Bed and Breakfast Business Plan Template
If you want to start a Bed and Breakfast business or expand your current Bed and Breakfast, you need a business plan.
The following Bed and Breakfast business plan template gives you the key elements to include in a winning B&B business plan.
Bed and Breakfast Business Plan Sample
I. Executive Summary
Business Overview
[Company Name], located at [insert location here] is a new, small Bed and Breakfast focused on providing rooms with a clean and modern character that is attractive to leisure visitors to the area. The Company’s rooms will feature modern furniture, high-end technology and modern accessories.
Services
[Company Name] will offer all the standard Bed and Breakfast services including daily room cleaning, free local calls, cable TV, a free wireless network and various other amenities. Additionally, the Bed and Breakfast will include a restaurant lounge serving breakfast, lunch and dinner, as well as Afternoon Tea and Cocktails.
Customer Focus
[Company Name] will primarily serve leisure travelers who seek comfort, necessary amenities, and simplicity of services. In general, the market for the bed and breakfast segment tends to be relatively affluent and well-educated.
- The single largest segment which uses bed and breakfasts are guests on vacations/pleasure trips. These tend to be short, weekend breaks to relieve work-related stress. Special events, such as weddings, are important revenue drivers.
- Group travel and business meetings/seminars are important revenue drivers during weekdays and increasingly access points at a central point or in rooms, to attract this latter market.
- 150,000 visitors to the area in according to Madison Office of Tourism
- 55% between ages of 40 and 49, 16% 18 to 29, 18% 50-59, 10% 60+according to National Household Survey of Travel
- Average household income of $85,900 according to the American Bed and Breakfast Association
Management Team
[Company Name] is led by [Founder’s Name] who has been in the Bed and Breakfast industry for 20 years. While [Founder] has never developed a Bed and Breakfast from the ground up, he has worked in Bed and Breakfast industry most recently as a general manager, and has held various different positions in the management chain over the last 20 years. As such [Founder] has an in-depth knowledge of the Bed and Breakfast business including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).
Success Factors
[Company Name] is uniquely qualified to succeed due to the following reasons:
- There is currently no Bed and Breakfast in the community we are entering. In addition, we have surveyed the area and determined that they have frequent visitors who would use our Bed and Breakfast location when launched.
- Our location is central to the downtown, airport, tourist attractions and corporate district of the city.
- The management team has a track record of success in the Bed and Breakfast industry.
- The city announced plans to invest over $1 billion in tourist attractions over the next two years and existing hotels will not be able to handle the increased capacity of visitors traveling to the city.
Financial Highlights
[Company Name] is currently seeking $3,000,000 to launch. Specifically, these funds will be used as follows:
- Bed and Breakfast design/build: $2,500,000
- Working capital: $500,000 to pay for marketing, salaries, and land costs until [Company Name] reaches break-even.
Topline projections over the next five years are as follows:
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $1,980,125 | $2,832,031 | $3,409,160 | $3,783,447 | $4,100,713 |
| Total Expenses | $1,375,530 | $1,561,763 | $1,866,977 | $2,027,436 | $2,107,349 |
| EBITDA | $604,595 | $1,270,268 | $152,183 | $1,756,011 | $1,993,364 |
| Depreciation | $372,760 | $372,760 | $372,760 | $372,760 | $372,760 |
| EBIT | $231,835 | $897,508 | $1,169,423 | $1,383,251 | $1,620,604 |
| Interest | $164,782 | $144,184 | $123,586 | $102,988 | $82,391 |
| Pre-Tax Income | $67,054 | $753,324 | $1,045,837 | $1,280,263 | $1,538,213 |
| Income Tax Expense | $23,469 | $263,663 | $366,043 | $448,092 | $538,375 |
| Net Income | $43,585 | $489,661 | $679,794 | $832,171 | $999,839 |
II. Company Overview
Who is [Company Name]?
[Company Name], located at [insert location here], is a new, small Bed and Breakfast focused on providing rooms with a clean and modern character that is attractive to visitors to the area. The Company’s rooms will feature modern furniture, high-end technology and modern accessories.
[Company Name] was founded by [Founder’s Name]. While [Founder’s Name] has been in the Bed and Breakfast industry for some time, it was in [month, date] that he decided to launch [Company Name]. Specifically, during this time, [Founder] took a business trip to Madison, WI. During his trip, [Founder’s Name] could not find a mid-level, Bed and Breakfast in the downtown area. After several visiting the Bed and Breakfast options in the city and learning of the expected growth in travel to Madison, [Founder’s Name] clearly recognized an opportunity that a Bed and Breakfast would enjoy significant success in this area.
