are very keen to have bedrooms so there is a $20,000 fee to change from bedrooms to house.
.

there is a $20,000 fee to change from bedrooms to house.

That seems like a major rip-off

 

[Garden_Pix_Inn]

Welcome Lisa. Here's an interesting question to ask yourself before you go forward - is it the cooking that you love or having guests stay in your home and being on for most of the entire day that you'll love? I just had a guest stay with us this week who owned both a restaurant and then a small inn. I asked her which she preferred and without hesitation she said the restaurant because "at the end of the dinner service, I could lock the door, finish up and go back to my home until the next day." I think this is way more important that the operations of the inn and one most of us probably didn't investigate long enough before moving forward. I would certainly want to know the following:
1. income after expenses and debt service (will you have money to live on and take your own vacation or will it all be in the business)
2. how many hours do the innkeepers work a day on average
3. how much outside help do they have an does their help turn over every year -- very difficult finding good housekeeping help
4. Is the business very seasonal? If so, you'll want to be sure to take deposits on reservations so that you have cash flow over the year to survive
5. as others have said, zoning -- be sure that they've got everything done right or you could find yourself with costly upgrades like sprinklers, etc. if they have recently become mandated; also find out what is going on in the Town. Is it growing or dwindling? Any projects like landfills, groups against the Town growing, etc. that could lessen your business in the coming year. We had originally been going to build in one town and when I bought their local newspapers found out an inn's construction had been halted by a group trying to stop any development in their town. Cost the innkeeper tons of money. It's good to know if a town takes favorably to their businesses. Also, see what the planning board has recently approved - if any other hotels or inns are coming in which could take some of your occupancy away. We built at the same time that a local inn was selling and we have better occupancy than they do now and they have put all of their rooms on the OTAs.
6. if you want to do dinner, what is required for you to do so? You'll probably need a full commercial kitchen (along with fire suppression) so will it be worth it with the expense? Are you going to do breakfast and dinner? That's a really long day and why I haven't opened our restaurant yet even though I have the space and a commercial kitchen ready. I don't want to work 16 hour days. If you're going to hire help to do either breakfast or dinner, be sure the cost of the chef will leave you with a reasonable ROI.
7. what will you do about healthcare? I pay over $800 a month for a plan that only gives our family of 4 one physical a year and my mammogram - basically the only thing affordable to small business owners is what I refer to as a "god forbid policy" - it's in case we get seriously injured or sick and then we also have to cover the high deductible. A lot different than when I worked in the corporate world and one of the biggest expenses innkeepers have to figure out if they aren't working outside of the inn
8. after you've answered all of the above, is the scenario at the inn you're considering going to provide you with the life you want?
Good luck..

#2 - reminded me of a pizzeria many years ago we looked into buying. Working owners said it make $X net profit. I asked, do you pay under the table? Seemed the labor $$$ wasn't right for the financials. Also, I asked, how many hours do you work here weekly? He said "100" I asked, "and your wife?" "100". Basically, if all the numbers were correct, they each made about $7 an hour, not counting the payments we would have had to make to buy the business. And of course, self employment tax, the risk, etc,
Net profit is AFTER reasonable owner's salaries. That is why biz buy sell . com type sites call it "owner benefit" or hint at tax savings. In other words, the business might be unprofitable and they are trying to spin it.
There is a reason they are selling. It is rarely because they are full and happy with so much money they just want to move on with their lives. Watch restaurant or hotel impossible, etc. The frustration, anger, hostility, heavy debt of the owners will be YOU, if you are not careful!!!
.

This is a very good reminder that the failure to account for ALL of the work is the number one reason why innkeepers are unbalanced, burned out, and unhappy. Over and over again this scenario plays out in the bnb industry.
Undersea, I am increasing sure that won't be you. I like that you are putting your past business experience into play to ensure that whatever you end up doing will have a solid foundation going in.
.

I bought someone else's roofing company many years ago and got badly burned. It LOOKED really good and I did a lot of due diligence. Spent a fortune on lawyers to qualify for a loan. Would not believe all the judgments and unpaid taxes the man had. He cheated his church, his brothers and many others. Lying, conniving person.
Ran it for 3 years and learned more than I ever imagined. Now I could tell people what to look for.
I have quietly observed a LOT of the commentaries from some active innkeepers here. I saw myself, when I finally got out from under that mess. The mail, the phone calls for money (which I did not have).
I think some forget this is a business. When an innkeeper takes a bad review or comment personally, that goes with the territory. If I pay an innkeeper $125 for one night, and they are miffed I don't praise their breakfast, or have a dietary issue and they are unhappy about the inconvenience or a host of other complaints I see here... In what other business model do these attitudes fly? We can rant here, but some are living in a world that no longer exists. There is a lot of competition out there. We have to step up our game.
.

Well, that is a big topic when you talk about the changes and what is required to be a part of the positive change that is going on in our industry. One thing to consider is that there is going to be less competition for certain markets that are emerging and building brands that bring your perfect guest from those markets to you is important. I have been thinking of starting a thread about it.
.

I posted a week or so ago a book that I think nails it. Becoming an expert in something, especially if it is something special in your area.
I don't think it was really grasped. It is a French Bed & Breakfast owner, Yvonne Halling. I didn't go or her course, but her book is a wises read: Bed and Breakfast Magic: How to Transform Your Bed and Breakfast Into A Booming 6 Figure Business.
It is not about having bicycles available, or catering to hikers or bikers or fishermen or skiers or having equipment available.
It is about finding a niche (you enjoy) and becoming an EXPERT in it.
As she describes herself: "I'm currently in the heart of the Champagne region of France, and I welcome people from all over the world, helping them to discover the hidden gems of Champagne."
People come internationally - champagne aficianados - to her B&B, and she connects them with small champagne growers, in the very heart of champagne country.
Essentially, she is not competing with others, asshe is it and people seek her out.
THIS I think is the future. Ask any serious business coach, and they will tell you the value of education, expertise in something that you pass on to others - appealing to hobbyists.
So maybe you are an expert in model rocket, astronomy, the bayous, ghost hunting, antique weapons, the hiddens of a tourist city, coins, mineralogy.
You then set yourself up as the expert, and people at your B&B (themed, classes, displays, whatever) get the deep value of your wisdom, knowledge and connections to excite enthusiasts.
Her theory is, you an charge what you what, since you essentially have no competition.
.

You then set yourself up as the expert, and people at your B&B (themed, classes, displays, whatever) get the deep value of your wisdom, knowledge and connections to excite enthusiasts.

