Hospitality background

[myschae]

Hospitality experience is not needed. We had none before were bought our inn.
Being hospitable is critical. We've seen so many innkeepers who can't make guests feel they're welcome in their home.

We train our team to greet guests when they walk in the door as if they're a favorite aunt they haven't seen in 10 years.

Yes! My husband and I have discussed the vision for the 'vibe' of our inn. We definitely want to offer the 'like visiting friends vacation' style accomodation and market to that space.

 

[myschae]

As Mort said, raise the rates if it is 90% occupancy. that rate will not only kill you, but it will not help your marriage. You will be exhausted. I would not ever (as if I have to worry about it) want to be more than 75%. I am actually looking to increase my Elopements as a revenue source so I need fewer room nights to support me. Fewer room flips, less laundry......

One thing I advise in my aspiring workshops is to go to a lawyer and draw up a succession document for the business. I have seen too many (it will never happen) divorces and/or deaths kill a B & B. I know of at least 2 personally that had to sell because of this. One divorce - he left her with nothing and she could not handle the workload alone. The other - he died, did not believe in insurance, and left the house to her but the money to his kids. She had to sell up. It is cheaper to look at ALL the possibilities and what ifs in the beginning. Stuff happens and this is something no one thinks of until it happens.

Excellent advice, thank you. We will definitely do this step. This past year, we've had ... well, I suppose most of us at least know of someone who lost someone unexpectedly who hadn't prepared anything or even had a filing system. No one likes to think of these kinds of problems but you are so correct that advance planning makes a world of difference.

What would a settlement plan look like? I'm sitting here picturing something like a prenuptial agreement that spells out what happens if we end up at our wits end with each other? Is typical life insurance the proper instrument for business continuance in case of illness/death? Any thoughts on what's out there (search terms)? This is great information; thank you so much.

 

[Morticia]

@myschae When we were looking at properties we had a spreadsheet we used to determine at what point a particular property ‘broke.’ If we lost 10% of the business, could we survive? 20%? Etc. If they have a strong repeat business, you will lose some of that. It’s ok. Unless you really do egregious things in your business that causes everyone to bail, you’ll lose some of the old crowd just by virtue of not being the previous owner (PO). Guests get attached to you.

We had a paper and pencil database when we started. (There was an actual database, but the PO’s didn’t hand it over.) We had guests arrive and ask, ‘who the hell are you?’ as we had no way to get in touch with guests in advance of their arrival to explain the change of ownership. Some of them made their next reservation on the way out the door, some did not. We also heard from some people that they didn’t want to ‘break in another set of owners,’ so they waited a couple of years before coming back.

Come back with a separate question about due diligence. Ask straight out what everyone missed and you’ll then have a list of what to check

 

[FHI2426]

Thank you for your reply.

We're investigating the money side of things currently as we build our business plan. Do you know if it's advisable to indicate that we'd both be willing and able to do outside (remote) consulting on the side as we've done in the business plan for the B&B or might that be taken as a lack of commitment to the business? It's in our back pocket always but it's difficult to tell how that might be interpreted by folks inside the industry or .... lenders.

We have enough assets to make a credible application with a strong business plan based on a conversation I've had with the banker for the B&B we are considering. The owner was kind enough to refer him to us by name and arrange for him to expect our phone call to get information about applying for the loan - talk about inspiring hospitality. The current owner is local to the area, isn't planning to leave, and has expressed willingness to answer questions as needed if we can make the arrangement work out. We're just trying to put together the best case we can while trying to be absolutely realistic about our chances in the industry.

Thank you for your thoughts.

Wrap everything in an LLC, both the property (one LLC) and the Business (seperate LLC)..

 

[myschae]

@myschae When we were looking at properties we had a spreadsheet we used to determine at what point a particular property ‘broke.’ If we lost 10% of the business, could we survive? 20%? Etc. If they have a strong repeat business, you will lose some of that. It’s ok. Unless you really do egregious things in your business that causes everyone to bail, you’ll lose some of the old crowd just by virtue of not being the previous owner (PO). Guests get attached to you.

