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Bed and Breakfast Business Plan

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:

Bed and Breakfast business plan 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:

Current ratio612233242
Quick ratio611223140
Interest coverage ratio8.211.114.2
Debt to asset ratio0.
Gross profit margin51%51%53%53%53%
EBITDA margin12%14%21%22%22%
Return on asset5%6%13%14%14%
Return on equity5%6%16%17%17%

Fund Usage

Bed and Breakfast Business Plan investment Capex

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.


Bed and Breakfast business plan 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.

Bed and Breakfast Business Plan Industry Analysis

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.

Bed and Breakfast business plan promotional budget

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.


Bed and Breakfast business plan 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.


Bed and Breakfast Business Plan Financial Plan

Break-Even Analysis:

Bed and Breakfast business plan financial plan

Income Statement:

Item 19,21759,117175,410415,277781,357
Item 234,701222,558660,3681,563,3942,941,580
Item 34,06719,56146,43278,519114,905
Total annual revenue47,985301,236882,2112,057,1893,837,842
% increase528%193%133%87%
Item 13602,2596,61715,42928,784
Item 24803,0128,82220,57238,378
Item 352,00065,00078,00091,000104,000
Item 47203,6158,82216,45823,027
Item 5140,000336,000560,000840,0001,120,000
Item 660,000144,000240,000360,000480,000
Item 732,00061,33385,533112,153141,435
Total Cost of Revenue285,560615,220987,7941,455,6121,935,625
as % of revenue595%204%112%71%50%
Gross Profit-237,575-313,984-105,583601,5781,902,218
Item 128,00096,800154,880175,692193,261
Item 275,000105,000120,000120,000120,000
Item 336,00096,000108,000120,000120,000
Item 48,00012,00012,00012,00012,000
Item 53,83918,07444,11161,716115,135
Item 63,35912,04926,46641,14476,757
Item 75,60010,00012,90415,03417,376
Item 86,66714,00022,06730,94040,701
Total selling & admin expenses166,464363,924500,428576,525695,230
as % of revenue347%121%57%28%18%
Net profit-404,039-677,907-606,01125,0521,206,987
Accumulated net profit-404,039-1,081,947-1,687,957-1,662,905-455,918

Cash Flow Statement:

Net profit before tax-$404,039-$677,907-$606,011$25,052$1,206,987
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
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
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
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: 

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
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
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
Account payables$25,917$51,167$73,167$98,583$123,000
Total liabilities$25,917$51,167$73,167$98,583$123,000
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