What Are the Top 5 Things You Should Consider When Buying an Existing B&B?
Running a Bed and Breakfast is an ideal way to make your property work for you. It can, however, be difficult to find the right investment especially if you are going to be living there.
Make sure that you have thought carefully about what it is you are looking for and how you are going to narrow down your search. Here we give you some things that you should look out for when buying a bed and breakfast. Keep them in mind and do a thorough due diligence so that you can be sure you are making a good investment.
1. The Location
The first thing, of course, is the location. This should be something that you are very careful in choosing. While you should be looking for somewhere that you would like to be based, you will also need to be careful to choose somewhere where there is a demand for accommodation.
Think about what competition is in the area and what it is that will draw people there. Is there a tourist attraction? A big event? Is it near the sea or a national park? People usually choose their accommodation once they already know where they are going, not the other way around.
Be sure to consider how seasonal the business will be, too. If you are in a town that throbs with tourists over the summer, what are your plans to fill beds and make money over the winter months?
2. The Guests
The type of person that you are planning on appealing to is going to determine the look of your B&B. Although you can make changes to the decor once you have bought the business, be aware that this will take a lot of additional capital.
Your target market will also influence the price that you can charge per room. Do you think you will be able to cover your costs and make a profit with the amount that guests pay to stay at the business you are considering? If not, what changes can you make to make it worth the extra money per night?
3. The Potential
When you are trying to find the right business, you need to have an eye on the future. Investing in a business will only really pay off if you are able to expand the offering and increase revenue.
Before you put an offer in on a business, identify areas for growth. Will you be able to offer lunch or dinner in addition to breakfast? Is there room for you to develop the property and increase the number of guests you can accommodate? Are there businesses in the area that you will be able to partner with in order to draw new people to your B&B?
If you are able to identify areas for growth, you will also need to be sure that you will be able to get the right planning permissions.
4. The Selling Point
Why will guests choose to stay with you over someone down the road? You will need to be clear about what your unique selling point will be and how the business you are buying will fit into this vision.
Having a clear brand and target audience will go a long way to ensure that you can create a clear brand that people will be able to identify with and get them to choose to stay with you.
5. The Due Diligence
None of the above will be possible if you are hit by surprises after you sign on the dotted line. Make sure you get help from a professional to go through the business’s books with a fine-tooth comb to see whether there are any irregularities.
If the business has not been doing well, is there a reason that means you will be able to get different outcomes? A bad reputation can be impossible to shake off so be wary of a good price based on this flaw.
Check the property and all of the items that will be included in the sale. What condition are they in? Will you have to replace them?
As long as you have a clear idea of what you are buying and where you plan to take the business in the future, you should be ready to start your new journey of Bed and Breakfast owner!
By Jo Thornley, Head of Brand and Partnerships at Dynamis.