Hello, I’m Yvonne Halling from Bed and Breakfast Coach.com and in this video I’m going to share with you the earning potential of a properly running bed and breakfast
So what is the earning potential of a properly running bed and breakfast?
The first thing to establish is how many rooms you have and your average rate per night. Then decide how many days or nights per year you plan to be open.
So as an example, if you had 1 room and you charged 100 per night, and wanted to be open 365 days a year, then you would times 1 room x 100 per night x 365 which will give you an earning potential of 36,500
Of course no-one can work 365 days a year, and indeed it would be quite a challenge to be full every single day, so then you’d need to decide just how many days or nights you want to be actually open and working.
So if you wanted to be open just 25% of the year, you would x 36,500 by 25% to arrive at 9,125.
Now you have a baseline – the number of rooms you have times your average rate per night x the amount of time during the year you want to be open, and when you want to be working.
Next, you might be asking how realistic 25% is. In fact it’s very easy to reach an occupancy rate of just 25%, and even 35% but to get to 50% occupancy annualised over the year, then you’ll need to polish up your marketing skills.
Even at 50% occupancy, you’ll still have plenty of time for yourself as well as making a decent amount of money for a truly lifestyle business, as long as you’re careful with your expenses and don’t let them get out of hand.
But how do you go higher?
Well, our income so far is only based on sales of rooms. If you want to make more, but not add too much to your workload, you can offer what we call upsells. These are items that your guests can add on to their room rate which will enhance their stay, and add to your bank account.
Your success with offering upsells will depend largely on how good your are at talking about them and presenting them to your guests. This is a skill set that can be learned, and I recommend you do learn it. Your guests will thank you for it, I promise you
So let’s talk now about expenses, because this is an area that most hosts don’t pay enough attention to, but you’ll want to be careful here.
Expenses can easily run away from you, if you don’t cost out what everything costs you to deliver. You’ll need to know how long your cleaners take to turnover a room, what the laundry charges to wash, iron and perhaps deliver your laundry back to you, and what your breakfast costs to prepare, cook and put on a plate.
Small expenses can add up, so be careful.
If you’d like to do these calculations yourself you can grab my B&B Calculator Tool for yourself and enter in your own numbers to see just how much your earning potential will be, plus what your expenses will be, and how many rooms you’ll need to sell to make a profit. There’s a downloadable spreadsheet and a short video tutorial on how to use it, and you can get it for just $17. Click the link below to access it now
Whatever you do keep a close eye on your numbers, because there’s nothing worse than working all year and finding you have nothing much in your bank account to show for your efforts.
In the meantime, come over and join our international Facebook Group, where you’ll find a wealth of resources and wisdom to help you start, run and grow a bed and breakfast on your terms HERE
Yvonne Halling is an award-winning consultant, coach and mentor to independent hospitality businesses worldwide, where she helps clients to increase their income by at least 25% in one season, while working less and having an easier life. Book an initial free call with her by clicking the link below