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If you’re on the hunt for a new business opportunity and are keen to explore the worlds of tourism and hospitality, you should give serious consideration to starting a bed and breakfast. The Bed and Breakfast Association reckons the UK’s bed and breakfasts (B&Bs) generate some £2 billion a year in revenue, helping the B&B industry to overtake budget hotels in terms of income.
Tourism is one of the UK’s healthiest and most lucrative commercial industries. According to Visit Britain, the UK’s tourism sector will be worth over £257 billion by 2025 – which is just under 10% of the UK’s total income and will support almost 3.8 million jobs across the country. But you don’t need to join a multinational hotel chain or set up an amusem*nt park to capitalise on the UK’s booming tourist footfall. All it takes is a couple of spare rooms.
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So, why are B&Bs making more money when compared with established hotels? Simply put, customers prefer them. According to researchers at TripAdvisor, UK B&Bs are rated 8.8% higher for quality than hotels and bearing in mind that bed and breakfasts tend to provide a far more basic range of services, B&B owners stand to gain a far higher profit margin. After running costs, B&B owners say it’s fairly easy to make a profit margin of up to 60%.
So, do you fancy trying your hand at running a bed and breakfast? It can be an incredibly rewarding career in which you get to meet all sorts of people and take pride in offering them a comfortable home away from home – and holidays they’ll never forget.
But the industry can be a little bit tricky to crack at first. That’s why we’ve compiled this Rapid Guide to help walk you through all the basics of starting a bed and breakfast.
- Training and qualifications
- Setting up shop
- Getting insured
- Rules and regulations
- Top tips
Training and qualifications
Unlike many industries, no formal qualifications are needed to set up a bed and breakfast. A college or university degree in catering or hospitality may certainly be advantageous, as they would provide you with strategic insight in terms of starting and expanding your business.
However, the vast majority of tasks and hurdles you’ll need to overcome as part of the B&B industry are fairly straight-forward. Generally speaking – as long as you stay organised and on the ball – you can learn as you go along.
That being said, if you’d like to learn some tricks of the trade from seasoned B&B experts, there are several companies that offer training courses. The Bed and Breakfast Academy provides a range of learning opportunities and short courses centred on teaching newcomers how to establish, market, and operate a successful bed and breakfast business. The Academy offers both online courses, as well as classroom opportunities.
If you’re more interested in learning about the industry at your leisure, B and B Training offers various super-affordable eBooks on different topics for individuals looking to join the B&B sector.
See also: An essential checklist for business startups
It’s worth emphasising that any courses or educational material you take on board that’s specific to the bed and breakfast industry is not necessarily certified or recognised by officials. These courses are for your benefit only – although successful completion could also enable you to demonstrate to consumers and potential clients that you have made a commitment to providing a superior service.
More practically, as a bed and breakfast owner, you will most likely need to undergo some form of food hygiene training.
As the name might suggest, bed and breakfast owners tend to cook breakfast for their guests – perhaps other meals too. In order to do that, you or your kitchen staff should obtain a food hygiene certificate from the UK Government’s Food Standards Agency. Although not all food handlers are legally obliged to obtain a certificate in order to prepare food, all of your kitchen processes and safety mechanisms must be kept to a government minimum standard. If you fail to meet those standards, you could end up landing your business in a lot of trouble.
That’s why it’s worth checking with your local authority to find out if they offer any formal training courses to guide your kitchen rules and train any staff (if you choose to take on staff).
Beyond formal qualifications or optional training, you will definitely need a certain set of skills if you want your bed and breakfast to succeed. For example, you need to be a people person – as you’ll be surrounded by strangers and new people all the time. You’ll also need fantastic customer service skills and be willing to go the extra mile to make your guests feel comfortable and happy.
Because you’re going it alone and won’t have the type of support a huge hotel chain might be able to call upon, you’ll also need to be competent at DIY and maintenance, cleaning, and enjoy cooking. If these are the sort of skills you possess, you shouldn’t have a problem finding your place in the B&B industry.
Setting up shop
Once you’re happy with your knowledge of the B&B sector and exactly what it is you’re getting into, you will need to have a serious think about how you’ll enter the business.
