Operational breakdown

[4arosa]

Hello.
Does anyone have a breakdown of an operational budget for a B&B? I've come across the following and wonder how accurate/realistic it is:
Food 23%
Labour 37%
Overhead 30%
Profit 10%
Thank you for any and all comments.
Fritz in Whistler, BC

 

[swirt]

HI Fritz and welcome to INNspiring.com
I think an operational breakdown for a B&B is going to have so much variation from one B&B to another that even if 20 innkeepers here gave their breakdown they would look nothing like anyone else's. Everyone's situations are so vastly different. Some have no mortgage and simply have food and utility costs. While others have huge mortgages and supply skimpy breakfasts. Some have no staff while others have several staff. One innkeeper's example will bear little resemblance to another.
You might get a closer fit if you describe the kind of inn you have / want to have and then ask similar inns to respond. It would at least let you compare apples to apples.

 

[happykeeper]

Welcome Fritz- What Swirt said plus
We find that there is not much connection between the great life we live and the money we make. The fact is that our standard of living is, because of the job we do, is higher than most without it costing a lot. If we serve premium lox to our guests, who gets to have some- we do- and so on.
In many ways, our profits are hidden in our expenses and the traditional business model is a little short on understanding what goes on and how it translates. That doesn't mean we don't have a plan and an accounting. It just means that running numbers like you own a tire shop won't work.
We have a rough idea of what life costs each month and we compare that with dynamic monthly revenue to see if we have to stretch or shrink. When we run in the black for a few months, the trip gets planned, the new bed gets bought, and the cat gets a new flea collar.

Just kidding - we don't have a cat!

 

[gillumhouse]

You may think that the costs will be proportinate to the size of the inn but that does not work either. Some are in high-end areas - meaning high utulity rates, higher taxes, and high costs of supplies. Where some pay real estate taxes in the thousands, mine although at the highest rate they can possibly charge, are in the hundreds. Insurance rates will vary. Even somthing as small as OJ will create a variable - most here will serve only Premium not from concentrate but others may serve the frozen concentrate or the whatever is on sale this week. Some serve full breafasts, some buffet, and others Continental - and some by law can only do Continental as in pre-packaged. There IS no standard answer.

 

[JunieBJones (JBJ)]

Labor? You mean we get paid!

 

[JunieBJones (JBJ)]

I don't think he is asking about mortgage or property taxes. If so, then our CT or NJ innkeepers can say that is a HUGE % of their expenses.
He is talking about costs to operate daily. One innkeeper said she can serve breakfast for $2 per guest, we spend more than that per guest on coffee. So it is apples and oranges.
Fritz, maybe ask a specific question on one area and then get a bulk of responses from the forum members here?
PS I love Whistler -you would need a category for hot cocoa alone.

 

[Tony]

I don't have anything to add except to say that Whistler is truly one of the best places I've visited. Having an inn in that setting must be surreal.

 

[4arosa]

Hi all,
my wife and I are the resident Innkeeper of the #1 B&B in Whistler according to Trip advizer. We have 8 bedrooms, can sleep up to 16 people, and the two of us do 80% of all the work. The owners do look after the big maintenace issues and the marketing.
We do serve a full breakfast with appetizer, main course , toast , juice and coffee and tea. We do not serve any pancakes, waffles or french toast. We used to serve muffins or danishes for breaky too, but it always went to waste. Apres ski was an other issue we cut out for the moment do to the same reason. People always have enough to eat. We do have free fruit, coffee, tea and pop available 24 hours.
So the % would be for the daily operation of the inn. Our owners live 3 hours away, and we have the freedom to run the business as we see fit. We both have worked for A major hotel chain in Canada for many years. I, m a Swiss trained chef by trade, but was out of the business due to major food allergies. Doing breakfasts is ok for my, but certainly I would not be to interested in doing suppers too.
Thanks for all your input.

 

[Morticia]

Hi all,
my wife and I are the resident Innkeeper of the #1 B&B in Whistler according to Trip advizer. We have 8 bedrooms, can sleep up to 16 people, and the two of us do 80% of all the work. The owners do look after the big maintenace issues and the marketing.
We do serve a full breakfast with appetizer, main course , toast , juice and coffee and tea. We do not serve any pancakes, waffles or french toast. We used to serve muffins or danishes for breaky too, but it always went to waste. Apres ski was an other issue we cut out for the moment do to the same reason. People always have enough to eat. We do have free fruit, coffee, tea and pop available 24 hours.
So the % would be for the daily operation of the inn. Our owners live 3 hours away, and we have the freedom to run the business as we see fit. We both have worked for A major hotel chain in Canada for many years. I, m a Swiss trained chef by trade, but was out of the business due to major food allergies. Doing breakfasts is ok for my, but certainly I would not be to interested in doing suppers too.
Thanks for all your input..

So in your breakdown, are you the 37% labour that you listed?

 

[4arosa]

So in your breakdown, are you the 37% labour that you listed?
No way would we be the 37% labour.
We are paid a salary. The family ( ownerns) do the final bookkeeping and propably take some money out of the company. This whole issue came up, because the owners think they should make a great profit without much putting back in for upgrades and future marketing. Business does not just show up, even if you are in a desirable location for some tourists. Our maine season is winter and secondary would be the summer. I would like to see the summer to be our main season, because there is way more activities available.

 

[Morticia]

So in your breakdown, are you the 37% labour that you listed?
No way would we be the 37% labour.
We are paid a salary. The family ( ownerns) do the final bookkeeping and propably take some money out of the company. This whole issue came up, because the owners think they should make a great profit without much putting back in for upgrades and future marketing. Business does not just show up, even if you are in a desirable location for some tourists. Our maine season is winter and secondary would be the summer. I would like to see the summer to be our main season, because there is way more activities available..

Oh dear. If they bought the biz thinking they were going to hire everything out AND make a huge profit, I think they're mistaken! Did you mention how many rooms you have?
You HAVE to continually do updates and maintenance, including buying new linens that you thought were going to last 5 or more years!

 

[Morticia]

So in your breakdown, are you the 37% labour that you listed?
No way would we be the 37% labour.
We are paid a salary. The family ( ownerns) do the final bookkeeping and propably take some money out of the company. This whole issue came up, because the owners think they should make a great profit without much putting back in for upgrades and future marketing. Business does not just show up, even if you are in a desirable location for some tourists. Our maine season is winter and secondary would be the summer. I would like to see the summer to be our main season, because there is way more activities available..

Another thought came to mind...if you are doing 80% of the work and aren't making that 37% 'labour' breakout, who is???

 

[happykeeper]

So in your breakdown, are you the 37% labour that you listed?
No way would we be the 37% labour.
We are paid a salary. The family ( ownerns) do the final bookkeeping and propably take some money out of the company. This whole issue came up, because the owners think they should make a great profit without much putting back in for upgrades and future marketing. Business does not just show up, even if you are in a desirable location for some tourists. Our maine season is winter and secondary would be the summer. I would like to see the summer to be our main season, because there is way more activities available..

Just a wee confused about where you are coming from on this.
IF you are on salary, why would you be worried about this? You are hired to run the inn- they pay you a salary- and they make or lose money. Do you have profit sharing? Do you get a bonus? ??

 

[birdwatcher]

Profit? Well havent really seen PROFIT yet. BUDGETING is more like it. As all have said every B & B is different than in their amenities, location, guests and other things. We do all the work ourselves and my husband works outside the Inn to keep us going through the winter and its been rough for 3 years now. We said we would give the Inn 5 years and see where its going. Everything goes back into the business. And the truth is no you can't plan it or think it like any other business. Although there are the props to go with it as well.