Like the rest of the world, the American workforce has been shaken to its core in 2020. Once thriving small businesses are being forced to board up, employees who once commuted to and traveled for work are indefinitely staying at home, and using hard-earned vacation time for exotic destinations has become a distant memory. One of the worst parts about the whole mess is that nobody has a real idea about how long it will last.
As depressing as it all sounds (sorry about that), new developments have made life a little easier. While the world is still very much on lockdown, certain previously super-tight restrictions are being somewhat relaxed. Schools and businesses are opening their doors again with new health requirements, and, little by little, the world is cautiously allowing visitors from other countries. Although it’s not a rapid-fire process, it is an encouraging one — and can also mean good things for your own career.
In the year of turbulence and change to the workforce, what better time to focus on what makes you the happiest? Opening a bed and breakfast might seem crazy in a time like this, but think about the reasons why it’s perfectly sane: You or your partner may have made a job shift this year already thanks to the virus; the economy is slowly beginning to rebuild from the inside; and, most enticingly, more people are choosing to stay local if they choose to travel. If you have always wanted to make the career change of your dreams but haven’t been brave enough to do it, now’s your sign to leap. Here are our top tips for investing in a bed and breakfast.
Don’t Dive In Without a Plan
As exciting as the idea of becoming an entrepreneur is, remember that you can’t just barrel into such a huge endeavor without a plan of some sort. There are a thousand questions you need to ask and answer before you can start handing room keys out to guests. Sit down and come up with a business plan; you might consider finding legal help to get you through this part since business lawyers went to school for situations exactly like yours.
If you’d rather focus on a business plan on your own, create a rough outline. This is not a moment of dreaming about color schemes and what kind of curtains to hang in the lobby, but a very real and level headed meeting with yourself about how you can accomplish your goal. Some questions you need to ask yourself include:
- Where will I open my business? This is perhaps the most important question of them all. In what kind of location will your business be located? We’re not talking about the actual landscape (although that’s a factor too), but rather the market. If you are thinking about opening a bed and breakfast in a well-traveled tourist area, examine the competition. Is the market saturated with similar establishments, or would yours be a unique stand-out against the other hospitality choices? Contrarily, is your desired location a ghost town with no regular travelers? If so, reconsider your location. Remember, you want to attract as many people as possible. If your location has little to no regular travelers, would a bed and breakfast really be a wise investment in that area?
- Who is my target audience? Again, your location will play heavily into your target audience. Does the area consist mostly of empty nesters and retirees, is it a bustling college town with young students looking for fun, or is it mostly populated with families looking for a break from the normal? Look closely at the sort of clientele you can expect to see the most often so that you can market appropriately. Which, interestingly, brings us nicely to our next question…
- What will my brand strategy be? Once you have an idea about the sort of audience to expect, you can start thinking about how you want to represent your business. A brand strategy is not a shiny logo or catchy slogan; rather, your brand strategy is more centered on your company culture. How will you represent your establishment to the public? What are your core values, beliefs, ideals? These might not mean much to you right now, but when you’re attracting visitors, it means more than you could ever know.
- When do I want to have my business open and what are my long-term plans? Anybody can say that they want to open a bed and breakfast, but having a strict timeline and sticking to it is what will make the biggest difference. By forcing yourself to be disciplined and follow a schedule, you will simultaneously force yourself to get things done. On the same token, having a strict deadline will also help to guide your steps. If you want your establishment opened by Mother’s Day of next year, for example, you need to get moving and figure out what it will take to meet that goal.
- How do I fund this endeavor? Ah, the million-dollar question (no pun intended). Opening a business costs money, and something as ambitious as a bed and breakfast will definitely take a pretty penny to make a reality. Look at your financing options and make a decision that makes the most sense to you; do you have cash squirreled away somewhere, can you take out a loan, etc? If you have a financial advisor, this would be the best possible time to pick their brain and get some questions answered.
A business plan is not just a vision board to help you follow your dreams; rather, a business plan is the document that will help kick your booty along and keep your motivated to keep the process going. As we mentioned, anyone can say they want to open a bed and breakfast — the difference with you is that you have the drive, motivation, and most importantly, a solid plan to help you get it started.