Are you going to utilise existing space in your home as part of your new bed and breakfast? Are you planning to buy an existing B&B business that’s currently up for sale, or do you want to purchase a new building for the purpose of launching a B&B? Each option comes hand-in-hand with a unique set of advantages and disadvantages.
If you choose to turn your home into a bed and breakfast, you may need to complete renovations in order to make your home fit for its new dual purpose. In this day and age, most of your guests will expect any bedrooms they rent to include an en-suite bathroom. Likewise, you will need to offer shared space for guests to enjoy outside their rooms – and you may not necessarily want that space to be a heavily-used family room if you have a large family still occupying your home.
Any alterations will require council planning permission, and building changes will need to comply with fire and safety regulations – but we’ll get to that in a minute. It’s just important that you complete an in-depth assessment of your home, the space you have to work with, your budget, and your potential for any building work you may want to complete for the benefit of your business. If major renovations are required, your start-up costs could be pretty high – although after your business has become established, you’ll save money on overheads by running your business from the comfort of your own home.
Buying an established B&B that’s up for sale is often the most hassle-free option of setting up shop, as the entire building should already be fit-for-purpose in terms of structure, and will hopefully already have a functional business plan and existing client base. That being said, purchasing a B&B will ordinarily be costlier than simply transforming your own home into a building fit for multiple occupancies.
If you’re keen to purchase an existing B&B, there are plenty of online business transfer platforms where you can browse current listings.
See also: If you’re starting a new business – here’s how NOT to fail
Likewise, if you’re interested in purchasing a new property and transforming it into a guest house, the world is your oyster in terms of opportunities. Just make sure you enter a property with your B&B wish list and a clear idea of what you’ll need to do in order to make that building a successful guest house.
After sorting out your premises, you will also want to think about another crucial element of setting up your new B&B enterprise: registering your business as a limited company.
Why form a limited company? Simply put, it will protect you from running into financial trouble if your business doesn’t pan out quite the way you’re hoping.
When forming a limited company, your B&B will become its own distinct entity in legal terms. This means that you will be granted what’s called “limited liability”, which means you can only be held liable for company debts up to the value of your shares in your company. And as most shares are generally given a low nominal value, your personal finances will be kept safe if your bed and breakfast generates unsustainable debts.
If you’re keen on learning more information about limited companies and why you should think about setting one up for your B&B business,consult our blog.
Depending upon the size of your new B&B business, you may also want to think about taking on staff. Generally speaking, B&Bs with more than four guest rooms typically require some form of additional help. Staff may include cleaners, cooks, administrators, maintenance, or anything in between – on either a full-time or part-time basis.
But if you do plan on taking on any staff members, you will have a set of basic regulations you’ll need to follow as an employer. The UK Government website offers comprehensive guidance on employment rules and all the legal obligations you’ll be expected to adhere to if you pay anyone to carry out work at your new establishment.
Getting insured
Just like any other business owner, if you’re starting a bed and breakfast, you will need to think long and hard about the type of insurance coverage you choose to invest in. After all, by opting for comprehensive business insurance coverage, you’ll be able to both protect your investment and offer your guests a safe and brilliant holiday experience.
So, what types of coverage should you consider as part of your new B&B business?
First and foremost, you’ll need buildings insurance. This will cover the structure of your property against all sorts of incidents, including fires, flooding, burst pipes, subsidence or any type of storm damage. Depending on the type of work and reasoning behind it, buildings insurance can also help you to pay for major repairs or building works your property may need.
Second, you’ll want contents insurance. Contents insurance protects anything inside your property that isn’t a part of the structure itself – like furniture, televisions, carpets or artwork. Most providers also offer accidental damage add-ons that will protect these items from guests who aren’t as careful with them as you might be.
Because your B&B is a business, you may also want to explore public liability insurance. This will cover you against any legal costs and associated expenses if anybody gets injured or falls ill as a result of staying at your bed and breakfast. Likewise, employers’ liability insurance will help you to protect your staff if you’ve chosen to employ anyone to work at your B&B.
Finally, you may want to think about investing in legal expenses cover. This will help you to pay any legal expenses if you have a serious dispute with any of your guests.
