How to start a bed and breakfast and run it successfully
Starting a bed and breakfast can be really rewarding, especially when happy guests leave positive reviews and spread the word about your B&B. When you start up, there is a lot to consider - from business insurance and energy savings to broadband and even finance matters. Bionic can help get your business up and running, helping to sort essentials and support you as your business grows.
In this guide, we provide you with what you need to know when it comes to the practical and financial considerations of starting a bed and breakfast business. With guests staying in your B&B, you should consider insurance to help protect your business. More information on what cover you might need can be found on our bed and breakfast insurance page.
How much does it cost to open a bed and breakfast?
One of the first questions you may ask when starting your business is ‘how much does it cost to open a bed and breakfast’. The cost of opening a bed and breakfast can vary a lot depending on the type, size and location of your business.
Initial expenses can typically include renovating, furnishing bedrooms, licensing for serving alcohol and playing music, professional fees, and even marketing. Ongoing costs are equally important to consider and could include insurance, utilities, food and beverage supplies, cleaning and laundry, maintenance, booking platform commissions and professional services, like legal support. For larger B&Bs, you might need to consider hiring help, which adds to costs too.
What are the key start-up costs?
When it comes to the cost of starting a bed and breakfast business, there are many different start-up costs to consider. Some of these will be one-off, initial costs you will need to pay when setting up your business. Others may be ongoing, which you will need to pay regularly and keep on top of. Here are some of the key expenses you should consider when setting up a bed and breakfast:
Premises and renovations
Your property is the core of your B&B business, whether you’re upgrading an existing home or converting a new building. The costs associated with purchasing your B&B can vary based on several factors, including the location, size of the property, number of bedrooms and any renovations required to get your property up to scratch. For example, you may want to extend your property to add more bedrooms or convert existing rooms into bedrooms and install ensuite bathrooms.
Equipment and furnishings
The equipment you need will depend on the size of your B&B, the number of bedrooms and the number of guests you can accommodate at one time. Typically, the equipment required by a bed and breakfast business includes: bedroom furnishings, bathroom accessories and kitchen equipment, to name a few. Depending on how many people you host, you may want to invest in larger kitchen equipment to help serve your guests more quickly. This may depend on whether you plan to serve a fry-up or continental breakfast.
Business rates
Business rates apply to commercial properties and should be built into the costs you are expected to pay. They can vary based on your location and property size, so check local authority guidance early.
Insurance costs
There are several types of business insurance that B&B businesses might need. All employers are legally obliged to have employers’ liability insurance to help protect against employee injury and illness as a result of work. There are also some additional insurance types you may choose to give your business extra protection, like public liability and product liability insurance.
Understanding how much bed and breakfast insurance costs could help protect your business from risks like liability claims, property loss, and guest injuries. If you are unsure what type of insurance is right for your business, the team at Bionic can help.
Energy costs
Heating, electricity, and hot water are other major operating costs for a B&B. Heating guest rooms, providing hot water, cooking breakfasts, laundering linens and maintaining comfortable communal spaces all rely heavily on gas and electricity. Because you are using your home for a business purpose, you’ll want to look at getting a fixed commercial energy deal. At Bionic, we work with a panel of regulated UK energy suppliers to help you compare energy suppliers and find options that may be suitable for your business.
Professional services
Accountants, lawyers, and consultants can help with tax planning, licences, and set‑up compliance. They play an important role in helping you run your business smoothly and stay compliant, preventing costly mistakes.
Marketing and branding
To help your B&B attract visitors and generate income, you will need to invest in marketing and branding. Initial costs to consider might include logo design, website development, professional photography, social media setup, menu design and signage. You can hire a professional to help you or do some of the work yourself.
Are there any regulations and licenses I need to be aware of?
B&B owners must comply with a range of regulations and licences that help keep guests safe.
Permission from mortgage lender or landlord
If you are using your home to run a business, you may need permission from your mortgage lender or landlord and your local council.
Planning permission
If your property wasn’t previously used as a commercial guest house, you may need planning permission for a change of use, as this may be regarded as a ‘change of use’ for your property.
Fire risk assessment
Setting up a B&B means that your home changes from being a residential property to being business premises, and this means you need to comply with fire safety legislation. Completing a fire risk assessment is mandatory to protect guests and staff.
