How to Write a Bed and Breakfast Business Plan

How to Write a Bed and Breakfast Business Plan or Template

The bed-and-breakfast industry is anticipated to enjoy substantial growth over the next several years.  The substantial growth expectations are based on a number of factors. 

For example, the recent pandemic has kept people pretty much homebound for the last several months.  This captivity has led to some elevated need for vacations.  These vacationing needs will inevitably lead to revenues generated for the bed-and-breakfast industry.  Also, the bed-and-breakfast industry may enjoy growth due to the popularity of short-term rentals like Airbnb.  The short-term rental industry has shown customers that vacationing at hotels is not the only option.  From this eye-opening revelation, the bed-and-breakfast industry is also garnering attention as well.  Regardless of why the bed-and-breakfast industry is expected to grow, new competitors are anticipated on entering the marketplace, and entrenched bed-and-breakfast businesses are anticipating possible expansion opportunities.  In either case, having a well-prepared bed-and-breakfast business plan by a professional business plan writer is an excellent first step for either entrepreneurial venture.


Executive Summary for a Bed and Breakfast Business Plan or Template.

The executive summary section for a bed-and-breakfast business plan should almost always start with a problem statement.  In the problem statement, identify the driving reasons why travelers or vacationers may choose a bed-and-breakfast business as compared to a hotel or short-term rental.  For example, some customers appreciate the boutique-style ambiance of a bed-and-breakfast location.  Other vacationers may choose a bed-and-breakfast facility due to its proximity to tourism opportunities like amusement parks, beaches, etc.  Regardless of the main problem which your organization wishes to solve, make sure to succinctly document it in the problem statement.

Company Information and Location.

The company information section for a bed-and-breakfast business plan or bed-and-breakfast business plan template should include specific business information in the first summary paragraph, such as the location of the bed-and-breakfast, the theme of the bed-and-breakfast, and the number of rooms available for rental.  In addition, our bed-and-breakfast business plan writer also suggests the business owners in this industry summarize their types of rooms available in this section.  For example, some bed and breakfast locations offer one and two-bedroom suites, whereas other bed-and-breakfast facilities provide just one uniform room.  Regardless of structure and strategy, make sure to provide the reader with a broad understanding of the rooms available in the segment (6/22).

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Service Description and Competitive Advantages

A bed-and-breakfast business plan service description section should dive deep into the amenities provided at the bed-and-breakfast.  Popular amenities for bed-and-breakfast would be a swimming pool, proximity to a beach or other community attractions, free Wi-Fi, and complimentary breakfast.  By disclosing amenities in the service description section, business owners are able to quickly differentiate the bed-and-breakfast offerings from that of other competitors in the area.  Further, our bed-and-breakfast business plan writer has found that when providing substantial descriptions for amenities helps the business owner fully envision what the bed-and-breakfast will look like in the near future, whether it be at start up or after the expansion for the bed-and-breakfast is complete (6/22).

Target Market for a Bed and Breakfast Business Plan

The target market for a bed-and-breakfast business is usually vacationers to an area.  However, what sets vacationers apart is the reason why they may visit your area.  For example, a bed-and-breakfast entity in the Orlando, Florida area may draw visitors due to the number of theme parks in the region.  As a result, identifying, in detail, the reason for vacationers is a crucial starting point for the target market section of the business plan.  Once the vacationing reasoning is documented appropriately, then provide details showing why vacationers may select your locale based on vacationers’ wants and needs.

Industry research for a Bed and Breakfast Business Plan

The bed-and-breakfast industry research section of a bed and breakfast business plan or template should first start with a review of industry trends and other happenings.  For example, a bed-and-breakfast industry statistic right now would be revenues generated by competitors, which was about $1.8 billion in the last year.  The revenue growth for the bed-and-breakfast industry was -7% in the same timeframe.  However, industry experts anticipate the bed-and-breakfast industry to grow at a 5% annual rate for the next several years.  By providing these basic statistics in your bed-and-breakfast business plan, the business plan writer is able to show a concrete understanding of the industry as a whole.  From this foundation, the bed-and-breakfast business plan writer may then explore other industry-related topics such as average profits, competitor saturation, etc.

Owner and Management Section

In the owner and management section of the bed-and-breakfast business plan, make sure to first introduce and briefly discuss the owner or parent company of the organization.  Next, provide a detailed list of the various positions that may be utilized in your bed-and-breakfast business plan.  For example, common job positions in a bed-and-breakfast business may include housekeeping, front desk, manager, assistant manager, and maintenance.  Finally, make sure to close out this section with a summary job description for each position in vision.  In following the strategy, the business writer is able to help the document reader understand the owner and show a working knowledge of the various positions offered within the company.

Funding Request for a Bed and Breakfast Business Plan

The funding request section for a bed and breakfast business plan should start with specifically stating the dollar amount needed to start your business.  Once a dollar amount needed to start your bed-and-breakfast organization is identified, then follow up this specific dollar amount with categories showing how the funds will be divvied up.  For example, if your organization will build a bed and breakfast, then common categories may include working capital, construction costs, advertising, budget for purchasing land, building materials, and other relevant costs.  Once these categories are identified and dollar amounts allocated, then show the grand total for startup costs at the bottom of the bulleted list.  Also, make sure to have the grand total dollar amount needed for startup operations as the same dollar amount as the top-line dollar amount.  In doing this, bed and breakfast entrepreneurs are able to show, explicitly, the dollar amount needed to start the organization upfront.  However, by breaking the funding into categories, the business owner is able to have some wiggle room and startup cost allocation.

Also, a bed-and-breakfast funding request should break down where the funding will be coming from.  For example, if the business owner will be providing $50,000 in equity financing, make sure to state this dollar amount.  Also, if borrowing from a lending institution is in the cards, then also disclose this fact and disclose a range of interest rates anticipated.  In doing this, the bed-and-breakfast entrepreneur is able to set the reader’s expectations as to the company’s future capital structure.

Financials and Financial Projections for a Bed and Breakfast Business Plan

The financial projection section of the bed-and-breakfast business plan starts with identifying your occupancy rate.  In most instances, a bed-and-breakfast financial model will start with an occupancy rate of approximately 50 to 55%.  Next, make sure to identify in your financial model the total number of rooms available nightly.  Once this is done, then multiply the nightly rooms available by your occupancy rate.  This will be your average number of rooms rented nightly.  Once this is identified, multiply your average number of rooms rented nightly by an average nightly rate.  This will give you your net revenues on a daily basis.  Subtract from your net revenues the average variable cost for your bed-and-breakfast, and the total will be your gross profits.  Once your gross profits are noted, then deduct your fixed costs for your bed-and-breakfast like interest payments, labor, utilities, and marketing.  Once this is done, you now have a basic net profit that you can use and apply growth estimates to construct the rest of your financial model.

Hopefully, these insightful tips and tricks for writing a business plan were helpful.  As always, if you need help with a business plan or financial projections, just send us an email or give us a call. 

Author: Paul Borosky, Doctoral Candidate, MBA., Author

Owner of: Quality Business Plan, and Quality Business Consultant.

Date: 6/25/2022