In the UK, a huge number of providers offer most (or even all) of these coverage types under one umbrella package called “guest house insurance”. Before taking out a major policy like this, you should do your research and have a serious think about what it is your business will require. To help you out, comparison sites like Confused.com or comparethemarket.com might be able to help you sift through the sea of providers to help you land the coverage that’s perfect for your business.
Rules and regulations
If you choose to open a B&B, you will not need any specific licences. However, there are several types of activities you may end up carrying out at your B&B that will require licenses – not to mention the following of stringent regulations.
When in doubt, you should always get in touch with your local authority to make sure you’re staying on the right side of the law concerning your business activities. Yet by and large, these are the regulations and licenses you will need to take on board:
A fire risk assessment
The UK Government requires all B&Bs to carry out a fire risk assessment. This rule has been in effect since 2006 via the Regulatory Reform (Fire Safety) Order 2005, and enables you to discover and catalogue any potential fire hazards for the protection of your guests, employees, and family. You’re legally obligated to note any hazards and keep them in your records.
A TV Licence
Are you going to provide televisions in your guest bedrooms? You will need to upgrade your TV License. Rather than a standard licence, you’ll need a “hotel and mobile units television licence”. This covers up to 15 televisions and can be purchased online.
Phonographic Performance Licence
Are you considering playing music for your guests? You’ll need to apply for a Phonographic Performance Licence (PPL).
A non-theatrical film licence
If you plan on screening films for your guests or launching a DVD rental service as part of your B&B, you’ll need a licence. The UK Government offers advice on its website, including a list of companies you can obtain this licence from.
An Alcohol Licence
Are you going to serve alcohol at your B&B? Even if you’re offering your guests a single, complimentary glass of champagne upon arrival, you will need to apply for a personal and a premise alcohol licence. These can be time-consuming to obtain, and so if you’d like to serve alcohol at your establishment, you should start the application process now.
That lit is by no means exhaustive. To ensure all of your guests are treated fairly, you will also need to comply with the Code of Practice set out by the Equality and Human Rights Commission. This could require you to make reasonable changes to your property, such as adding an entry ramp or handles.
See also: Do I need business insurance when I set up a company?
You’ll also be obliged to follow UK Government rules on smoking. Smoking has been banned in public places since 2007 – and believe it or not, this applies to your home if you decide to turn it into a B&B. You cannot let guests smoke in communal areas, which include hallways, living rooms or dining spaces.
Finally, if you’ve incorporated your B&B as a limited company, you will be required to follow several crucial regulations and legal obligations in terms of reporting changes to Companies House and HMRC.
Top tips
Just like any other type of business, no two bed and breakfasts are alike. What works for one B&B owner might not necessarily suit your business and the type of work you plan to carry out. That being said, there are a few key pieces of advice that ring true for all B&Bs – no matter where they are or who’s running them.
That’s why we’ve rounded up these five top tips to help you succeed as a B&B owner:
Take advantage of platforms like Trip Advisor
As a bed and breakfast, word-of-mouth and customer referrals are your primary marketing weapon. Encourage your guests to review your B&B on platforms like Trip Advisor so that web users from all over the globe will read about great experiences at your B&B.
Plug into the local tourism network
Does your local town or county have a tourism office? If so, print out some collateral and make sure your brochures or fliers are available at area information points. This is a fantastic way to introduce your property as a potential accommodation opportunity for people who are new to your area.
Use local produce
People love to eat meat and produce that’s local to the area in which they’re visiting. If you can, try to source ingredients for breakfast or any other meal you provide from local farms, growers or butchers. Customers will love the genuine area experience.
Write terms and conditions
Like any other business, you need to protect your business by writing terms and conditions for your customers to adhere to. Likewise, you should draft a cancellation policy and clearly communicate this to your customers. That way, you’ll both be protected.
Nominate yourself for an award
Want your B&B to stand out? Apply for a national award and showcase your business on the international stage. There are loads of organisations and companies that sponsor B&B specific awards.
So, we’ve given you all of the basic facts you will need to obtain optional qualifications, set up shop, look around for the insurance coverage you’ll need, and tips to help you succeed. But there’s plenty more to think about when developing your business – and we’re always happy to help.
If you have any questions, our knowledgeable team members are always on standby to offer you assistance. Simply get in touch by tweeting us at our Twitter handle@RapidUKOfficialand via ourFacebook Page.
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