Specifically, the local demographics, business demographics and competitive situations in the Madison location were so favorable to the success of this Bed and Breakfast idea that he knew it would work.
[Company Name]’s History
Upon returning from Madison, surveying the local customer base and online market, estimating travel growth, and finding a potential Bed and Breakfast location, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].
The Bed and Breakfast development operations are currently being run out of [Founder’s Name] home office. Once the land rights have been purchased, operations will be run from an on-site location to ensure that every detail is being thought out and completed.
Since incorporation, the company has achieved the following milestones:
- Found site location and signed the land deed purchasing rights to the land.
- Developed the company’s name, logo and website located at www…
- Hired an architecture firm to create a blueprint of the Bed and Breakfast
- Taking bids from construction crews and electrical engineering firms
- Determined equipment leasing and financing requirements
- Began recruiting key employees with experience in the Bed and Breakfast industry
[Company Name]’s Services
Below is [Company Name]’s initial service offerings and amenities provided.
- Single Rooms
- Studio Apartment Style VIP Rooms for long-term stays
- Restaurant Lounge
- Single Rooms
- Two Double Beds or One Queen Bed
- Workspace
- Modern Bathroom
- Daily Cleaning
- Toiletries
- Complimentary Coffee, Tea, and Chocolate
- TV with Cable
- Wireless Network
- Studio Apartment Style VIP Rooms
- Sitting Room area with Workspace, Couch and TV.
- California King bed
- 1 Luxury Bathroom with Jacuzzi and Shower
- Daily Cleaning
- Toiletries
- Coffee, Tea, and Chocolate
- Fully-equipped kitchenette with oven, microwave, refrigerator, pots, pans, etc.
- Dining area with dining table
- Flat Panel TV
- Wireless Network
- Complimentary Bath Robe, Slipper, and Bathroom Amenities
- Restaurant Lounge
- Breakfast, lunch and dinner offerings
- Cocktails
- Afternoon Tea
- Wireless internet
Bed and Breakfast Design
[Company Name] will develop a 20,000 square foot Bed and Breakfast with key elements that will include the following:
- Upper and Lower Floors with 18 Single rooms
- 2 Studio Apartment Rooms
- Restaurant Lounge
The Bed and Breakfast location will have 15 dedicated parking spots which should suffice even in peak parts of the travel season as guests will often not have cars with them
[Company Name] plans to be open 7 days a week, 24 hours a day, to take care of all guests’ inquiries and issues as they may arise. As demand dictates, we may extend or reduce our services and hours.
III. Industry Analysis
[Company Name] directly or indirectly competes with all Bed and Breakfasts nearby our Bed and Breakfast locations. Competition will come from inns, motels and hotels.
Industry Statistics & Trends
The Bed and Breakfast industry is expected to grow over the next five years. The resurgence of travel rates since the recession is expected to continue, while travel spending is projected to increase over the next five years as the economy improves. Consumer spending is expected to increase 2.4% per year on average over the next five years. IBISWorld estimates that over the same period, international arrivals will increase at an average rate of 4.4% per year, while domestic travel will increase an average of 1.6% per year. The influx of tourist dollars will likely bolster revenue for bed and breakfasts (B&Bs) and hostels. Over the next five years, revenue is forecast to increase an annualized 1.9% to $4.2 billion.
IV. Customer Analysis
Profile of Target Market
[Company Name] will serve the leisure travel market of [Insert location] and its immediate surrounding area.
The market we serve is value-conscious and has a desire for high comfort and basic amenities geared towards the family and comfort travel.
U.S. leisure travelers are more likely to book a trip this year, relying on a new resourcefulness fostered by the belt-tightening times of the Great Recession, according to new findings from a partnership/Harrison Group survey.
The number of domestic trips by US residents has turned the corner since the recession.
- Direct spending on leisure travel by domestic and international travelers totaled $650.8 billion in 2015.
- Spending on leisure travel generated $99.6 billion in tax revenue.
- Nearly 4 out of 5 domestic trips taken are for leisure purposes (79%).