I think is not so much "the theme B&B" as it is the "experience at a B&B." That experience draws from YOUR expertise and interests.
More an more we are competing with the likes of AirBNB which is always about "the people/the hosts."
And for years now, innkeepers have been REMOVING their profiles from their pages. Wrong move, folks!!! We should not be the center of the universe at the inn but as owners we are part of the experiential package.
All that being said, my husband and I are RENOVATORS first. So people come to "see the house" and "talk about houses, theirs and ours, techniques, etc."
However, we are also project oriented so, now that the "project" is mostly complete, we want to go do some other building (probably NOT another B&B--done 2; that's enough!)
I am finding my "biggest issue" in selling is that the personality of US looms too big. People with less business experience (aka most aspiring innkeepers) don't really know that they have to take the physical property and make it psychologically their own. Just because I do weddings, decorate parties, take great photos doesn't mean they have to! MY business plan/process is not THEIRS. I can hand them a beautifully renovated, functioning building and they need to run with it. I can teach how WE do it but they will have to find out how THEY want to make their money. Following your passion to do so is always the best.
Our bottom line is that once the "fixing" is over, we no longer have passion for the rest of it. Time to sell. I'll be stepping out of the "showing game" (letting hubby OR a personable friend take care of it). When you sell a house they say "neutralize" the wall and floor color and take down the personal photos. For an inn, perhaps one needs to "take down" the personality which pervades the place, making it a blank slate for the new owners. PS I have a banquet room and there are many many things someone could do with that which is NOT weddings. Take your pick. Just don't ask ME to host a quilting bee or a couples retreat with personal interaction. I'd rather teach you how to sheetrock the ceiling, LOL!!
By the way, MY inn is at the base of a new state park with ATVing, shooting and such. It's going to be great! I'm not going to be the one out there riding/shooting, however!!!
PS I'm a girl.

 

[Joey Camb]

Zoning in writing. Just because it is currently operating does not mean it will be legal once sold. My City got zoning AFTER I opened. Existing businesses were "grandfathered". Some may require a variance to continue if passing to a different owner. MY B & B is OK because I am in a mixed use (both residential and commercial). AND since I am on the Zoning Commission, ensured a B & B can be located in ANY district in my City., The Mayor sheepishly said in a Develop,emt Authority meeting (yes, I am on that too) that we need more B & Bs in our City. He was surprised when I said (almost shouted) YES, PLEASE!!!
The suggestion about the "lay of the land" is also excellent. Get the town newspaper - read back issues to see what is happening in the town. Are there empty storefronts? Does the town look like a place people would come to and enjoy enough to return? THIS should be your responsibility to check out.
I also agree with the previous comments about financials - YOURS and theirs. It is not fair to them to go through the answering your questions about THEIR financials if yours are not in order. Questions to ask would depend on the size of the B & B, the laws of the City/County/State regarding its operation (meals permitted, facilities required (remember grandfather), is innkeeper required on-site (will you be living on-site), are there any "grandfather" clauses that die with the sale that will cause more $$$$. Utility costs - what are they.
Good luck to both you and the seller..

Owners cannot--and should not-- speak to zoning for a number of reasons, the first of which is it is NOT on them as the person leaving. Second, they have no standing and cannot change what is "reality." (3) they might not even know the truth or understand the laws (we are more skilled than most and WE won't speak to it for you). [See below]
Instead, it is up to the buyer to go to town hall or county zoning dept. and find out the truth from the horse's mouth.
Note: [We went to town hall and ASKED before buying our inn.] My husband was a real estate attorney. I was a reporter covering zoning and such, dealing with the building dept. weekly. We would NEVER sign a sale contract making the sale contingent on zoning. We aren't hiding the truth--we just aren't taking on YOUR issue. PS my zoning won't change when we sell, "I think."
.

at least in the UK the equivalent of Zoning which is planning permission stays with the property ie we have our basement Zoned as a Café from a previous owner, we won't change it in case we ever want to do that will just sit as it is. Also in my town we are very keen to have bedrooms so there is a $20,000 fee to change from bedrooms to house.
.

there is a $20,000 fee to change from bedrooms to house.

That seems like a major rip-off
.

its to stop people buying B&B's and turning them into houses - you would have to be super keen to have it as a house to do so.

 

[EmptyNest]

Welcome Lisa. Here's an interesting question to ask yourself before you go forward - is it the cooking that you love or having guests stay in your home and being on for most of the entire day that you'll love? I just had a guest stay with us this week who owned both a restaurant and then a small inn. I asked her which she preferred and without hesitation she said the restaurant because "at the end of the dinner service, I could lock the door, finish up and go back to my home until the next day." I think this is way more important that the operations of the inn and one most of us probably didn't investigate long enough before moving forward. I would certainly want to know the following:
1. income after expenses and debt service (will you have money to live on and take your own vacation or will it all be in the business)
2. how many hours do the innkeepers work a day on average
3. how much outside help do they have an does their help turn over every year -- very difficult finding good housekeeping help
4. Is the business very seasonal? If so, you'll want to be sure to take deposits on reservations so that you have cash flow over the year to survive
5. as others have said, zoning -- be sure that they've got everything done right or you could find yourself with costly upgrades like sprinklers, etc. if they have recently become mandated; also find out what is going on in the Town. Is it growing or dwindling? Any projects like landfills, groups against the Town growing, etc. that could lessen your business in the coming year. We had originally been going to build in one town and when I bought their local newspapers found out an inn's construction had been halted by a group trying to stop any development in their town. Cost the innkeeper tons of money. It's good to know if a town takes favorably to their businesses. Also, see what the planning board has recently approved - if any other hotels or inns are coming in which could take some of your occupancy away. We built at the same time that a local inn was selling and we have better occupancy than they do now and they have put all of their rooms on the OTAs.
6. if you want to do dinner, what is required for you to do so? You'll probably need a full commercial kitchen (along with fire suppression) so will it be worth it with the expense? Are you going to do breakfast and dinner? That's a really long day and why I haven't opened our restaurant yet even though I have the space and a commercial kitchen ready. I don't want to work 16 hour days. If you're going to hire help to do either breakfast or dinner, be sure the cost of the chef will leave you with a reasonable ROI.
7. what will you do about healthcare? I pay over $800 a month for a plan that only gives our family of 4 one physical a year and my mammogram - basically the only thing affordable to small business owners is what I refer to as a "god forbid policy" - it's in case we get seriously injured or sick and then we also have to cover the high deductible. A lot different than when I worked in the corporate world and one of the biggest expenses innkeepers have to figure out if they aren't working outside of the inn
8. after you've answered all of the above, is the scenario at the inn you're considering going to provide you with the life you want?
Good luck..

#2 - reminded me of a pizzeria many years ago we looked into buying. Working owners said it make $X net profit. I asked, do you pay under the table? Seemed the labor $$$ wasn't right for the financials. Also, I asked, how many hours do you work here weekly? He said "100" I asked, "and your wife?" "100". Basically, if all the numbers were correct, they each made about $7 an hour, not counting the payments we would have had to make to buy the business. And of course, self employment tax, the risk, etc,
Net profit is AFTER reasonable owner's salaries. That is why biz buy sell . com type sites call it "owner benefit" or hint at tax savings. In other words, the business might be unprofitable and they are trying to spin it.
There is a reason they are selling. It is rarely because they are full and happy with so much money they just want to move on with their lives. Watch restaurant or hotel impossible, etc. The frustration, anger, hostility, heavy debt of the owners will be YOU, if you are not careful!!!
.