We had a paper and pencil database when we started. (There was an actual database, but the PO’s didn’t hand it over.) We had guests arrive and ask, ‘who the hell are you?’ as we had no way to get in touch with guests in advance of their arrival to explain the change of ownership. Some of them made their next reservation on the way out the door, some did not. We also heard from some people that they didn’t want to ‘break in another set of owners,’ so they waited a couple of years before coming back.

Come back with a separate question about due diligence. Ask straight out what everyone missed and you’ll then have a list of what to check

I'm doing this.

 

[myschae]

Wrap everything in an LLC, both the property (one LLC) and the Business (seperate LLC)..

We're currently looking at three options: sole proprietorship, LLC, and S-corp. My husband is responsible for that; I think he's looking at the differences between an S-corp and LLC. If you have an easy answer as to why one works better for hospitality than the other, I'd love to hear it.

 

[gillumhouse]

Do not do sole proprietor. YOUR personal assets will be liable. When I opened, LLC & S-corp were not available to me. Tax time, my personal & B & B moosch together and if I went belly up, I would come out of it with my clothes - maybe.

 

[FHI2426]

Thank you so much!

I'm currently struggling with how to present our skills outside the industry to plausibly fitting inside the industry, if that makes sense. The bookkeeping/accounting is easy. His engineering role is federal regulatory compliance (FAA) and I have successfully conformed two full federal grant audits (ex. Title VI, Chapter 1 grant) -> attention to detail(?). I'm not sure what even qualifies as marketing experience, honestly. If you have any ideas or examples of how you presented that in a business plan, I'd love to hear it.

if you feel marketing is a weak spot and you want to hit the ground running, there are companies that can advise/ do it for you/ build web sites etc. We use Acorn and they have been so helpful with how to manage Google (who constantly change features/ algorithms etc). There are many who are DIY but we get a huge return on our investment in Acorn.. I can make intros if interested

 

[JimBoone]

Thank you for your reply.

We're investigating the money side of things currently as we build our business plan. Do you know if it's advisable to indicate that we'd both be willing and able to do outside (remote) consulting on the side as we've done in the business plan for the B&B or might that be taken as a lack of commitment to the business? It's in our back pocket always but it's difficult to tell how that might be interpreted by folks inside the industry or .... lenders.

We have enough assets to make a credible application with a strong business plan based on a conversation I've had with the banker for the B&B we are considering. The owner was kind enough to refer him to us by name and arrange for him to expect our phone call to get information about applying for the loan - talk about inspiring hospitality. The current owner is local to the area, isn't planning to leave, and has expressed willingness to answer questions as needed if we can make the arrangement work out. We're just trying to put together the best case we can while trying to be absolutely realistic about our chances in the industry.

Thank you for your thoughts.

Truth is I didn't have a business plan and expect I did everything wrong. I had photocopies of a spiral notebook showing rooms rented for the prior year an idea of what taxes, insurance and utilities would cost and a strong desire to make it happen. Financing, borrowed about 40% against home and rental property expecting rents to make those payments, borrowed/owed about 40% to original owner expecting room rentals to pay this note, owed about 20% to the seller/current owner due within 2 years. We arrived after dark on a wet December night expecting reservations to find the business closed, spent the night in a semi-clean room, how's that for a beginning to a new life?

If there is a bit of advice, choose an area your love, a place that suits your needs and don't overspend. It was always my expectation that I would work a job, that if the business just broke even and paid for itself we would be okay. I still enjoy this life, take time to smell the flowers and don't put yourself in the position of recreating the corporate type life from which you desire to escape.

 

[myschae]

if you feel marketing is a weak spot and you want to hit the ground running, there are companies that can advise/ do it for you/ build web sites etc. We use Acorn and they have been so helpful with how to manage Google (who constantly change features/ algorithms etc). There are many who are DIY but we get a huge return on our investment in Acorn.. I can make intros if interested

Thank you. CS is my 'day job' so I am fine with updating their website. I'm learning what I can about how travel sites work on fees and such but web building won't be a problem.