Food hygiene regulations
Serving breakfast means you must register with your local council, just like any other business that serves food. You must follow good food hygiene practices to help with food safety. You must also provide clear allergen information to guests if requested when serving breakfast.
Gas safety
If your B&B uses gas appliances, you’ll need to have your boiler inspected by a Gas Safe-registered engineer. We recommend arranging this prior to opening for business.
General Data Protection Regulation (GDPR)
B&Bs routinely collect personal information for guests, including names, addresses and card details when taking bookings and payments. This means that the Data Protection Act of 2018 will apply to you. Under data protection laws (known as GDPR in the UK), you are responsible for keeping this data safe.
TV licence
If you provide TVs in guest rooms, ensure you have the correct TV licence coverage. Instead, you’ll need the “hotel and mobile units television licence”. This covers up to 15 televisions and can be purchased online from TV Licensing.
Home insurance
If it’s your own home you’re transforming into a B&B, standard home insurance won’t cover business activities. Instead, you should consider arranging business cover. Always contact your home insurer to tell them you are using your house as a B&B.
Are bed and breakfasts profitable?
While a bed and breakfast may not deliver quick returns, it could provide a stable income and rewarding work for owners. There is no guarantee you will make a profit quickly, and profitability may vary depending on location, pricing, occupancy, cost control, and how effectively you market your property.
B&Bs in popular tourist destinations or city centres can often achieve higher occupancy rates and room prices, which can help to improve profit margins. From a guest's perspective, a well-run B&B can be more comfortable than a hotel, offering a home-from-home experience.
How can I make sure my bed and breakfast attracts customers and makes money?
Good B&Bs combine comfort, personal service, and thoughtful details that make guests feel at home. Great ones impress customers so much that they’re inclined to come back time after time. Here are some key strategies to help you draw in customers and keep them coming back:
Invest in high-quality images and video
It’s essential for a hospitality business to have a strong visual identity that resonates with customers. Professional photos and virtual tours showcase your property and can increase trust. By presenting your property in the best light, you can make a lasting impression on potential guests and increase the likelihood that they will choose your hotel over your competitors.
Simplify your website and booking process
A professional, user-friendly website with easy booking can increase bookings. Include high-quality images and virtual tours to give prospective customers a feel for their experience with you. Make sure your website is optimised for mobile, as many potential guests book directly from their phones.
Use booking platforms
An online booking system is a great tool for B&Bs to manage reservations made via their website. The main benefit is that your customers can manage their booking online at a time that suits them, saving you time and helping you attract more guests. On the other hand, these benefits should be weighed against the disadvantages, including fees.
What are the biggest challenges, and how can I overcome them?
From slow seasons to rising costs, running a bed and breakfast comes with its challenges, but thinking ahead can help. See the biggest challenges facing hospitality businesses and how businesses can overcome them:
Seasonal fluctuations
Business in the hospitality industry often peaks in summer and during holidays. Fluctuations in demand can directly impact occupancy rates, staffing needs, maintenance costs and how efficient you are in your business, so it’s important to plan offers at the right time and, for off-season months. By looking at market trends, you’ll be able to anticipate peaks and troughs and plan accordingly.
Saturated market - how to stand out?
The hospitality industry is an increasingly competitive market, making it challenging to attract new guests and retain existing customers. One of the key steps you can take to beat the game is to differentiate your B&B by refining your messaging and unique selling points.
To do this, invest in unique experiences, local partnerships, and outstanding hospitality. For B&Bs, improving your curb appeal, investing in high-quality images and videos, simplifying your website and booking process is a great start.
Rising operating costs
You may have to raise your prices to account for rising energy and staffing costs. But this doesn’t have to mean a bleak future for your business. If prices are rising, be honest with your customers and you may find most will be happy to support keeping you open. There are further actions you can take, too. Reviewing your inventory, spending and cash flow to see where savings can be made and waste can be reduced are all great things to do.
Get your bed and breakfast on its feet with help from Bionic
Choosing the right bed and breakfast insurance may help protect your business, depending on your individual circumstances and the cover selected.
With nearly 20 years of experience helping British business owners, the team at Bionic is here to help you compare, switch and renew business energy, insurance, broadband and more. We work with a panel of regulated suppliers and providers to help you find options that are right for your unique business needs and requirements. Get support from Bionic today.