This is a very good reminder that the failure to account for ALL of the work is the number one reason why innkeepers are unbalanced, burned out, and unhappy. Over and over again this scenario plays out in the bnb industry.
Undersea, I am increasing sure that won't be you. I like that you are putting your past business experience into play to ensure that whatever you end up doing will have a solid foundation going in.
.

I bought someone else's roofing company many years ago and got badly burned. It LOOKED really good and I did a lot of due diligence. Spent a fortune on lawyers to qualify for a loan. Would not believe all the judgments and unpaid taxes the man had. He cheated his church, his brothers and many others. Lying, conniving person.
Ran it for 3 years and learned more than I ever imagined. Now I could tell people what to look for.
I have quietly observed a LOT of the commentaries from some active innkeepers here. I saw myself, when I finally got out from under that mess. The mail, the phone calls for money (which I did not have).
I think some forget this is a business. When an innkeeper takes a bad review or comment personally, that goes with the territory. If I pay an innkeeper $125 for one night, and they are miffed I don't praise their breakfast, or have a dietary issue and they are unhappy about the inconvenience or a host of other complaints I see here... In what other business model do these attitudes fly? We can rant here, but some are living in a world that no longer exists. There is a lot of competition out there. We have to step up our game.
.

Well, that is a big topic when you talk about the changes and what is required to be a part of the positive change that is going on in our industry. One thing to consider is that there is going to be less competition for certain markets that are emerging and building brands that bring your perfect guest from those markets to you is important. I have been thinking of starting a thread about it.
.

I posted a week or so ago a book that I think nails it. Becoming an expert in something, especially if it is something special in your area.
I don't think it was really grasped. It is a French Bed & Breakfast owner, Yvonne Halling. I didn't go or her course, but her book is a wises read: Bed and Breakfast Magic: How to Transform Your Bed and Breakfast Into A Booming 6 Figure Business.
It is not about having bicycles available, or catering to hikers or bikers or fishermen or skiers or having equipment available.
It is about finding a niche (you enjoy) and becoming an EXPERT in it.
As she describes herself: "I'm currently in the heart of the Champagne region of France, and I welcome people from all over the world, helping them to discover the hidden gems of Champagne."
People come internationally - champagne aficianados - to her B&B, and she connects them with small champagne growers, in the very heart of champagne country.
Essentially, she is not competing with others, asshe is it and people seek her out.
THIS I think is the future. Ask any serious business coach, and they will tell you the value of education, expertise in something that you pass on to others - appealing to hobbyists.
So maybe you are an expert in model rocket, astronomy, the bayous, ghost hunting, antique weapons, the hiddens of a tourist city, coins, mineralogy.
You then set yourself up as the expert, and people at your B&B (themed, classes, displays, whatever) get the deep value of your wisdom, knowledge and connections to excite enthusiasts.
Her theory is, you an charge what you what, since you essentially have no competition.
.

You then set yourself up as the expert, and people at your B&B (themed, classes, displays, whatever) get the deep value of your wisdom, knowledge and connections to excite enthusiasts.

I think is not so much "the theme B&B" as it is the "experience at a B&B." That experience draws from YOUR expertise and interests.
More an more we are competing with the likes of AirBNB which is always about "the people/the hosts."
And for years now, innkeepers have been REMOVING their profiles from their pages. Wrong move, folks!!! We should not be the center of the universe at the inn but as owners we are part of the experiential package.
All that being said, my husband and I are RENOVATORS first. So people come to "see the house" and "talk about houses, theirs and ours, techniques, etc."
However, we are also project oriented so, now that the "project" is mostly complete, we want to go do some other building (probably NOT another B&B--done 2; that's enough!)
I am finding my "biggest issue" in selling is that the personality of US looms too big. People with less business experience (aka most aspiring innkeepers) don't really know that they have to take the physical property and make it psychologically their own. Just because I do weddings, decorate parties, take great photos doesn't mean they have to! MY business plan/process is not THEIRS. I can hand them a beautifully renovated, functioning building and they need to run with it. I can teach how WE do it but they will have to find out how THEY want to make their money. Following your passion to do so is always the best.
Our bottom line is that once the "fixing" is over, we no longer have passion for the rest of it. Time to sell. I'll be stepping out of the "showing game" (letting hubby OR a personable friend take care of it). When you sell a house they say "neutralize" the wall and floor color and take down the personal photos. For an inn, perhaps one needs to "take down" the personality which pervades the place, making it a blank slate for the new owners. PS I have a banquet room and there are many many things someone could do with that which is NOT weddings. Take your pick. Just don't ask ME to host a quilting bee or a couples retreat with personal interaction. I'd rather teach you how to sheetrock the ceiling, LOL!!
By the way, MY inn is at the base of a new state park with ATVing, shooting and such. It's going to be great! I'm not going to be the one out there riding/shooting, however!!!
PS I'm a girl.
.

Do you know my friend at Miss Match Rentals in Boone?

 

[undersea]

Zoning in writing. Just because it is currently operating does not mean it will be legal once sold. My City got zoning AFTER I opened. Existing businesses were "grandfathered". Some may require a variance to continue if passing to a different owner. MY B & B is OK because I am in a mixed use (both residential and commercial). AND since I am on the Zoning Commission, ensured a B & B can be located in ANY district in my City., The Mayor sheepishly said in a Develop,emt Authority meeting (yes, I am on that too) that we need more B & Bs in our City. He was surprised when I said (almost shouted) YES, PLEASE!!!
The suggestion about the "lay of the land" is also excellent. Get the town newspaper - read back issues to see what is happening in the town. Are there empty storefronts? Does the town look like a place people would come to and enjoy enough to return? THIS should be your responsibility to check out.
I also agree with the previous comments about financials - YOURS and theirs. It is not fair to them to go through the answering your questions about THEIR financials if yours are not in order. Questions to ask would depend on the size of the B & B, the laws of the City/County/State regarding its operation (meals permitted, facilities required (remember grandfather), is innkeeper required on-site (will you be living on-site), are there any "grandfather" clauses that die with the sale that will cause more $$$$. Utility costs - what are they.
Good luck to both you and the seller..

Owners cannot--and should not-- speak to zoning for a number of reasons, the first of which is it is NOT on them as the person leaving. Second, they have no standing and cannot change what is "reality." (3) they might not even know the truth or understand the laws (we are more skilled than most and WE won't speak to it for you). [See below]
Instead, it is up to the buyer to go to town hall or county zoning dept. and find out the truth from the horse's mouth.
Note: [We went to town hall and ASKED before buying our inn.] My husband was a real estate attorney. I was a reporter covering zoning and such, dealing with the building dept. weekly. We would NEVER sign a sale contract making the sale contingent on zoning. We aren't hiding the truth--we just aren't taking on YOUR issue. PS my zoning won't change when we sell, "I think."
.

at least in the UK the equivalent of Zoning which is planning permission stays with the property ie we have our basement Zoned as a Café from a previous owner, we won't change it in case we ever want to do that will just sit as it is. Also in my town we are very keen to have bedrooms so there is a $20,000 fee to change from bedrooms to house.
.

there is a $20,000 fee to change from bedrooms to house.

