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Need help figuring out if a start up B&B will be profitable before going to a bank!! How can I do this?

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Still Dreaming

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Hello Everyone,
I have been an aspiring for years now. I am looking at a private home in our area to turn into a B&B. I am not sure how to put together the numbers to figure out if it will be profitable. I need this before going to a bank. I love reading all of your posts. Thanks for all of the great advice!!
Lori
 

Madeleine

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Are there any B&B properties in your area already? If there are, you can get tax records at the state level for the lodging tax paid. Then you can calculate out how much revenue that means. Will you make the same amount? Not the first few years unless you are offering something no one else has, offering a better something, there is a NEED for the number of rooms you are going to have.
How do you know if there is a need? Is everything in your area full all the time?
The bank will want to know all of this. You can talk with a local Chamber of Commerce where they may have numbers you can make use of.
The bank will also want to know why they should take a chance on you. What credentials do you have? Prior successful business owner? Experience in the field? Money in the bank in case you fail?
BTW, you won't get funding if you are going to have to borrow all of the money needed to finance the project. The bank will require a HEFTY chunk o'change in the liquid assets above and beyond what you intend to borrow. (Or a partner with a job that will cover the mortgage + expenses.)
 

JBloggs

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That is an impossible question to answer.
Will you have a mortgage and overhead? Is there an outside job also included? Location? Marketing? What is the B&B like?
You can have the same inn with 5 diff owners and each of them with different personal skills and the revenue will reflect that.
 

Copperhead

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Sometimes the state B&B association can provide some figures to help you crunch the numbers. Worth a call!
 

Joey Camb

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don't know if its the same in the USA but can you find out things like avereage occupancy figures? what are the attractions ie why would people come to where you are? in france average occupancy is something like 36% id cry if mine were as low as that!
 
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