The "B&B" jogging looks great at 5 pm peaks on the streets of Manhattan during the cold winter. The truth is, it could be a real job. Let me give you a taste of the life of a traditional B&B owner.
Imagine 8pm on Friday in the middle of summer in a beautiful bed and breakfast. You have just finished clearing the dining room, as your guests have recently been immersed in some snacks and drinks. You are tired. It has been a long day. You are about to start preparing dishes that will take you an hour or so, and the phone rings. It's John Smith, the late check-in guest, who was going to check-in at 9 pm. It tells you that it will not be there by 10 pm.
It's 9 pm now, I just finished dishes, and now she is throwing dirty towels into the wash and collecting new towels, replacing the old ones in the bathrooms. This takes you another hour or so. You can check your watch. It is 10 pm, not John Smith. "Where could it be?" You marvel at yourself. You can check the phone for any messages, nothing. At 10:30 pm, the phone rings. It is John Smith. It is on the state park road at exit 117. It should be there in about an hour and a half. At 11 pm, John Smith finally arrived. You can check in and show his room, and at 11:20 pm, you rush to your bedroom to reach the bag because you promised an early ascent, Julie Murphy, you will get fresh coffee and a continental breakfast for her at 6 am. If you are lucky, you have gone out of exhaustion at 11:45 pm and have fallen asleep for more than five hours.
Welcome to a quiet world of B & Bs. Not your usual day, but you get the idea. My point is, managing a B&B is not as easy as you think. However, it can be everything you think it will be as long as your thoughts are based on reality.
Your level of attention to detail, along with your B & B website, can make your B&B a real success or a real nightmare. During the busy B & B season (mainly from May to September in the northeast) you are always on your way. Dictate hours by your guests hours. Late arrivals can make you wake up late, and early climb may require you to wake up at 5 AM.
Frequently asked questions
What constitutes a B&B? Generally anything greater than 5 rooms is considered a hostel and anything less is a B&B.
How do you know if your B&B is successful? 100 nights, one year, full of ability, is a good year.
Can you earn a living running a B&B? In most cases, you'll need about six rooms to make a living. Anything less is just an extra income. If the host wants to earn a living at the B&B, he must open an inn.
What are the biggest problems facing bed and breakfast hosts? In general, it is attention to detail required for a well managed bed and breakfast and last minute cancellation or non-attending guests.
Should the B&B be included with the Reservation Service Agency ("RSA")? If this is your first bed and breakfast place and you're just getting started, the answer is final yes! Here’s why. Good RSA provides a number of valuable services. First of all, they can drive business to your B & B hotel. Many RSAs provide brochures for government welcome centers. Some RSAs communicate with local companies and special event coordinators. When a prospective guest takes one of these brochures and invites RSA, he will provide the possibility with B & Bs to cater to their geographical and personal needs. Other benefits of joining RSA include valuable advice on how to operate the B&B. Usually many RSAs come to your bed and breakfast to see if it has the right setting to accommodate guests.
They usually bring a checklist and go through a checkup. Soon you will only discover the strengths and weaknesses of a B&B. Often times, this service is offered free of charge, as a preliminary consultation, RSA will do it as a way to determine if your B&B meets minimum standards. This scan helps embody the problems inherent in your B&B. If successful in the examination, RSA will be interested in listing your home. Typical operational services provided by RSA include, in addition to those listed, telephone answering, email / mail inquiries, checking and matching of hosts with hosts. They will send confirmation to guests who book. Some even send regular newsletters to hosts and help hosts keep records and prepare taxes. All of these services, of course, come at a cost. Generally speaking, the RSA commission will be between 20-25% of rental revenue from guests who book.
How much should I charge per room per night? Most B & Bs charge at least $ 100 a night for a double room. Depending on your geographical location, this amount may be significantly higher or less.
What kind of costs / expenses do you expect to pay in your bed and breakfast? Bed and breakfast operating expenses include food and drink, coffee filters, soap and shampoo, facial / toilet tissue, cleaning supplies, cleaning and laundry assistance, new papers, paint, repairs, linens, bedding, towels, fresh flowers, new flowers, advertising / promotion, office supplies, dues / subscriptions, business cards, reading lamps, phone, Internet access, commission to your RSA, membership fees for local business organizations (i.e. Chamber of Commerce), insurance, utilities, accounting fees, legal fees, income taxes, real estate tax and p Mortgage Benefits.
What kind of accounting or bookkeeping system is required at the bed and breakfast you run well? Accounting for bed and breakfast doesn't have to be complicated. Your options are a manual accounting system or a computer-based system. Manual accounting system can be as simple as checkbook, accordion file and some envelopes. The accordion file must contain 12 compartments per month. Include envelopes for major expenses in every cabin and place your expense receipts in every expense envelope. For those expenses that do not fit neatly into any one category, include a "miscellaneous" envelope. At the end of the month, increase your expenses on the control sheet that lists expenses on the left and a column for each month on the right. Subtract the total month from your receipts for this month and you will know how much money you earned or how much you lost. The computer-based system should be easy to use. I recommend QuickBooks because it is one of the easiest accounting software to learn and use on the market. A few hours with your accountant, who learns QuickBooks, can save you more hours of trial and error, let alone frustration and stress, on the road. If you feel that you don't care about the details in keeping even an initial accounting system, use the checkbook as an accounting system. Ensure that all expenses you incur are managed through your checkbook or that a specific credit card is used only for business purchases, if you are not good at keeping receipts.
Should I regulate B & B as a sole proprietorship, partnership, company, or limited liability company?
This is not an easy question to answer. Before we get to that answer, let me touch on how to own a B&B. I would recommend the B&B to be personally owned. The reason is that there are tax advantages to owning a B&B in person. One of the main tax benefits is the personal residential exclusion of any gain of up to $ 500,000 ($ 250,000 for individual taxpayers) over the personal residence portion of your bed and breakfast. Another reason is that this direct ownership better facilitates the use of B & B's sales tax by using a similar type exchange, which allows the seller to postpone taxes on any profit from the sale of BB, as long as the nice property (real estate) is acquired within six months From the date when the B & B. is sold through a direct personal ownership structure, you can rent the bed and breakfast to the legal entity that will run the business. In any case, I will not manage the B&B project as a sole proprietorship, as the sole proprietorship has unlimited liability.
My first choice would be a company in which the S elections were held. S provides the best limited liability protection, even better than a limited liability or partnership company. Here’s why. In a limited liability company, your personal responsibility is limited, in the event of a lawsuit due to some kind of negligence, but only if you did not personally cause negligence or injury (that is, the employee was responsible for negligence or injury and did not direct that employee to perform this act) . If you have anything to do with neglect, you and all your personal assets may be at risk. In partnership, as a general partner, you may be personally responsible for any negligence or injury, even if it was caused by an employee. In the company, only the company's assets are at risk. Your personal assets are safe. Corporate responsibility at the corporate level requires "breaching the corporate veil", which is difficult to do due to the long history of precedents that limit it. At S, any net income or net loss and some other tax items will flow into your personal income tax, because S is a pass-through entity.