- U.S. residents logged 1.7 billion person‑trips for leisure purposes last year
- Top leisure travel activities for U.S. domestic travelers: (1) visiting relatives; (2) shopping; (3) visiting friends; (4) fine dining; and (5) beaches.
The demographic profile of the target market can be seen below:
| United States | |
|---|---|
| Total Population | 312,796,426 |
| Population Male | 49.00% |
| Population Female | 51.00% |
| Median Age | 37.5 |
| Target Population by Age | |
| Age 18 to 24 | 9.99% |
| Age 25 to 34 | 13.08% |
| Age 35 to 44 | 12.94% |
| Age 45 to 54 | 14.64% |
| Age 55 to 64 | 12.43% |
| Median Household Income | $57,639 |
| Households w/disposable income | |
| Income $50,000 to $74,999 | 18.03% |
| Income $75,000 to $99,999 | 12.97% |
| Income $100,000 to $124,999 | 8.65% |
| Income $125,000 to $149,999 | 5.40% |
| Income $150,000 to $199,999 | 5.12% |
| Income $200,000 and Over | 5.34% |
Customer Segmentation
We will primarily target the following three market segments:
- The U.S. Leisure Travel Market: Travelers to [Insert Area or City] tourist attractions such as the Museum of Fine Art and the Annual Film Festival, as well as visitors to social events such as weddings.
- The U.S. Business Travel Market: Travelers to [Insert Area, City] corporations and events.
- International Tourists: Last year, there were over 903 million international tourist arrivals worldwide, with a growth of 6.6%. International tourist receipts were $856 billion, according to tourismroi.com.
V. Competitive Analysis
Direct & Indirect Competitors
The following Bed and Breakfasts are located within a 10-mile radius of [Company Name], thus providing either direct or indirect competition for customer acquisition:
The Madison Concourse Bed and Breakfast
The Madison Concourse Bed and Breakfast is Madison’s leading Bed and Breakfast and has been in business for 20 years. The Bed and Breakfast offers a wide array of services and amenities that you typically find at a Bed and Breakfast.
The Madison Concourse offers luxury amenities, many of which are not necessary for travelers and charges a high price for those amenities ($200-300 per night). Furthermore, the Bed and Breakfast does not offer a small conference room, only larger meeting spaces. Additionally, this Bed and Breakfast does not offer wireless internet in sleeping rooms.
The Edgewater Bed and Breakfast
The Edgewater Bed and Breakfast has been in business for 15 years. The Edgewater Bed and Breakfast offers a variety of services and amenities all typical of the Bed and Breakfast and hospitality industry.
However, [Company Name] has several advantages over The Breakers Bed and Breakfast including:
- Edgewater is priced at a premium because of its waterfront location
- Edgewater’s rooms are aging and in need of renovation
- Edgewater does not have studio apartment options for long-term stay
- Edgewater does not have meeting space
Doubletree Bed and Breakfast Madison
Doubletree Bed and Breakfast Madison is located four miles to the East of our intended location. Doubletree Bed and Breakfast Madison has been in business for the past 10 years and is part of the Hilton family of Bed and Breakfasts, allowing it to use centralized booking with Hilton and the Hilton loyalty points system.
[Company Name] has several advantages over Doubletree Bed and Breakfast Madison including:
- Doubletree Bed and Breakfast Madison does not have a central downtown location
- Despite the rooms being more modern than most existing, Doubletree Bed and Breakfast Madison is still behind the time with no LCD TVs or Wireless Network.
While we expect that Doubletree Bed and Breakfast Madison will continue to thrive based on the Hilton loyalty program, we expect that more and more customers will frequent [Company Name] based on the value offered for a similar price and more central location.
Competitive Pricing
| Madison Concourse | Edgewater Bed and Breakfast | Doubletree | |
|---|---|---|---|
| King Room | $150-$200 | $200-$225 | $235-$265 |
| Executive suite | $250-$325 | $375-$400 | $325-$400 |
| Family Suite | $350-$425 | $400-$475 | $425-$500 |
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Location: [Company Name]’s location in the downtown area, gives the best access to the airport, tourist attractions, corporate center, downtown, shopping and restaurants. The Company also offers adequate parking making it easy for customers to relax upon arrival.
- Business Amenities: WiFi throughout the Bed and Breakfast will make working remotely simple for business visitors.
- Management: Our management team has years of business and marketing experience that allows us to market and serve customers in the same manner as our most sophisticated competitors.
