How to Start Your Own Bed and Breakfast Business
Running a bed & breakfast is a creative endeavour where you can also turn a good profit. Find out how to get started in this article.
What is a Bed and Breakfast?
A Bed & Breakfast business is an accommodation and hospitality service that provides guests to sleep in at your inn, and a full breakfast before they check out.
Differentiate the business
A Bed & Breakfast is a creative profession. Changing markets have dictated and shifted how this industry is required to operate.
The business must fulfil the needs of the consumer, but also required to distinguish from other competitors. This could be by making the accommodation as pleasant and welcoming as possible.
What is a sustainable competitive advantage?
A competitive advantage is a feature within the business that can produce the good or service of equal value at a lower price or in a more desirable fashion. These conditions allow the business to generate more revenue or a superior profit margin compared to the competition.
The more sustainable the competitive advantage, the harder it is for competitors to neutralise the advantage.
Bed and Breakfast on an online marketplace
There are a wide range of technologies available that has changed the way customers connect to the business. E-commerce technologies include the use of websites, promotion and advertising through blogs and social media.
The use of accommodation sharing such Airbnb or another service will target a wider range of customers domestically and internationally. If the business chooses not to adopt e-commerce initially but instead leave it for the long-term, then timing is crucial. The business may find that the other businesses have built stronger customer loyalty by introducing e-commerce at an earlier stage.
Has your business fulfilled all the legal requirements?
This is a checklist of the legal requirements to set up a Bed and Breakfast business:
- Australian Business number (ABN)
- Goods and Services Tax (GST)
- Tax file number (TFN)
- Pay as you go (PAYG) withholding
- Business Name
- Website Domains: if you set up a website, you need to register a domain name.
What’s your business plan?
A business plan is the fundamental framework that a Bed and Breakfast uses to outline goals and details and how the business plans to achieve those goals. The business plan sets a written plan from an operating, financial and marketing perspective.
Regardless of the size of the business, a business plan has three main purposes.
1. Keeping Focus
Firstly, the business plan encompasses the ambitions of the business. It details the vision statements and operational, financial and marketing objectives as well as the personal objectives of the business. The business plan is the foundation of the business as it conveys what the original goals were and the future changes to the business that will affect the primary vision.
2. Attracting Investment
Moreover, finance concerns relate to the business’ start-up costs, variable costs and fixed costs. If the business is required to look for investments, the investors will want to see the business plan. Essentially, the business plan should include revenue and expense projections and the financial viability of the business. Therefore, these details can be answered with a well-structured and detailed business plan.
3. Cultivating Growth
Finally, The business plan should depict prospects and business viability in the areas of operation, finance and marketing. By following the business plan outline, the business can cultivate growth which leads to expansion and forming strategic decisions about further investment in time and resources in future projects.
How do you plan on marketing your business?
Although the business plan has a marketing component within it, the marketing plan is a comprehensive document that outlines all the business activities that are involved in fulfilling specific marketing objectives.
Furthermore, The marketing plan includes a situational analysis (SWOT Analysis), primary and secondary market research, establishing marketing objectives, identifying target markets, developing market strategies and monitoring results.
Thus, the marketing of the business is just as important as the daily operations of the business. In order to start the business, the owner must understand how to reach potential customers which include the demographic and geographic segments.
For further information on starting a business, it may be worth getting in touch with a business lawyer.
Andrew Huynh is a legal intern at Lawpath. He is currently completing a double degree in Business/Law at the University of Technology, Sydney. He is interested in commercial and intellectual property law. He is pursuing study in the legal implications of the disruption of technology.