If you are planning to write the Bed and Breakfast business plan on your own, then this sample Bed and Breakfast business plan can be great for guidance. However, if you are looking for a professional business plan writer for a business loan, SBA loan or to find out the possibility of success for your new business then let’s talk!
Executive Summary
Overview: PattysGuestHouse B&B is a pleasant country-style getaway with all the conveniences and luxuries of home. It is 20 kilometers southwest of Penticton. It is situated on the shores of Trout Lake, surrounded by magnificent mountains. The house is located on 1.5 acres of property. It has a private sandy beach, a dock for easy access to the water for swimming or fishing, and a lovely Japanese garden—the ideal setting for a gathering of family and friends. Swimming, fishing, paddle-boating, sunbathing, hiking, or lounging on the beach with your favorite book are available at the B&B. Visit one of the numerous wineries, golf courses, public beaches, observatories, petting zoos, or Apex Mountain in Penticton.
Mission: The mission of Patty’s Guesthouse Bed & Breakfast is for all of our guests to want to come back! To create a welcoming, clean, comfortable, and secure environment for those who visit and stay.
Vision: Service that is exceptional and individualized, surpassing expectations and building a connection to our brand via the experiences we give. And to spread hospitality’s light and love across the world.
Industry Overview: Bed & Breakfasts are a vital component of the hotel business with substantial economic influence in the United States. The B&B sector is estimated to be worth 3.4 billion dollars. There are almost 17,000 inns in the United States. Buildings with historic designations, live-in owners, and smaller sizes (often approximately 5,700 square feet) distinguish the properties from traditional hotels. “In this market, organizations offer short-term accommodation in private houses or small structures converted to hotels; full breakfast is included in the room rate—no big corporations operate in this industry.” According to Euromonitor International, the worldwide hotel business produces around $500 billion in sales each year, including bed and breakfast inns.
Financial Overview:
Financials is one of the most important sections of a Bed and Breakfast business plan. You can get an idea of your projected revenue, required investment amount, is the business sustainable without additional funding, etc.
Financial Highlights:
| Liquidity | 2020A | 2021A | 2022F | 2023F | 2024F |
| Current ratio | 6 | 12 | 23 | 32 | 42 |
| Quick ratio | 6 | 11 | 22 | 31 | 40 |
| DSO | 8 | 8 | 8 | 8 | 8 |
| Solvency | |||||
| Interest coverage ratio | 8.2 | 11.1 | 14.2 | ||
| Debt to asset ratio | 0.01 | 0.01 | 0.2 | 0.18 | 0.16 |
| Profitability | |||||
| Gross profit margin | 51% | 51% | 53% | 53% | 53% |
| EBITDA margin | 12% | 14% | 21% | 22% | 22% |
| Return on asset | 5% | 6% | 13% | 14% | 14% |
| Return on equity | 5% | 6% | 16% | 17% | 17% |
Fund Usage
Industry Analysis
The industry analysis section of the Bed and Breakfast business plan will help you get better insights into competitors, market growth, and overall industry prospects. You can order a custom market research report for your Bed and Breakfast business.
Global growth is fueled by increased travel to growing economies in Asia and Latin America. Asia/Pacific, the Americas, and the Middle East are the world’s biggest markets for international tourist expenditure. About 17,000 establishments (single-location enterprises or units of multi-location organizations) make up the US bed and breakfast (B&B) sector, with the majority being family-owned and run. In the United States, there are roughly 3,000 B&Bs with paid workers, generating about $1 billion in yearly income.
In the United States, the bed and breakfast business is linked to the travel and tourist sector. According to forecasts, industry revenue is expected to be $2.8 billion in 2020. Market segmentation is generally characterized by the booking technique for that overall revenue.
Direct bookings on the property’s website account for around 48% of total income in the industry. • Online travel agencies account for around 26.7 percent of bookings, with older tourists preferring to acquire their information and book directly with the resort. These third-party firms are preferred by younger travelers, who are less brand loyal and like to browse many places at once.
