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How Much Does It Cost to Start a Bed and Breakfast Business?

If you are looking to start a bed and breakfast business, then you should be prepared to spend over $300,000. While the average cost to build a house is $298,136 in 2023, most homeowners spend $111,980 – $484,293 to build their homes.

Note that this excludes furnishing and appliances. It is important to note that certain factors can influence the cost of starting a bed and breakfast business.

A bed and breakfast business is a capital-intensive business especially if you are planning to start the business from scratch.

The truth is that building a structure that will fit into the standard of the facility requires significant finance. A bed and breakfast (B&B) is a small lodging establishment where guests can stay overnight and enjoy breakfast in the morning.

Usually, bed and breakfasts (B&B) are cozy homes or historic buildings offering a personalized experience, often run by the owners themselves, creating a homely atmosphere for travelers.

Factors That Influence the Cost of Opening a Bed and Breakfast Business

  1. The Location of the Bed and Breakfast Business

For example, in popular tourist areas or urban centers, property prices are typically higher, and if you choose to start your bed and breakfast business there, then you should be ready to spend more money.

On the other hand, rural or less sought-after locations may offer more affordable options. Apart from that, the demand for accommodations and local regulations can vary by location, and this can impact your licensing fees and permits.

  1. The Size of the Property

For example, larger properties will require extensive renovations and furnishings, which can increase your initial investment.

Apart from that, operating costs such as utilities, maintenance, and staffing may be higher for larger properties that are used for bed and breakfast. However, larger properties may also accommodate more guests, potentially increasing revenue.

Therefore, while a larger property may incur higher upfront costs, it can also offer greater earning potential in the long run.

  1. The Amenities

For a bed and breakfast business, essential amenities include comfortable bedding, clean linens, private bathrooms, and complimentary breakfast.

You are also required to provide basic toiletries, Wi-Fi access, parking facilities, and any amenity that can enhance guest experience.

Depending on the target market and location, amenities like air conditioning, fireplaces, and outdoor seating areas should be part of the amenities you should budget for.

  1. The Types of Permits, Licenses, and Approvals Needed

If you are looking to build a bed and breakfast, you will be expected to obtain all the needed permits, licenses, and approvals from all the appropriate authorities within your jurisdiction.

Make sure you budget for a business license, zoning permit, building permit, health department permit, fire department permit, alcohol license (if applicable), food service license (if applicable), 

Signage permit, insurance (liability and property), employee identification number (EIN), state and local permits, bed and breakfast permit and noise ordinance permits (if applicable).

  1. Your Marketing and Promotional Expenses

Your marketing and promotional expenses may include website development, online advertising, print materials, and promotional events.

The truth is that effective marketing strategies for a bed and breakfast should include creating a user-friendly website with professional photos, utilizing social media platforms, partnering with local tourism agencies, offering special packages or discounts, and garnering positive reviews from guests.

  1. The Costs for Refurbishing or Renovating the Property

Your refurbishment or renovation expenses may include structural repairs, updating electrical and plumbing systems, installing safety features, and enhancing the overall appearance of the property.

The extent of renovations required may vary based on the condition of the property you want to use for your bed and breakfast and of course, the local regulations in the city where you have your bed and breakfast.

  1. Your Staffing Expenditures

To operate a bed and breakfast business, you typically would need employees such as a manager to oversee operations, front desk staff, maintenance staff, and possibly bartenders or servers if your establishment includes a bar or food service.

The amount you are expected to spend in this regard will be based on the number of employees you want to hire and the additional services you want to offer.

  1. The Cost of Insurance

You should budget for basic policies such as property insurance to protect buildings and contents, liability insurance covering guest injuries or property damage, and business interruption insurance for unexpected closures.

It is important to state that the premiums you are expected to pay will depend on factors like location, property size, and coverage limits.

If you have the required capital, you might want to opt for comprehensive insurance coverage. While insurance adds to startup costs, it’s essential for safeguarding the business and its assets against unforeseen events.