That seems like a major rip-off
.

its to stop people buying B&B's and turning them into houses - you would have to be super keen to have it as a house to do so.
.

Cannot imagine wanting to do that. It is usually the reverse

 

[TheBeachHouse]

Zoning in writing. Just because it is currently operating does not mean it will be legal once sold. My City got zoning AFTER I opened. Existing businesses were "grandfathered". Some may require a variance to continue if passing to a different owner. MY B & B is OK because I am in a mixed use (both residential and commercial). AND since I am on the Zoning Commission, ensured a B & B can be located in ANY district in my City., The Mayor sheepishly said in a Develop,emt Authority meeting (yes, I am on that too) that we need more B & Bs in our City. He was surprised when I said (almost shouted) YES, PLEASE!!!
The suggestion about the "lay of the land" is also excellent. Get the town newspaper - read back issues to see what is happening in the town. Are there empty storefronts? Does the town look like a place people would come to and enjoy enough to return? THIS should be your responsibility to check out.
I also agree with the previous comments about financials - YOURS and theirs. It is not fair to them to go through the answering your questions about THEIR financials if yours are not in order. Questions to ask would depend on the size of the B & B, the laws of the City/County/State regarding its operation (meals permitted, facilities required (remember grandfather), is innkeeper required on-site (will you be living on-site), are there any "grandfather" clauses that die with the sale that will cause more $$$$. Utility costs - what are they.
Good luck to both you and the seller..

Owners cannot--and should not-- speak to zoning for a number of reasons, the first of which is it is NOT on them as the person leaving. Second, they have no standing and cannot change what is "reality." (3) they might not even know the truth or understand the laws (we are more skilled than most and WE won't speak to it for you). [See below]
Instead, it is up to the buyer to go to town hall or county zoning dept. and find out the truth from the horse's mouth.
Note: [We went to town hall and ASKED before buying our inn.] My husband was a real estate attorney. I was a reporter covering zoning and such, dealing with the building dept. weekly. We would NEVER sign a sale contract making the sale contingent on zoning. We aren't hiding the truth--we just aren't taking on YOUR issue. PS my zoning won't change when we sell, "I think."
.

at least in the UK the equivalent of Zoning which is planning permission stays with the property ie we have our basement Zoned as a Café from a previous owner, we won't change it in case we ever want to do that will just sit as it is. Also in my town we are very keen to have bedrooms so there is a $20,000 fee to change from bedrooms to house.
.

there is a $20,000 fee to change from bedrooms to house.

That seems like a major rip-off
.

its to stop people buying B&B's and turning them into houses - you would have to be super keen to have it as a house to do so.
.

Cannot imagine wanting to do that. It is usually the reverse
.

Cannot imagine wanting to do that. It is usually the reverse

It is the trend here. Wealthy families buying the inns and turning them into awesome summer homes.
I don't like it. Yes, we are getting more business, but the whole personality of the town will change if the B&Bs go away.

 

[Garden_Pix_Inn]

Welcome Lisa. Here's an interesting question to ask yourself before you go forward - is it the cooking that you love or having guests stay in your home and being on for most of the entire day that you'll love? I just had a guest stay with us this week who owned both a restaurant and then a small inn. I asked her which she preferred and without hesitation she said the restaurant because "at the end of the dinner service, I could lock the door, finish up and go back to my home until the next day." I think this is way more important that the operations of the inn and one most of us probably didn't investigate long enough before moving forward. I would certainly want to know the following:
1. income after expenses and debt service (will you have money to live on and take your own vacation or will it all be in the business)
2. how many hours do the innkeepers work a day on average
3. how much outside help do they have an does their help turn over every year -- very difficult finding good housekeeping help
4. Is the business very seasonal? If so, you'll want to be sure to take deposits on reservations so that you have cash flow over the year to survive
5. as others have said, zoning -- be sure that they've got everything done right or you could find yourself with costly upgrades like sprinklers, etc. if they have recently become mandated; also find out what is going on in the Town. Is it growing or dwindling? Any projects like landfills, groups against the Town growing, etc. that could lessen your business in the coming year. We had originally been going to build in one town and when I bought their local newspapers found out an inn's construction had been halted by a group trying to stop any development in their town. Cost the innkeeper tons of money. It's good to know if a town takes favorably to their businesses. Also, see what the planning board has recently approved - if any other hotels or inns are coming in which could take some of your occupancy away. We built at the same time that a local inn was selling and we have better occupancy than they do now and they have put all of their rooms on the OTAs.
6. if you want to do dinner, what is required for you to do so? You'll probably need a full commercial kitchen (along with fire suppression) so will it be worth it with the expense? Are you going to do breakfast and dinner? That's a really long day and why I haven't opened our restaurant yet even though I have the space and a commercial kitchen ready. I don't want to work 16 hour days. If you're going to hire help to do either breakfast or dinner, be sure the cost of the chef will leave you with a reasonable ROI.
7. what will you do about healthcare? I pay over $800 a month for a plan that only gives our family of 4 one physical a year and my mammogram - basically the only thing affordable to small business owners is what I refer to as a "god forbid policy" - it's in case we get seriously injured or sick and then we also have to cover the high deductible. A lot different than when I worked in the corporate world and one of the biggest expenses innkeepers have to figure out if they aren't working outside of the inn
8. after you've answered all of the above, is the scenario at the inn you're considering going to provide you with the life you want?
Good luck..

#2 - reminded me of a pizzeria many years ago we looked into buying. Working owners said it make $X net profit. I asked, do you pay under the table? Seemed the labor $$$ wasn't right for the financials. Also, I asked, how many hours do you work here weekly? He said "100" I asked, "and your wife?" "100". Basically, if all the numbers were correct, they each made about $7 an hour, not counting the payments we would have had to make to buy the business. And of course, self employment tax, the risk, etc,
Net profit is AFTER reasonable owner's salaries. That is why biz buy sell . com type sites call it "owner benefit" or hint at tax savings. In other words, the business might be unprofitable and they are trying to spin it.
There is a reason they are selling. It is rarely because they are full and happy with so much money they just want to move on with their lives. Watch restaurant or hotel impossible, etc. The frustration, anger, hostility, heavy debt of the owners will be YOU, if you are not careful!!!
.

This is a very good reminder that the failure to account for ALL of the work is the number one reason why innkeepers are unbalanced, burned out, and unhappy. Over and over again this scenario plays out in the bnb industry.
Undersea, I am increasing sure that won't be you. I like that you are putting your past business experience into play to ensure that whatever you end up doing will have a solid foundation going in.
.