Direct phone reservations account for 22.9 percent of revenue, with older consumers who are more acquainted with a particular hotel and are less inclined to use the internet. Finally, with the travel agency business shrinking, travel agencies produce 2.4 percent of income.
GLOBAL INDUSTRY ANALYSIS
While working on the industry analysis section of the Bed and Breakfast business plan make sure that you add significant number of stats to support your claims and use proper referencing so that your lender can validate the data.
Personal discretionary income determines demand. The occupancy rate and operational efficiency of specific enterprises determine their profitability. Larger B&Bs may have an advantage because they may provide a wider choice of services and rates to accommodate a wide range of traveler budgets. Small businesses may compete successfully in their target markets by providing outstanding customer service. In the United States, the market is highly fragmented, with just around 15% of sales coming from the top 50 businesses. Hotels, motels, extended-stay inns, country inns, RV parks, campsites, and youth hostels compete for overnight accommodations alongside B&Bs.”
Businesses that mainly provide short-term accommodation make up the Bed and Breakfast and Hostel Accommodations sector. This industry does not include hotels, motels, and casino hotels. In 2020, the bed & breakfast and hostel market in the United States was worth 1.37 billion dollars, down from 2.36 billion dollars. The industry is expected to grow to 1.68 billion people in 2021.
Due to lower travel demand due to the COVID-19 (coronavirus) pandemic, the need for Bed and Breakfast and Hostel Accommodations fell in 2020; however, income is predicted to rise rapidly in 2021.
With the penetration of Airbnb listings into the market, this business already has a high level of competition. However, part of the attraction of Airbnb is the homey aspect of the lodging, which is something that bed and breakfasts already give to their customers. Bed and breakfasts must be informed of the pricing that other dwellings charge for their rooms to price or discount their customers. Furthermore, while many major hotel chains provide memberships to travelers, bed and breakfasts should set themselves apart from the competition by offering something unique to the business or the region in which they operate.
Industry demand from foreign clients has slowed dramatically since industry operators supply services to international customers. Because of the coronavirus epidemic, which has hampered downstream demand from consumers, several industry operators have permanently left the sector. The Bed and Breakfast and Hostel Accommodations market has seen moderate growth for most last five years. As the baby-boomer generation approaches retirement age and spends their resources on vacation, demand for all types of travel accommodations surged before the coronavirus arrived. Millennials, compared to baby boomers, are less devoted to a particular kind of hotel and are more inclined to investigate alternatives to standard lodging choices while traveling. This budget-conscious population spurred the expansion of the hostel sector. HOWEVER, the COVID-19 (coronavirus) pandemic caused travel rates to plummet in 2020, hurting industrial demand.
Marketing Plan
A key part of the marketing plan in a Bed and Breakfast business plan is the marketing budget. The growth in the number of customers is proportional to the budget and dependent on the CAC.
Content Marketing: Create a blog on the website with material catering to prospective customers. Content marketing is the development and distribution of relevant, helpful content—blogs, newsletters, white papers, social media posts, emails, videos, and the like—to current and potential customers.
Discounts: Provide multiple rewards or incentives where members get a deal if they successfully recommend someone.
Social Media: Engage and promote on Twitter, publish news on Facebook, and utilize Instagram to promote curated photos of your space and events. Think about if you have a place in your budget for Facebook Marketing or other social media-focused ads.
SEO (Search Engine Optimization) Local SEO makes it easier for local consumers to find out what you have to offer. It creates trust with potential members seeking what your place offers.
Email Marketing: Sending automated in-product and website communications to reach out to consumers at the right time. Remember that if your client or target views your email as really important, they are more likely to forward it or share it with others, so include social media share buttons in every email.
Organogram
Financial Plan
This section of the Bed and Breakfast business plan helps your lender figure out whether you will be able to pay off the loan, whether the business is sustainable, what are the growth prospects, etc.