- Relationships: Having visited the community for a number of years, [Founder’s Name] knows all of the local leaders, newspapers and other influences. As such, it will be relatively easy for us to build the brand and awareness of the Bed and Breakfast.
VI. Marketing Plan
The Marketing Plan describes the type of brand [Company Name] seeks to create and the Company’s planned promotions and pricing strategies.
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
- Offering rooms suited for families and business travelers and services
- Offering a central location in the downtown area
- Providing excellent customer service
Promotions Strategy
[Company Name] expects its target market to leisure travelers mainly from the U.S and surrounding locations in the Midwest. The Company’s promotions strategy to reach these individuals includes:
Phone Prospecting
[Company Name] will assign salespeople to contact area corporations to arrange for bulk corporate rates for their visitors depending on the volume of visitors they will have.
Public Relations
We will contact all local and regional area newspapers and television stations to tell them about the Bed and Breakfast opening and unique value proposition of [Company Name].
Advertising
[Company Name] will initially advertise on travel websites, which are frequently being used these days to book travel due to their ease of use and reviews.
Ongoing Customer Communications
[Company Name] will maintain a website and publish a monthly email newsletter to tell local corporations and past customers about promotions and events.
Pre-Opening Events
Before opening the Bed and Breakfast, [Company Name] will organize pre-opening events designed for prospective national customers, local customers and press contacts. These events will create buzz and awareness for [Company Name] in the area.
Pricing Strategy
[Company Name]’s pricing will fluctuate based on the season and occupancy percentages using a computerized yield management system, but pricing will always place the Bed and Breakfast in the mid-range, below luxury offerings and above Bed and Breakfasts and motels in the area. Customers will feel they receive great value when patronizing the Bed and Breakfast.
VII. Operations Plan
Functional Roles
In order to execute on [Company Name]’s business model, the Company needs to perform many functions including the following:
Administrative Functions
- General & Administrative functions including legal, marketing, bookkeeping, etc.
- Sourcing and storing supplies for the Bed and Breakfast and conference space
- Hiring and training staff
- Corporate sales to individuals and groups
Bed and Breakfast Services
- Housekeeping
- Check-in focused on customer service
- Janitor/maintenance personnel to keep the Bed and Breakfast clean and in working order
Milestones
[Company Name] expects to achieve the following milestones in the following [] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize Land Rights |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Launch [Company Name] |
| [Date 5] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is led by [Founder’s Name] who has been in the Bed and Breakfast industry for 20 years.
While [Founder] has never developed a Bed and Breakfast from the ground up, he has worked in the Bed and Breakfast industry most recently as a general manager, and has held various different positions in the management chain over the last 20 years. As such [Founder] has in-depth knowledge of the Bed and Breakfast business including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).
[Founder] has also worked real estate consultant on a part-time basis over the past 10 years. Specifically, he has worked in contracting positions to help real estate developers with their Bed and Breakfast launch plans as well as their operations plans once the Bed and Breakfast has been launched.
[Founder] graduated from the University of ABC where he majored in Bed and Breakfast and Restaurant Management.
Hiring Plan
[Founder] will serve as the Bed and Breakfast president. In order to launch our Bed and Breakfast, we need to hire the following personnel:
- Housekeeping staff (5 to start)
- Bed and Breakfast Manager (will manage day to day operations of the Bed and Breakfast)
- Assistant Manager (will manage Bed and Breakfast operations nights and weekends)
- Service Staff (4 full-time to work check-in and guest services – allowing for at least 1 staff person to be on duty at all times)
- Sales Staff (2 full-time) will target and book corporate clients in sleeping rooms and the meeting space
- Legal, Bookkeeping, and other Administrative functions (3 staff)
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s will come from Bed and Breakfast room occupancy and food and beverage.
The major costs for the company will be salaries of the staff and cost to maintain the standard of the Bed and Breakfast. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.
Capital Requirements and Use of Funds
[Company Name] is seeking a total funding of $3,000,000 to launch the Bed and Breakfast. The capital will be used for funding capital expenditures, manpower costs, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Bed and Breakfast design/build: approximately $2,500,000
- Working capital: approximately $500,000 to pay for Marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions & Forecasts
Below please find the key assumptions that went into the financial forecast and a summary of the financial projections over the next five years.
| Date | Milestone |
|---|---|
| [Date 1] | Finalize Land Rights |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Launch [Company Name] |
| [Date 5] | Reach break-even |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