I bought someone else's roofing company many years ago and got badly burned. It LOOKED really good and I did a lot of due diligence. Spent a fortune on lawyers to qualify for a loan. Would not believe all the judgments and unpaid taxes the man had. He cheated his church, his brothers and many others. Lying, conniving person.
Ran it for 3 years and learned more than I ever imagined. Now I could tell people what to look for.
I have quietly observed a LOT of the commentaries from some active innkeepers here. I saw myself, when I finally got out from under that mess. The mail, the phone calls for money (which I did not have).
I think some forget this is a business. When an innkeeper takes a bad review or comment personally, that goes with the territory. If I pay an innkeeper $125 for one night, and they are miffed I don't praise their breakfast, or have a dietary issue and they are unhappy about the inconvenience or a host of other complaints I see here... In what other business model do these attitudes fly? We can rant here, but some are living in a world that no longer exists. There is a lot of competition out there. We have to step up our game.
.

Well, that is a big topic when you talk about the changes and what is required to be a part of the positive change that is going on in our industry. One thing to consider is that there is going to be less competition for certain markets that are emerging and building brands that bring your perfect guest from those markets to you is important. I have been thinking of starting a thread about it.
.

I posted a week or so ago a book that I think nails it. Becoming an expert in something, especially if it is something special in your area.
I don't think it was really grasped. It is a French Bed & Breakfast owner, Yvonne Halling. I didn't go or her course, but her book is a wises read: Bed and Breakfast Magic: How to Transform Your Bed and Breakfast Into A Booming 6 Figure Business.
It is not about having bicycles available, or catering to hikers or bikers or fishermen or skiers or having equipment available.
It is about finding a niche (you enjoy) and becoming an EXPERT in it.
As she describes herself: "I'm currently in the heart of the Champagne region of France, and I welcome people from all over the world, helping them to discover the hidden gems of Champagne."
People come internationally - champagne aficianados - to her B&B, and she connects them with small champagne growers, in the very heart of champagne country.
Essentially, she is not competing with others, asshe is it and people seek her out.
THIS I think is the future. Ask any serious business coach, and they will tell you the value of education, expertise in something that you pass on to others - appealing to hobbyists.
So maybe you are an expert in model rocket, astronomy, the bayous, ghost hunting, antique weapons, the hiddens of a tourist city, coins, mineralogy.
You then set yourself up as the expert, and people at your B&B (themed, classes, displays, whatever) get the deep value of your wisdom, knowledge and connections to excite enthusiasts.
Her theory is, you an charge what you what, since you essentially have no competition.
.

You then set yourself up as the expert, and people at your B&B (themed, classes, displays, whatever) get the deep value of your wisdom, knowledge and connections to excite enthusiasts.

I think is not so much "the theme B&B" as it is the "experience at a B&B." That experience draws from YOUR expertise and interests.
More an more we are competing with the likes of AirBNB which is always about "the people/the hosts."
And for years now, innkeepers have been REMOVING their profiles from their pages. Wrong move, folks!!! We should not be the center of the universe at the inn but as owners we are part of the experiential package.
All that being said, my husband and I are RENOVATORS first. So people come to "see the house" and "talk about houses, theirs and ours, techniques, etc."
However, we are also project oriented so, now that the "project" is mostly complete, we want to go do some other building (probably NOT another B&B--done 2; that's enough!)
I am finding my "biggest issue" in selling is that the personality of US looms too big. People with less business experience (aka most aspiring innkeepers) don't really know that they have to take the physical property and make it psychologically their own. Just because I do weddings, decorate parties, take great photos doesn't mean they have to! MY business plan/process is not THEIRS. I can hand them a beautifully renovated, functioning building and they need to run with it. I can teach how WE do it but they will have to find out how THEY want to make their money. Following your passion to do so is always the best.
Our bottom line is that once the "fixing" is over, we no longer have passion for the rest of it. Time to sell. I'll be stepping out of the "showing game" (letting hubby OR a personable friend take care of it). When you sell a house they say "neutralize" the wall and floor color and take down the personal photos. For an inn, perhaps one needs to "take down" the personality which pervades the place, making it a blank slate for the new owners. PS I have a banquet room and there are many many things someone could do with that which is NOT weddings. Take your pick. Just don't ask ME to host a quilting bee or a couples retreat with personal interaction. I'd rather teach you how to sheetrock the ceiling, LOL!!
By the way, MY inn is at the base of a new state park with ATVing, shooting and such. It's going to be great! I'm not going to be the one out there riding/shooting, however!!!
PS I'm a girl.
.

Do you know my friend at Miss Match Rentals in Boone?
.

We've met through the wedding planners group. But I've not used her at my wedding venue because I have my own (white) china. Genius idea, however!

 

[Garden_Pix_Inn]

Welcome Lisa. Here's an interesting question to ask yourself before you go forward - is it the cooking that you love or having guests stay in your home and being on for most of the entire day that you'll love? I just had a guest stay with us this week who owned both a restaurant and then a small inn. I asked her which she preferred and without hesitation she said the restaurant because "at the end of the dinner service, I could lock the door, finish up and go back to my home until the next day." I think this is way more important that the operations of the inn and one most of us probably didn't investigate long enough before moving forward. I would certainly want to know the following:
1. income after expenses and debt service (will you have money to live on and take your own vacation or will it all be in the business)
2. how many hours do the innkeepers work a day on average
3. how much outside help do they have an does their help turn over every year -- very difficult finding good housekeeping help
4. Is the business very seasonal? If so, you'll want to be sure to take deposits on reservations so that you have cash flow over the year to survive
5. as others have said, zoning -- be sure that they've got everything done right or you could find yourself with costly upgrades like sprinklers, etc. if they have recently become mandated; also find out what is going on in the Town. Is it growing or dwindling? Any projects like landfills, groups against the Town growing, etc. that could lessen your business in the coming year. We had originally been going to build in one town and when I bought their local newspapers found out an inn's construction had been halted by a group trying to stop any development in their town. Cost the innkeeper tons of money. It's good to know if a town takes favorably to their businesses. Also, see what the planning board has recently approved - if any other hotels or inns are coming in which could take some of your occupancy away. We built at the same time that a local inn was selling and we have better occupancy than they do now and they have put all of their rooms on the OTAs.
6. if you want to do dinner, what is required for you to do so? You'll probably need a full commercial kitchen (along with fire suppression) so will it be worth it with the expense? Are you going to do breakfast and dinner? That's a really long day and why I haven't opened our restaurant yet even though I have the space and a commercial kitchen ready. I don't want to work 16 hour days. If you're going to hire help to do either breakfast or dinner, be sure the cost of the chef will leave you with a reasonable ROI.
7. what will you do about healthcare? I pay over $800 a month for a plan that only gives our family of 4 one physical a year and my mammogram - basically the only thing affordable to small business owners is what I refer to as a "god forbid policy" - it's in case we get seriously injured or sick and then we also have to cover the high deductible. A lot different than when I worked in the corporate world and one of the biggest expenses innkeepers have to figure out if they aren't working outside of the inn
8. after you've answered all of the above, is the scenario at the inn you're considering going to provide you with the life you want?
Good luck..

