Startup cost
$200k–$5.0M
TRUiC Business Ideas
How to Start a Bed and Breakfast
Decision Snapshot
Bed N Breakfast
Idea Score
34
Profit margin
3%
Break-even
4 mo–12 mo
Time to launch
12 wk–36 wk
Demand trend
Rising
5-yr failure rate
—
Capital intensity
Very high
Time commitment
Full time
Part 1 - How to start a Bed and Breakfast business - Background
A bed and breakfast business offers travelers an alternative to hotels and motels, by combining sleeping quarters with a full breakfast. Most bed and breakfasts also promise more unique, intimate settings than other lodging options.
You may also be interested in additional home business ideas.
Our guide is in 3 parts:
- Part 1 - How to start a Bed N Breakfast business - Background
- Part 2 - Our planner tool to see if this idea is the right fit for you
- Part 3 - Action plan to get started
What are the costs involved in opening a bed and breakfast?
The startup costs for a bed and breakfast are significant. The largest expense, by far, is the price of purchasing a property.
Bedandbreakfastforsale.com maintains a list of established bed and breakfasts for sale. The inventory obviously changes, but there regularly are places for sale for anywhere between $200,000 and $5 million. Some of the factors that affect price include the condition of the building, the size of the property, the location of the property, and how established the business is. Most business owners need to take out a mortgage to pay for a property.
Alternatively, business owners can purchase any large house and turn it into a B&B. Old mansions and farmhouses are especially promising properties, as they usually have character and plenty of rooms. The price for a property can range anywhere from thousands for a run-down structure, to millions for a beautiful building in a great location.
Business owners who purchase a property that’s not already a bed and breakfast will have to furnish and decorate it. Other startup costs (which are small compared to the other expenses) include licenses, insurance, and breakfast-making supplies.
What are the ongoing expenses for a bed and breakfast?
The biggest ongoing expenses for a bed and breakfast business include mortgage payments, taxes, insurance, and property repairs. Other expenses include utility costs, cooking supplies, and any licensing fees.
Who is the target market?
An ideal customer is someone who travels a lot, usually for pleasure, and has discretionary income. Vacationers are more likely to spring for the intimate setting of a bed and breakfast than business travelers are. People need a decent amount of discretionary income in order to afford the rates of a bed and breakfast, which are often higher than a comparable hotel or motel.
How does a bed and breakfast make money?
A bed and breakfast makes money by charging guests for their lodging, which includes breakfast. Guests may be charged by the night, week or month.
How much can you charge customers?
The going rates for a room at a bed and breakfast vary quite a bit, with most charging between $75 and $400 per night. Location, amenities, and season all affect these rates. Business owners should research the going rates at different times of the year in the area where they’re considering starting a B&B, to see how much they might be able to charge.
How much profit can a bed and breakfast make?
A bed and breakfast business’ profitability depends on the number of rooms it has, how much it charges per night, and its occupancy rate. Total profit potential varies greatly.
As an example, assume a bed and breakfast has five rooms that have an average rate of $125 per night. If all rooms were booked every night of the year, the bed and breakfast would have an annual revenue of $228,125.
Few bed and breakfasts are booked every night of the year, though. About Travel reports that the average B&B has an occupancy rate just a little higher than 50%. At a 50% occupancy rate, the bed and breakfast in this example could expect a year’s revenue to be closer to $114,063.
From this figure, all operating expenses must be subtracted. This includes all building costs and utility costs, which can be substantial.
How can you make your business more profitable?
A bed and breakfast can increase its profitability by offering special packages for guests, and by opening its meals up to the community. Some guests will be willing to pay a bit extra for anniversary, honeymoon, or holiday packages. Additionally, letting people who aren’t guests dine at your B&B provides an additional revenue stream and, potentially, lets a bed and breakfast use its kitchen and dining facilities to offer lunch and dinner.
Day-to-Day and Growth
What happens during a typical day at a bed and breakfast?
Much of the work involved in running a bed and breakfast business revolves around looking after guests. Daily duties include welcoming incoming guests, cooking breakfast in the morning, checking guests out, and cleaning rooms after guests leave. While someone should always be on call and available, midday and late-night hours usually require little work.
What are some skills and experiences that will help you build a successful bed and breakfast?
A successful bed and breakfast business owner should know how to decorate rooms so they’re welcoming, and also be able to cook a good breakfast. Business owners who don’t have an eye for interior decorating should ask a friend or family member for help. (Saying thank you to a friend with a free night’s lodging costs much less than hiring an interior decorator.)
