Opening a bed and breakfast is a major commitment which requires extensive planning. It is essential to look to the long term and carefully consider the upfront cost of starting the business. It could take a few years before you break even, but with a successful plan and a quality business offering great facilities, you have the potential to achieve great success in time.
When starting out you need to be completely clear on the amount you will need to invest. Insurer Direct Line researched the matter and found that B&Bs are typically valued at Â£4.49 per Â£1 they generate in turnover. You’ll be acquiring a lot of assets right from the off, including the property itself, the furnishings, electronics and a website. These costs can seem daunting, but you should always keep in mind that many of them will provide long term value. Some of the assets will have a good sell-on value too, particularly the property itself.
There are a number of ways to acquire the necessary finance to start the business. If you already own a suitable property, you are in a favourable position and could look to remortgage to unlock funds. By taking this option, you could gain a sizeable amount with small interest rates over a long term. There are a number of lenders that specialise in financing bed and breakfasts because the property will offer security, especially if it is in a valued area.
Gaining funding, whether it is a mortgage or a business loan, will hinge on the strength of your business plan. This needs to be well formed, detailed and show exactly what sets your establishment apart and will make it attractive to guests. The industry is highly competitive so it is essential to meet the needs of visitors. This means you’ll need to look at the market and decide how best you can satisfy them and get their business.
At Stewart Hindley and Partners LLP we are committed to helping clients who need help understanding and planning their bed and breakfast, hotel or marine finance. Our brokers will browse the whole market to help people find the right solution for them. We will also provide details about loan structures and offer our professional advice. Simply contact us for access to a great resource.