Earnings:
Break-Even Analysis:
Income Statement:
| 2020A | 2021A | 2022F | 2023F | 2024F | |
| ANNUAL REVENUE | |||||
| Item 1 | 9,217 | 59,117 | 175,410 | 415,277 | 781,357 |
| Item 2 | 34,701 | 222,558 | 660,368 | 1,563,394 | 2,941,580 |
| Item 3 | 4,067 | 19,561 | 46,432 | 78,519 | 114,905 |
| Total annual revenue | 47,985 | 301,236 | 882,211 | 2,057,189 | 3,837,842 |
| % increase | 528% | 193% | 133% | 87% | |
| COST of REVENUE | |||||
| Item 1 | 360 | 2,259 | 6,617 | 15,429 | 28,784 |
| Item 2 | 480 | 3,012 | 8,822 | 20,572 | 38,378 |
| Item 3 | 52,000 | 65,000 | 78,000 | 91,000 | 104,000 |
| Item 4 | 720 | 3,615 | 8,822 | 16,458 | 23,027 |
| Item 5 | 140,000 | 336,000 | 560,000 | 840,000 | 1,120,000 |
| Item 6 | 60,000 | 144,000 | 240,000 | 360,000 | 480,000 |
| Item 7 | 32,000 | 61,333 | 85,533 | 112,153 | 141,435 |
| Total Cost of Revenue | 285,560 | 615,220 | 987,794 | 1,455,612 | 1,935,625 |
| as % of revenue | 595% | 204% | 112% | 71% | 50% |
| Gross Profit | -237,575 | -313,984 | -105,583 | 601,578 | 1,902,218 |
| SELLING & ADMIN EXPENSES | |||||
| Item 1 | 28,000 | 96,800 | 154,880 | 175,692 | 193,261 |
| Item 2 | 75,000 | 105,000 | 120,000 | 120,000 | 120,000 |
| Item 3 | 36,000 | 96,000 | 108,000 | 120,000 | 120,000 |
| Item 4 | 8,000 | 12,000 | 12,000 | 12,000 | 12,000 |
| Item 5 | 3,839 | 18,074 | 44,111 | 61,716 | 115,135 |
| Item 6 | 3,359 | 12,049 | 26,466 | 41,144 | 76,757 |
| Item 7 | 5,600 | 10,000 | 12,904 | 15,034 | 17,376 |
| Item 8 | 6,667 | 14,000 | 22,067 | 30,940 | 40,701 |
| Total selling & admin expenses | 166,464 | 363,924 | 500,428 | 576,525 | 695,230 |
| as % of revenue | 347% | 121% | 57% | 28% | 18% |
| Net profit | -404,039 | -677,907 | -606,011 | 25,052 | 1,206,987 |
| Accumulated net profit | -404,039 | -1,081,947 | -1,687,957 | -1,662,905 | -455,918 |
Cash Flow Statement:
| 2020A | 2021A | 2022F | 2023F | 2024F | |
| CASH FLOW from OPERATING ACTIVITIES | |||||
| Net profit before tax | -$404,039 | -$677,907 | -$606,011 | $25,052 | $1,206,987 |
| Depreciation | $44,267 | $85,333 | $120,504 | $158,127 | $199,512 |
| Payables | |||||
| Item 1 | $4,333 | $5,417 | $6,500 | $7,583 | $8,667 |
| Item 2 | $11,667 | $28,000 | $46,667 | $70,000 | $93,333 |
| Item 3 | $6,250 | $8,750 | $10,000 | $10,000 | $10,000 |
| Item 4 | $3,000 | $8,000 | $9,000 | $10,000 | $10,000 |
| Item 5 | $667 | $1,000 | $1,000 | $1,000 | $1,000 |
| Total payables | $25,917 | $51,167 | $73,167 | $98,583 | $123,000 |
| change in payables | $25,917 | $25,250 | $22,000 | $25,417 | $24,417 |
| Receivables | |||||
| Item 1 | $320 | $1,506 | $3,676 | $5,143 | $9,595 |
| Item 2 | $360 | $1,807 | $4,411 | $8,229 | $11,514 |