#2 - reminded me of a pizzeria many years ago we looked into buying. Working owners said it make $X net profit. I asked, do you pay under the table? Seemed the labor $$$ wasn't right for the financials. Also, I asked, how many hours do you work here weekly? He said "100" I asked, "and your wife?" "100". Basically, if all the numbers were correct, they each made about $7 an hour, not counting the payments we would have had to make to buy the business. And of course, self employment tax, the risk, etc,
Net profit is AFTER reasonable owner's salaries. That is why biz buy sell . com type sites call it "owner benefit" or hint at tax savings. In other words, the business might be unprofitable and they are trying to spin it.
There is a reason they are selling. It is rarely because they are full and happy with so much money they just want to move on with their lives. Watch restaurant or hotel impossible, etc. The frustration, anger, hostility, heavy debt of the owners will be YOU, if you are not careful!!!
.

This is a very good reminder that the failure to account for ALL of the work is the number one reason why innkeepers are unbalanced, burned out, and unhappy. Over and over again this scenario plays out in the bnb industry.
Undersea, I am increasing sure that won't be you. I like that you are putting your past business experience into play to ensure that whatever you end up doing will have a solid foundation going in.
.

I bought someone else's roofing company many years ago and got badly burned. It LOOKED really good and I did a lot of due diligence. Spent a fortune on lawyers to qualify for a loan. Would not believe all the judgments and unpaid taxes the man had. He cheated his church, his brothers and many others. Lying, conniving person.
Ran it for 3 years and learned more than I ever imagined. Now I could tell people what to look for.
I have quietly observed a LOT of the commentaries from some active innkeepers here. I saw myself, when I finally got out from under that mess. The mail, the phone calls for money (which I did not have).
I think some forget this is a business. When an innkeeper takes a bad review or comment personally, that goes with the territory. If I pay an innkeeper $125 for one night, and they are miffed I don't praise their breakfast, or have a dietary issue and they are unhappy about the inconvenience or a host of other complaints I see here... In what other business model do these attitudes fly? We can rant here, but some are living in a world that no longer exists. There is a lot of competition out there. We have to step up our game.
.

Well, that is a big topic when you talk about the changes and what is required to be a part of the positive change that is going on in our industry. One thing to consider is that there is going to be less competition for certain markets that are emerging and building brands that bring your perfect guest from those markets to you is important. I have been thinking of starting a thread about it.
.

I posted a week or so ago a book that I think nails it. Becoming an expert in something, especially if it is something special in your area.
I don't think it was really grasped. It is a French Bed & Breakfast owner, Yvonne Halling. I didn't go or her course, but her book is a wises read: Bed and Breakfast Magic: How to Transform Your Bed and Breakfast Into A Booming 6 Figure Business.
It is not about having bicycles available, or catering to hikers or bikers or fishermen or skiers or having equipment available.
It is about finding a niche (you enjoy) and becoming an EXPERT in it.
As she describes herself: "I'm currently in the heart of the Champagne region of France, and I welcome people from all over the world, helping them to discover the hidden gems of Champagne."
People come internationally - champagne aficianados - to her B&B, and she connects them with small champagne growers, in the very heart of champagne country.
Essentially, she is not competing with others, asshe is it and people seek her out.
THIS I think is the future. Ask any serious business coach, and they will tell you the value of education, expertise in something that you pass on to others - appealing to hobbyists.
So maybe you are an expert in model rocket, astronomy, the bayous, ghost hunting, antique weapons, the hiddens of a tourist city, coins, mineralogy.
You then set yourself up as the expert, and people at your B&B (themed, classes, displays, whatever) get the deep value of your wisdom, knowledge and connections to excite enthusiasts.
Her theory is, you an charge what you what, since you essentially have no competition.
.

Becoming an expert in something, especially if it is something special in your area.

It is essential

It is about finding a niche (you enjoy) and becoming an EXPERT in it. Essentially, she is not competing with others, as she is it and people seek her out.

Talked about this a lot in the past.

THIS I think is the future. Her theory is, you an charge what you what, since you essentially have no competition.

Been sayin' this for years.
You'll find that there are a couple others on this forum that believe in these concepts and they are successfully operating experiential destination based properties. It is true that many continue to operate mainly as a place to stay that supplements what people come to do in their area, but that type of property is going to feel a lot of pressure in the years to come as the hotel build out continues to expand to meet the demand.
I'm kind of glad to have a chance to reaffirm all these principles every so often. Thanks.
So...what will your area of expertise be? What niche is yours for the taking? What brand will you build?
.

Personally, as we are not open yet and looking for the right place, the niche will depend on the final place.
.

Where you end up really should reflect a number of things about YOU:
Location (love the "green" SE and personally hate the dry brown out west. Others are the opposite.)
City or country, rural or small town?
Do you have any hobbies already? Honestly, I don't see a staunch environmentalist embracing the ATV world as a theme/focus for their inn.
I've had to "work" to know about hiking, biking and such since I naturally do very little of it (then as an innkeeper had little time anyway).
I've tried to make my inn serve several markets. WE were lucky--when one dried up, another was doing OK. However, the marketing gurus go nuts because I have to set up different web pages for different aspects and google probably wonders what in the world is going on! They penalize lack of consistency....
Still, business, leisure, weddings all work for us with a few "travel through" and school related for good measure.

 

[Garden_Pix_Inn]

Focus on the financials. But before you go there, are you absolutely sure that YOU can afford to buy it? Do you have at least 30-40% down? Are you pre-approved for a loan?
I have 2 people I know who 's sale just fell through because the buyers thought they could get a loan. Financing is still the most difficult thing about buying a b&b and it's just devastating for both the buyer and the seller when at the final stage, it falls through.
If you think you really can afford it, then while you're there, go to the county and ask your questions. Have them pull the records for the property and make sure that the b&b is licensed for the number of rooms that it's listed. That's also where you would find the information on whether it's permitted for more rooms if you wanted to add on.
Are they hiring staff? How many hours. Are there things the staff is doing that you as a new owner would do instead, thereby saving some money?
But PLEASE, before you go, be sure that you actually have enough funds to buy it if you like it. The roller coaster that innkeepers are put through each and every time there is a lookie-loo is gut wrenching..

But PLEASE, before you go, be sure that you actually have enough funds to buy it if you like it. The roller coaster that innkeepers are put through each and every time there is a lookie-loo is gut wrenching.