Business owners who don’t have an eye for interior decorating should ask a friend or family member for help. Saying thank you to a friend with a free night’s lodging costs much less than hiring an interior decorator.
Owners can get breakfast recipe ideas online, from sites like Pinterest and food blogs. Owners who don’t know how to cook at all can learn by consulting well-known cookbooks, such as The Joy of Cooking. For more hands-on help, owners can enroll in local cooking classes or hire a local chef as a consultant for a day.
It’s also helpful if owners know how to perform routine building maintenance and make basic repairs. Being able to take care of minor building issues will save a business from hiring a professional to fix everything.
What is the growth potential for a bed and breakfast?
A bed and breakfast business usually has one location. Thus, a bed and breakfast’s growth potential is typically limited by the number of rooms in the building. Most have at least four or five rooms for guests, and some have a dozen or more.
A few successful bed and breakfasts expand by purchasing a second, nearby property for guests to stay in. This is relatively uncommon, though. It’s also difficult to plan for, because you have no control over when nearby buildings come up for sale.
How and when to build a team
Many bed and breakfast businesses are run by one person or a couple. Some bed and breakfasts hire an employee or two. Even large ones, however, keep a fairly small staff.
Read our bed and breakfast hiring guide to learn about the different roles a bed and breakfast typically fills, how much to budget for employee salaries, and how to build your team exactly how you want it.
Part 2 - Is a Bed and Breakfast business the right fit for you?
Business Evaluation & Strategy Tool
We'll walk you through the four pillars every business needs: Points of Leverage, Marketing Strategy, Financial Model, and Personal Compatibility. At the end you'll see a personalized report and your action plan below will be tailored to your answers.
Step 1 of 4 — Points of Leverage
Every viable business has natural advantages. Below are common leverage points across four categories. Pick the ones that apply to your Bed N Breakfast business. We've pre-suggested a few based on your idea — review and adjust.
Step 2 of 4 — Marketing Strategy
Without a way to connect with customers, even great businesses fail. Pick the channels you plan to use to reach your customers.
Step 3 of 4 — Financial Model
Enter your monthly baseline costs — the minimum overhead to keep the business running. Then we'll calculate how many sales per month you need to break even.
Step 4 of 4 — Personal Compatibility
A business that doesn't fit your life will fail no matter how good the numbers look. Tell us how this business fits you.
Your Bed N Breakfast Evaluation Report
Complete the four pillars and your personalized summary will appear here.
Points of Leverage
Marketing Strategy
Financial Model
Personal Compatibility
Part 3 - Action plan to launch your Bed and Breakfast business in 90 days
Nine concrete steps to take you from idea to open business, grouped into 30-day phases. Complete the planner above and we'll highlight what's most important for your situation.
First 30 days — Foundation
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Form your legal entity
An LLC keeps your personal assets separate from business debts and lawsuits — the most common reason small business owners choose this structure. Sole proprietorships and partnerships do not provide this protection.
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Get an EIN and register for taxes
Apply for your free Employer Identification Number through the IRS, then register for any state or local taxes that apply to your business (sales tax, franchise tax).
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Open a business bank account and credit card
A dedicated business account is required to maintain personal asset protection. Mixing personal and business finances ('piercing the corporate veil') can void your LLC's liability shield.
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Set up business accounting
Recording expenses and income from day one makes tax filing easier and lets you see when the business is actually profitable. Use software (QuickBooks, Wave) or a part-time bookkeeper.
Days 30–60 — Compliance & Risk
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Get permits and licenses
State and local requirements vary widely. Brick-and-mortar businesses typically need a Certificate of Occupancy; service businesses may need specific professional licensing; food businesses need health permits.
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Get business insurance
General Liability Insurance is the most common starting point. If you'll have employees, most states require Workers' Compensation. Specific industries need additional coverage (product liability, professional liability, etc.).
Days 60–90 — Launch
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Define your brand
Your brand is how customers perceive and remember you. A clear name, logo, and visual identity make every later marketing decision easier and protect you legally as you grow.
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Create your business website
Every legitimate business needs a website. Social media pages are not a substitute — you don't own the platform. Modern website builders mean you can launch a clean site in a weekend without a developer.
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Set up your business phone system
A dedicated business number keeps your personal life private, makes the business look legitimate, and lets you route calls professionally. Cloud phone services start under $20/month.