| Total receivables | $680 | $3,314 | $8,087 | $13,372 | $21,108 |
| change in receivables | -$680 | -$2,634 | -$4,773 | -$5,285 | -$7,736 |
| Net cash flow from operating activities | -$334,536 | -$569,958 | -$468,280 | $203,311 | $1,423,180 |
| CASH FLOW from INVESTING ACTIVITIES | |||||
| Item 1 | $16,000 | $13,200 | $14,520 | $15,972 | $17,569 |
| Item 2 | $20,000 | $22,000 | $24,200 | $26,620 | $29,282 |
| Item 3 | $28,000 | $22,000 | $14,520 | $10,648 | $11,713 |
| Item 4 | $96,000 | $88,000 | $72,600 | $79,860 | $87,846 |
| Item 5 | $20,000 | $22,000 | $24,200 | $26,620 | $29,282 |
| Net cash flow/ (outflow) from investing activities | -$180,000 | -$167,200 | -$150,040 | -$159,720 | -$175,692 |
| CASH FLOW from FINANCING ACTIVITIES | |||||
| Equity | $400,000 | $440,000 | $484,000 | $532,400 | $585,640 |
| Net cash flow from financing activities | $400,000 | $440,000 | $484,000 | $532,400 | $585,640 |
| Net (decrease)/ increase in cash/ cash equivalents | -$114,536 | -$297,158 | -$134,320 | $575,991 | $1,833,128 |
| Cash and cash equivalents at the beginning of the year | – | -$114,536 | -$411,693 | -$546,014 | $29,978 |
| Cash & cash equivalents at the end of the year | -$114,536 | -$411,693 | -$546,014 | $29,978 | $1,863,105 |
Balance Sheet:
| 2020A | 2021A | 2022F | 2023F | 2024F | |
| NON-CURRENT ASSETS | |||||
| Item 1 | $16,000 | $29,200 | $43,720 | $59,692 | $77,261 |
| Item 2 | $20,000 | $42,000 | $66,200 | $92,820 | $122,102 |
| Item 3 | $28,000 | $50,000 | $64,520 | $75,168 | $86,881 |
| Item 4 | $96,000 | $184,000 | $256,600 | $336,460 | $424,306 |
| Item 5 | $20,000 | $42,000 | $66,200 | $92,820 | $122,102 |
| Total | $180,000 | $347,200 | $497,240 | $656,960 | $832,652 |
| Accumulated depreciation | $44,267 | $129,600 | $250,104 | $408,231 | $607,743 |
| Net non-current assets | $135,733 | $217,600 | $247,136 | $248,729 | $224,909 |
| CURRENT ASSETS | |||||
| Cash | -$114,536 | -$411,693 | -$546,014 | $29,978 | $1,863,105 |
| Accounts receivables | $680 | $3,314 | $8,087 | $13,372 | $21,108 |
| Total current assets | -$113,856 | -$408,380 | -$537,927 | $43,349 | $1,884,214 |
| Total Assets | $21,878 | -$190,780 | -$290,791 | $292,078 | $2,109,122 |
| LIABILITIES | |||||
| Account payables | $25,917 | $51,167 | $73,167 | $98,583 | $123,000 |
| Total liabilities | $25,917 | $51,167 | $73,167 | $98,583 | $123,000 |
| EQUITIES | |||||
| Owner’s equity | $400,000 | $840,000 | $1,324,000 | $1,856,400 | $2,442,040 |
| Accumulated net profit | -$404,039 | -$1,081,947 | -$1,687,957 | -$1,662,905 | -$455,918 |
| Total equities | -$4,039 | -$241,947 | -$363,957 | $193,495 | $1,986,122 |
| Total liabilities & equities | $21,878 | -$190,780 | -$290,791 | $292,078 | $2,109,122 |