This is why we chose to use a business broker--they prequalify them for the most part. We'd also partly owner-finance IF they could get a loan for the value of the property elsewhere.
"Affordability"is a function of being priced correctly and able to withstand the rigors of the financing paperwork. We haven't gotten that far (yet).
Some days, however, selling an inn is like finding Mr. Right. You go on a lot of dates. Not all of them work out. Some of them fail to work out for mysterious (funky reasons--like the chicken down the road crowed THEN the "buyer" said she wanted a more rural location. Honey, she didn't know WHAT she wanted!!!) Think of it as dating.
Of course, we all want the one coming in the door to be "the one." And we focus on believing it. One hopes that IF someone comes all that way to see a place they, too, think and hope it might be "the one." If they don't think so, they are wasting all our time! (A curse on tire kickers, of which we've had few, if any, due to the broker screening them).

 

[Garden_Pix_Inn]

The inn is an existing inn that serves breakfast and an afternoon snack. I was wondering what their clientele is, in which months? What type of breakfast they are currently serving? what repeat guests expect from the Inn? Could dinner be served - what does their zoning cover ....

Septic, septic, septic
That keeps coming up. It limits # guests, rooms, baths, etc. here
Trust nothing you are told. Don't assume what they do automatically pass to you.
Talk to zoning and sewage officers.
.

Septic, septic, septic That keeps coming up. It limits # guests, rooms, baths, etc. here Trust nothing you are told. Don't assume what they do automatically pass to you. Talk to zoning and sewage officers.

Ha ha. We were told our building (back in 1998) needed to get off septic and onto sewer line out front. OK, we get it. So hubby went to look for the utilities down at the street and under the manhole marked SEWER he found........
.....the water meter!
In the end we paid half of $15,000 to tunnel under the highway and put in our own manhole and sewer connection (sharing with new church next door). NO problems once that was in, our water line was moved over onto our land... and over time the power line, phone line, cable line were all replaced. Last year a tornado got the service boxes so that triggered a new transformer (power coop paid for it). So, now we are "all new" and good to go.
We probably have receipts to prove every purchase. Buyers should just ask.
In "the South" most things do pass on if already solid zoning law. Only "conditional uses" and some "grandfathered" items do not. Have to check the difference. I find the $20,000 to change uses very strange. A determined developer would quickly find the money and that price would not "keep the neighborhood safe from development." Only rule of thumb is that everywhere is different. ASK and get a copy of the laws. Then READ it. Hire an attorney as needed.

 

[Garden_Pix_Inn]

Welcome Lisa
I was struggling with a way to answer since the questions that are most important are going to be property specific. It would also depend on where you want to go with it. What you vision for the future is. That sort of thing.
If your tag is an indicator and you are headed in the direction we went, (full service inn with breakfast and dinner) making sure you can clear any zoning, permit, and regulation hurdles is a good thing to know going in. That helps you ask questions related to kitchen conversion, which is a very large cost. Again, I am just grasping at straws since I saw the chef tag..

(full service inn with breakfast and dinner) making sure you can clear any zoning, permit, and regulation hurdles is a good thing to know going in. That helps you ask questions related to kitchen conversion, which is a very large cost.

I will tell you right now, put in a restaurant ONLY if it is necessary to make the inn a success in the market it is in.
Where I am we could get a restaurant license, permitting us to serve guests (grey area for serving the public due to zoning). HOWEVER, even IF I could cook dinners, I would not do it. After years of developing slowly, we finally have three really good restaurants in our town and the golf course opening theirs 3 days/week. I absolutely would not do dinner Thursday-Sat. here. It would take all my guests away from the restaurants. We only have 5 guest rooms but those meals help make or break the independent restaurants as a group. We NEED them (as a town) to have a forward moving, developing, tourism trade which attracts more guests to the inn elsewhere around the town.
So, you could do it, but would it be the right thing?
On the other hand, there is NO fine dining Sunday-Tuesday in this town. And IF I were a chef I'd see what I could do to cook those nights, thereby enhancing with the existing market.
Note: unless you REQUIRE your guests to eat dinner with you, those local restaurants are going to FEEL like competition (if your business plan counts on those meals in some quantity). On the flip side, Sunday-Tues. meals here would be "found money" (especially if you could find a way to feed locals, too, as a public restaurant or "private party" locale to get around any zoning issues).
Of course, the reason the pros don't stay open is (1) need to rest/have days off (2) thin market on those days of the week (locals don't eat out and/or tourists aren't as present). Nonetheless, money to be made.
I would think this is a nuance you have not thought of.
I have a friend with a 12 room inn in a rural area of "Amish Country" who does numerous dinners. She will be wanting to sell/list to sell "within the year." Dinners almost every night are essential to her success and she has done very well at getting people to dine with her (great cook!) Her inn has little to no zoning and state law allows her something like 2 or 3 (equivalent of) tour bus loads of diners/month, all without any regulation of her kitchen."Paradise" if you hate regulation! Undersea should write me at [email protected] if you'd like further details about this property.
Hers is a case where NO alternative dining is available nearby so having dinners/restaurant is essential. Not every inn should do it--I feel this one must. This inn/innkeeper, by the way, is considered by MY friends to be a marketing genius. Food/dinner is part of the niche she has carved out for herself. The next owner will probably need to follow her lead. Chefs: please get in line.

 

[happykeeper]

Welcome Lisa
I was struggling with a way to answer since the questions that are most important are going to be property specific. It would also depend on where you want to go with it. What you vision for the future is. That sort of thing.
If your tag is an indicator and you are headed in the direction we went, (full service inn with breakfast and dinner) making sure you can clear any zoning, permit, and regulation hurdles is a good thing to know going in. That helps you ask questions related to kitchen conversion, which is a very large cost. Again, I am just grasping at straws since I saw the chef tag..

(full service inn with breakfast and dinner) making sure you can clear any zoning, permit, and regulation hurdles is a good thing to know going in. That helps you ask questions related to kitchen conversion, which is a very large cost.

I will tell you right now, put in a restaurant ONLY if it is necessary to make the inn a success in the market it is in.
Where I am we could get a restaurant license, permitting us to serve guests (grey area for serving the public due to zoning). HOWEVER, even IF I could cook dinners, I would not do it. After years of developing slowly, we finally have three really good restaurants in our town and the golf course opening theirs 3 days/week. I absolutely would not do dinner Thursday-Sat. here. It would take all my guests away from the restaurants. We only have 5 guest rooms but those meals help make or break the independent restaurants as a group. We NEED them (as a town) to have a forward moving, developing, tourism trade which attracts more guests to the inn elsewhere around the town.
So, you could do it, but would it be the right thing?
On the other hand, there is NO fine dining Sunday-Tuesday in this town. And IF I were a chef I'd see what I could do to cook those nights, thereby enhancing with the existing market.
Note: unless you REQUIRE your guests to eat dinner with you, those local restaurants are going to FEEL like competition (if your business plan counts on those meals in some quantity). On the flip side, Sunday-Tues. meals here would be "found money" (especially if you could find a way to feed locals, too, as a public restaurant or "private party" locale to get around any zoning issues).
Of course, the reason the pros don't stay open is (1) need to rest/have days off (2) thin market on those days of the week (locals don't eat out and/or tourists aren't as present). Nonetheless, money to be made.
I would think this is a nuance you have not thought of.
I have a friend with a 12 room inn in a rural area of "Amish Country" who does numerous dinners. She will be wanting to sell/list to sell "within the year." Dinners almost every night are essential to her success and she has done very well at getting people to dine with her (great cook!) Her inn has little to no zoning and state law allows her something like 2 or 3 (equivalent of) tour bus loads of diners/month, all without any regulation of her kitchen."Paradise" if you hate regulation! Undersea should write me at [email protected] if you'd like further details about this property.
Hers is a case where NO alternative dining is available nearby so having dinners/restaurant is essential. Not every inn should do it--I feel this one must. This inn/innkeeper, by the way, is considered by MY friends to be a marketing genius. Food/dinner is part of the niche she has carved out for herself. The next owner will probably need to follow her lead. Chefs: please get in line.
.

