No matter what your profit potential is, you won't have any earning to count until your B&B is ready to take in guests. And getting up and running takes bread. While you can make do with the extra set of Little Mermaid sheets from your daughter's trundle bed for visiting family and friends, you'll need to buy brand-new bedding for your B&B guests, along with new mattresses, pillows, towels and more. And even if you run your operation from your existing home instead of buying a fixer, local laws may require you to install new kitchen equipment or fixtures, upgrade the pool to public standards, or add fire safety fixtures.
Just how much you spend will depend on your particular B&B. Obviously, the fewer guest rooms you have, the fewer mattresses, pillows, towels, and the like that you'll have to buy. Also, you'll spend far less updating your existing home with plenty of guest rooms than if you buy a dilapidated relic that was condemned 20 years earlier.
But while it's impossible to put a price tag on the property you'll transform into an inn, it's possible to ballpark renovation and furnishing costs. A good rule of thumb is $35,000 to $50,000 per guest room for larger properties and $20,000 to $40,000 for very small or low-cost operations, suggests Jerry Phillips, executive director of PAII.
There's a lot more to transforming your dream of a B&B into reality than just choosing designer towels for the bathrooms. First comes replacing fantasy with the hardcore planning stage, and that includes researching the type of guests you can attract and planning how you'll woo them.
Take a look at the following typical target markets. If you can pull in two, or several, that's great. But you'll need to attract at least one--or get creative and come up with something else that will bring ample visitors.
- Tourists. The quintessential vacationers, these are the people who are out for a good time. Visiting amusement parks, national parks and museums, beachcombing, boating, skiing, sightseeing and, of course, shopping are their modus operandi. If you're close to any sort of natural or man-made attraction that brings people in, you've got a great market. The tourist market can be extremely seasonal, depending on your location.
- Business travelers. Whether traveling salespeople or company presidents, business trippers account for a lot of lodging stays. At most recent count, says the Travel Industry Association of America (TIAA), 212 million business trips were taken in a single year, and more and more business travelers are opting for the joys of the B&B over the impersonality of a hotel. If you'll be in an urban locale, business travelers could be a terrific market for you. But you don't have to be based in New York City or Chicago to attract the commercial trade. Many small towns and suburbs boast one or two large corporations that generate a lot of income--and a fair amount of business travel. As an added bonus, business travel, unlike the tourist trade, isn't seasonal.
- Romance. Everyone loves a romantic getaway, and the B&B is its epitome. It's a sizable market--nearly 62 Americans, or 31 percent of all adults, splurged on a romantic weekend or longer in a recently surveyed year, says the TIA. The average traveler, it adds, revved up with two-and-a-half romantic trips during the same year.
- College or university. If you're located in a college town, you've got a built-in market, at least during certain times of the year. Football games, homecomings and graduations, not to mention new student orientations and parents' weekends, conferences and other academic or public events can bring visitors in droves. And since many college towns are also small towns with little lodging competition, this market could be yours in which to shine. Keep in mind that your business will be seasonal unless you can augment it with another target market.
- Locals' extra bedroom. You might think people who already live in your town wouldn't be interested in your B&B. But you can develop a tidy additional market by promoting yourself to locals as "your extra bedrooms." Somebody is always having a wedding, family reunion or other event for which they invite lots of out-of-town visitors, and then have nowhere to put them up. You can fill the gap.