|
Most guests who visit B&B establishments do so for the home-like atmosphere which offers a unique decor, personalized treatment, and the comforts of home while traveling. Every B&B offers a different experience and you must evaluate your home's resources to determine the unique qualities which will attract guests. Current B&Bs promote their operations with some of the following amenities:
| A scenic view |
Antique furnishings |
| Uniquely decorated rooms |
Fireplaces in bedrooms or common rooms |
| Swimming pool |
Proximity to area attractions |
| Unique menus and services |
Age and historical significance of home |
Seriously consider how well your amenities will meet the potential guest's needs and what
image you should market. Evaluate in writing the potential of your operation by thoroughly
answering the following questions:
- How attractive is your neighborhood?
- How accessible is transportation?
- How close are good restaurants?
- Is the floor plan acceptable to your potential customer market?
- Is the kitchen adequate to support the breakfast production and service?
- Are there enough bathrooms to support the number of rooms?
- Do the water and sewage systems work well?
- Are private quarters possible?
Develop your marketing strategy by summarizing the above points and asking yourself:
- What makes my B&B concept different and better than other lodging options
available to potential customers?
- How will it best serve my guests?
- Does my B&B concept have the potential to become successful?
- How might it grow?
Planning for Development
An initial step in the development process is drafting a business plan. Many business ideas fail
because they were not logically planned. A business plan is the framework upon which all your
business decisions will be based. This includes:
- A basic description of your proposed business
- The related goals and objectives
- How you plan to become successful
A plan defines why you are in business, what your market is, what your strengths and weaknesses
are, and your financial management environment. The plan will help you make insightful business
decisions and inform potential lenders about your business. To develop a business plan, you will
need to review other successful plans which can be found in libraries or can be obtained from the
small business development center in your region
The following areas need special attention and you should understand these thoroughly prior to
starting your plan: occupancy and revenue forecasting, start-up costs and operating expenses.
Occupancy and Revenue Forecasting
Accurately forecasting sales revenue is an extremely difficult task. Even after you have begun
your operation you should continuously review your forecast. Your perception of future revenue is
the guide to expense and operation planning. Actual sales revenues are calculated by multiplying
the number of rooms rented during a given period by the room rate. You must forecast your sales
revenue by predicting the number of rooms you will rent during a future period and multiplying
that number by the room rate. Predicting the number of rooms you will rent is often difficult and
the indicator is the data available on past occupancy in your area.
Occupancy is the measure of the percentage of available rooms that are rented. The Virginia Division
of Tourism, the Bed and Breakfast Association of Virginia, the Virginia Hotel/Motel Association,
and reservation service organizations can supply occupancy information. Occupancy varies with
seasons, holidays, days of the week and the weather. The occupancy rate during your first year will
depend on your market, the uniqueness of your B&B, and the amount of promotional activity you
undertake. Usually the occupancy rates for new B&B operations are roughly 40 percent of the average
occupancy rate of hotels and motels in your area. For example, if the hotels in your area have an
occupancy rate of 60 percent in June, you might have an occupancy rate of 24 percent that month.
However, some rural B&Bs average as low as 10 percent occupancy during the first year. Of course,
there are many variables which can affect this percentage. However, you should adopt a conservative
estimate when planning for your first year.
After estimating your rate for the first year, you should estimate for the second and third years
of operation. The occupancy rate for these years will be affected by word-of-mouth recommendations
and effective marketing. A new B&B should increase its occupancy by over 10 percent per year.
Projected occupancy alone will not allow you to forecast your sales revenue.
To forecast sales revenue you must also determine your room rates. Revenues are generally determined
by multiplying room rates by occupancy. Your rates should consider start-up and operational costs.
Remember, the rate you charge should represent "fair value for the dollar." Additionally, the rates
you set should reflect the amount of expenses you will incur while running your operation.
There are many factors which influence the value of a room. For example, rooms with private baths,
luxurious amenities, excellent location, or in a heavy demand area should have a higher rate.
Lower rates could be charged for rooms that lack private baths or have single beds. The location
and quality of accommodations and services you provide will strongly influence the rates visitors
will be willing to pay.
|
