Opening a bed and breakfast business plan

Opening your bed and breakfast business plan is very simple, so let's take a look at the basics….

Your key performance indicators for your business plan are:

Occupancy rate

Something called REVPAR which means revenue per available room

Which simply means the amount of money you can realistically make in any given period by each room

Once you've established this, then you can look at your profit

Your profit is your REVPAR minus the costs of the room being occupied

These costs must be kept in check as it is so easy to keep adding little touches without paying attention to the cost to your bottom line – your overall profit

Your costs need to take into account the cleaning, laundry, light maintenance such as replacement of light bulbs or tea and coffee supplies, cost of breakfast or anything else that has to be paid when someone puts their head on one of your lovely pillows.

You should include any taxes and commissions to booking agents in this calculation too

This is where most people die of shock

Many smaller bed and breakfast owners don't do this exercise and so have no real idea how much profit they make, and keep in mind this is still only the gross profit stage.

Let's now come to net profit

After you've taken out the variable costs (those costs that only need to be taken into account when someone occupies a room) we need to look at fixed costs.

These are costs that happen regardless of whether a room is occupied or not

Costs such as home loan, gas, electricity, water, website hosting, online booking software, payment processors etc.

The gross profit you make every time someone sleeps in one of your beautiful rooms becomes a contribution to your fixed costs.

Remember to include payment to yourself in your fixed costs too

No-one can work for nothing

Good luck with everything, and if you need help with working out these numbers, then go ahead and book a private 1:1 call with me by CLICKING HERE, so you'll get the whole picture of what you can realistically expect from your bed and breakfast business plan

Yvonne x

how to run a bed and breakfast






Yvonne Halling is the leading consultant, coach and mentor for the small hospitality industry. CLICK HERE to start with her free report “Make More, Work Less While Adding Huge Value to Your Guests (and your bank account)”