Clean Up Your Credit Score
American high schools really need to do a better job about drilling this into students’ heads: YOUR CREDIT SCORE IS EVERYTHING. It helps you get a better deal and lower interest rates on big-ticket purchases (funding for appliances, vehicles, etc), you have a better chance of qualifying for good credit cards like American Express/Capital One, and, perhaps most importantly, it helps you to qualify for a home or business loan. If a cash property purchase is not in the cards for you (and don’t feel bad if that’s the case; 62.9% of Americans are in the same boat), then a business loan is the next logical step for your bed and breakfast.
If your credit score is in less than stellar condition, there’s no need to beat yourself up about it; this only means that you will take a little longer to qualify for a loan. Cleaning up a dirty credit score is no easy task, but the time and energy that you take in doing so is absolutely worth it. If you have no idea where to start, here are a few pointers:
- Get current on all of your bills. We know this is the hardest piece of advice of all of them, but it will ultimately do you the most good. Prioritize your bills in order of importance and pay them as quickly as you can.
- Contact your creditors and try to work out a different plan than your current one. Although certain debtors lock you into your monthly payment with no margin for change, others are willing to work with you. Speak to a representative and, as kindly as you can, explain your hardships. Ask if there’s any way that you can work out another payment, a lower interest rate, anything to help you out. It doesn’t always work, but you know what they say about catching more flies with honey than vinegar.
- Gain access to your credit score and look over it with a fine-tooth comb. If you catch an error — even a small one like your name misspelled — then this is absolutely grounds for dispute. If you write a goodwill or a notification letter to the credit companies, anything erroneous will be sponged away and your credit score can instantly improve. You can subscribe to credit monitoring services like ScoreSense and FICO Advanced, but those will charge you a monthly fee. For free services, look into freecreditreport.com, the Federal Trade Commission, and freecrditscoreonline.com. You can usually only gain monthly access to your reports instead of on-demand access, but they are invaluable nonetheless.
Is rebuilding your credit easy? No, not in the slightest. But when you’re standing in your freshly minted bed and breakfast, happily gazing at your dream come true, it’s worth the hard work. It takes hard work to rebuild a struggling credit score, but the rewards are worth it in the end.
Find the Right Agent to Work With
Once you’ve figured out your financing options, it’s time for the fun part: Finding an actual property to use as your bed and breakfast! You’ve already done the research, like knowing that the average bed and breakfast has 8.5 rooms with attached private bathrooms, but now you need to find the proper location. You can do this on your own, but having a dedicated real estate agent on your side can help you through the process much more easily. Real estate agents know the business inside and out, plus they have an insider’s knowledge into negotiating and networking with other people in the industry, as well as niche skills like real estate photography and the oh-so-subtle art of schmoozing.
Although it’s certainly an option for you to go through the process by yourself, ask yourself if it’s worth it. If there was an issue during the deal, would you feel comfortable dealing with real estate lawyers and legal jargon? What about financing problems, would you be able to settle all of it on your own? Even though it’s an added expense, it’s worth finding the right agent to help you find your dream bed and breakfast. These people are pros in their industry and understand the ins and outs, making them the perfect companions for the task at hand.
Hire a Maintenance Crew
Regardless of what kind of building you end up purchasing, remember that you will need a maintenance team to help you with the upkeep. Whether you’re renovating an existing bed and breakfast or are gutting another building to make one from scratch, there will be some heavy lifting.
A handy tip to help you is to find a real estate property management team. This is a squad of professionals that can help with everything from preventive maintenance to HVAC services and heating repairs. Ask your real estate agent for recommendations; oftentimes they have a list of names from previous happy clients.
If your agent doesn’t have anyone they recommend, it’s on you to find your own maintenance crew. It can be tough, especially if you’re (rightfully) picky about who works on your bed and breakfast, but don’t despair. Look online for local contractors, making sure to read user reviews. Don’t rely on only one website’s reviews, though; look everywhere from Angie’s List to Google Reviews to Yelp. If you see a pattern of the same complaints across the different platforms, this could be a red flag. Contrarily, if you see a pattern of positive words, this could be a green flag. The vetting process is in your hands, so be careful and choosy when you’re finding someone.
It’s a TON of work to make a dream come true, and if your dream is to open a bed and breakfast, then the work never really stops. In a world that has more stay-cations than vacations these days, a bed and breakfast could be just a niche business for you and prospective clients. Ensure that you’ve got a solid business plan in place, along with a team of professionals to help you fund, find, and maintain your endeavor. Nobody said that it would be easy — but everyone says it will be worth it.