I would generally agree with all of that. We are building the locally sourced food brand and have found that dinner done in a way that works for us has been a huge revenue boost. We are in a rural area with few choices, so it makes perfect sense for us to spend the money to commercialize the kitchen. It will be a major part of being viable when we go to sell. If we were in proximity to great dining, it might be a waste of money. Right now, the best dining in our area is at our place, so we are the big fish in the small pond and it is working out well.

 

[Generic]

Zoning in writing. Just because it is currently operating does not mean it will be legal once sold. My City got zoning AFTER I opened. Existing businesses were "grandfathered". Some may require a variance to continue if passing to a different owner. MY B & B is OK because I am in a mixed use (both residential and commercial). AND since I am on the Zoning Commission, ensured a B & B can be located in ANY district in my City., The Mayor sheepishly said in a Develop,emt Authority meeting (yes, I am on that too) that we need more B & Bs in our City. He was surprised when I said (almost shouted) YES, PLEASE!!!
The suggestion about the "lay of the land" is also excellent. Get the town newspaper - read back issues to see what is happening in the town. Are there empty storefronts? Does the town look like a place people would come to and enjoy enough to return? THIS should be your responsibility to check out.
I also agree with the previous comments about financials - YOURS and theirs. It is not fair to them to go through the answering your questions about THEIR financials if yours are not in order. Questions to ask would depend on the size of the B & B, the laws of the City/County/State regarding its operation (meals permitted, facilities required (remember grandfather), is innkeeper required on-site (will you be living on-site), are there any "grandfather" clauses that die with the sale that will cause more $$$$. Utility costs - what are they.
Good luck to both you and the seller..

Owners cannot--and should not-- speak to zoning for a number of reasons, the first of which is it is NOT on them as the person leaving. Second, they have no standing and cannot change what is "reality." (3) they might not even know the truth or understand the laws (we are more skilled than most and WE won't speak to it for you). [See below]
Instead, it is up to the buyer to go to town hall or county zoning dept. and find out the truth from the horse's mouth.
Note: [We went to town hall and ASKED before buying our inn.] My husband was a real estate attorney. I was a reporter covering zoning and such, dealing with the building dept. weekly. We would NEVER sign a sale contract making the sale contingent on zoning. We aren't hiding the truth--we just aren't taking on YOUR issue. PS my zoning won't change when we sell, "I think."
.

at least in the UK the equivalent of Zoning which is planning permission stays with the property ie we have our basement Zoned as a Café from a previous owner, we won't change it in case we ever want to do that will just sit as it is. Also in my town we are very keen to have bedrooms so there is a $20,000 fee to change from bedrooms to house.
.

there is a $20,000 fee to change from bedrooms to house.

That seems like a major rip-off
.

You should see the fee around here to divide a house. I think it's 10% of the land value. So in my case, $50K.

 

[gillumhouse]

The inn is an existing inn that serves breakfast and an afternoon snack. I was wondering what their clientele is, in which months? What type of breakfast they are currently serving? what repeat guests expect from the Inn? Could dinner be served - what does their zoning cover ....

Septic, septic, septic
That keeps coming up. It limits # guests, rooms, baths, etc. here
Trust nothing you are told. Don't assume what they do automatically pass to you.
Talk to zoning and sewage officers.
.

Septic, septic, septic That keeps coming up. It limits # guests, rooms, baths, etc. here Trust nothing you are told. Don't assume what they do automatically pass to you. Talk to zoning and sewage officers.

Ha ha. We were told our building (back in 1998) needed to get off septic and onto sewer line out front. OK, we get it. So hubby went to look for the utilities down at the street and under the manhole marked SEWER he found........
.....the water meter!
In the end we paid half of $15,000 to tunnel under the highway and put in our own manhole and sewer connection (sharing with new church next door). NO problems once that was in, our water line was moved over onto our land... and over time the power line, phone line, cable line were all replaced. Last year a tornado got the service boxes so that triggered a new transformer (power coop paid for it). So, now we are "all new" and good to go.
We probably have receipts to prove every purchase. Buyers should just ask.
In "the South" most things do pass on if already solid zoning law. Only "conditional uses" and some "grandfathered" items do not. Have to check the difference. I find the $20,000 to change uses very strange. A determined developer would quickly find the money and that price would not "keep the neighborhood safe from development." Only rule of thumb is that everywhere is different. ASK and get a copy of the laws. Then READ it. Hire an attorney as needed.
.

Septic, septic, septic That keeps coming up. It limits # guests, rooms, baths, etc. here Trust nothing you are told. Don't assume what they do automatically pass to you. Talk to zoning and sewage officers.

Ha ha. We were told our building (back in 1998) needed to get off septic and onto sewer line out front. OK, we get it. So hubby went to look for the utilities down at the street and under the manhole marked SEWER he found........
.....the water meter!
In the end we paid half of $15,000 to tunnel under the highway and put in our own manhole and sewer connection (sharing with new church next door). NO problems once that was in, our water line was moved over onto our land... and over time the power line, phone line, cable line were all replaced. Last year a tornado got the service boxes so that triggered a new transformer (power coop paid for it). So, now we are "all new" and good to go.
We probably have receipts to prove every purchase. Buyers should just ask.
In "the South" most things do pass on if already solid zoning law. Only "conditional uses" and some "grandfathered" items do not. Have to check the difference. I find the $20,000 to change uses very strange. A determined developer would quickly find the money and that price would not "keep the neighborhood safe from development." Only rule of thumb is that everywhere is different. ASK and get a copy of the laws. Then READ it. Hire an attorney as needed.

When we first moved here we installed my aunt upstairs. Every time I would go to take a shower, I would shake a fist at upstairs because the water pressure would drop to NOTHING. THEN I discovered it was NOT her turning water on. I discovered we were sharing a 2 inch line with the house behind us that had originally been the wash house/garage for this property. AND their water meter was on my property. A request to City Council before I opened my B & B to get my own water line and their meter on their property was granted as I pointed out, guests will expect good water pressure. I still pray nothing ever goes wrong with their sewer line, it runs across our yard into our line before getting to the main line. Old City sysstems are interesting.