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Getting ready - where to start?

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duhwitt

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Hi all!
I'm back, although I have been luking. I went to B&B college and learned a lot, but also learned that this really is what I want to do. I didn't expect it to be now...but my current situation is such that I'm thinking NOW is the time!
There's 3 existing B&Bs I'm considering purchasing, so where do I start? I know I need to write up a business plan, get financing, get a lawyer, get licenses, etc etc - but which do I do first?? Anyone have a checklist??
I'm getting really excited about my next career...I feel really good about this decision.
Thanks!
Paula
 

Morticia

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Probably the first thing you want is to get the financials from the 3 places you are considering to see if any of them support your dream. You'll want to go and view them in person if you haven't done that. Determine if they are even located in a place you want to live.
If you went to B&B college then all of the 'forms' you need to do the calculations should have been included in that course. How to determine everything the bank will ask you should also have been covered.
If you didn't get any sample spreadsheets for how to determine if the biz is viable for you, then go here and scroll down to the B&B planning spreadsheet and look at that.
 

duhwitt

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Oh definitely, I've been running the numbers (working on the 3rd one right now) and working on seeing the properties. There all in locations that would be fine for me to live, I wouldn't consider them otherwise :)
But once I make the decision to move forward with one...I've never started my own business before! Financing or lawyer first?
 

Breakfast Diva

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Oh definitely, I've been running the numbers (working on the 3rd one right now) and working on seeing the properties. There all in locations that would be fine for me to live, I wouldn't consider them otherwise :)
But once I make the decision to move forward with one...I've never started my own business before! Financing or lawyer first?.
duhwitt said:
Oh definitely, I've been running the numbers (working on the 3rd one right now) and working on seeing the properties. There all in locations that would be fine for me to live, I wouldn't consider them otherwise :)
But once I make the decision to move forward with one...I've never started my own business before! Financing or lawyer first?
I'm a bit confused...you say you're looking at 3 existing B&Bs, but then you say you've never started your own business before. This is not a start up business. You must make sure you can get financing, check that their business has all the necessary licenses and permits, otherwise there is no use for a lawyer!
 

Morticia

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Oh definitely, I've been running the numbers (working on the 3rd one right now) and working on seeing the properties. There all in locations that would be fine for me to live, I wouldn't consider them otherwise :)
But once I make the decision to move forward with one...I've never started my own business before! Financing or lawyer first?.
duhwitt said:
Oh definitely, I've been running the numbers (working on the 3rd one right now) and working on seeing the properties. There all in locations that would be fine for me to live, I wouldn't consider them otherwise :)
But once I make the decision to move forward with one...I've never started my own business before! Financing or lawyer first?
I'm trying to remember where we started. We looked at a few places with very knowledgeable B&B brokers. That gave us the 'jargon'. And they helped us figure out how much we would need down and how much we should have in reserve. Then we looked at some places with realtors and when we threw the jargon at them they couldn't answer, moved on. We took a class. We looked some more. All the while doing the spreadsheet and assuming that if it was a going concern we would lose at LEAST 30% of the business right away from guests not wanting to take a chance on a newbie. (We were pretty close on that number.) So use that spreadsheet to see where the numbers break to the point you are pulling money out of your savings to pay the bills. How long can you live like that?
OK, then we found this place and checked to be sure it was legal and that no one in the town was going to hit us with new regs. (We did that all ourselves by going to the town hall and talking with everyone who would talk with us, which was everyone.) We looked at the building plans to be sure everything done to the building had been permitted properly.
Then we put in an offer based on our interpretation of the numbers and the value of the property we were buying. Then we wrote up a plan to buy the place. We never actually wrote a business plan which was a mistake because we have never found the time to do one since. Then we talked to the bank and they told us what they needed and then we went to a different bank with less strict requirements. Then we got the lawyer and the acct to look things over.
Every single person who looked over the business missed something. So we did end up with problems after closing.
If you want more help in doing the whole process, then get a lawyer and an acct early on.
 

Mr.Design

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Oh definitely, I've been running the numbers (working on the 3rd one right now) and working on seeing the properties. There all in locations that would be fine for me to live, I wouldn't consider them otherwise :)
But once I make the decision to move forward with one...I've never started my own business before! Financing or lawyer first?.
Unless you're dealing with an extremely lax bank, you're going to need a business plan before they even consider financing. This is for all businesses though, not just a B&B.
Try starting with the Small Business Administration. They have some good information: http://www.sba.gov
 

JBloggs

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If you are changing careers - which most are when they buy a BnB then the bank needs a huge chunk down and numbers to match it. They do not want to take a risk on someone not running this business properly. It is not an easy business to START unless you have a good chunk o' change behind you. The reason typically in the past most innkeepers were in pre/near or retirement age. When they see younger innkeepers they think they are hired or inherited the big old house.
 
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