How to Start a Bed and Breakfast

Co-authored by Pete Canalichio

Last Updated: December 6, 2024 Approved

Many people dream of opening a cozy bed and breakfast. It allows the owner to meet an ever-rotating cast of visitors and earn a good income while essentially working from home. It's not all easy living, though - opening a bed and breakfast (or B&B) may require a substantial start-up fund for renovations and updates, and you will typically have to pay for a business license, zoning permits, inspections, and possibly a notary, depending on where you live.^{[1]
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Research source} The regulations will vary from state to state and may even change from one county to the next, but knowing what to expect when you open a B&B can help save you time and frustration.

Part 1

Part 1 of 3:

Planning Your Bed and Breakfast

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1
Know what to expect. It may seem like a B&B is a fun and easy way to make money, but in reality it is a business you will be operating with a large initial investment. Many bed and breakfasts end up closing within two years, either because of a lack of business or the high costs of operating a B&B. Remember that as a B&B owner/operator, you will need to:
- take care of reservations
- charge billing accounts
- manage the business's finances
- entertain guests
- keep a clean house
- interact with local authorities as needed
- update licenses and permits
- make/serve breakfast to guests
2
Assess your abilities. If you believe you have the business skills required to open a bed and breakfast, you should also assess your own abilities to operate a business that deals with serving and interacting with customers regularly. Not everyone has a personality or skill set that would work well for running a B&B, so it may be worth thinking honestly about whether or not you are able to. A good B&B owner/operator will need to:
- be self-motivated
- resolve tension
- be impeccably hospitable
- work long hours with frequent interruptions
- maintain enthusiasm in tedious situations
- be able to speak with a friendly and welcoming demeanor, even when you are having a conflict with a guest
- clean bathrooms and laundry that others have used
- plan and prepare meals, especially considering the prevalence of food allergies and specialized diets
- develop promotional materials like brochures, advertisements, and an up-to-date website
- write a working business plan
- perform accounting and bookkeeping work while sticking to a budget
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3
Evaluate your location and facilities. If you've decided you're ready to open a B&B and are ready to start making all the necessary preparations to start your own business, you'll need to perform an honest evaluation of your location and your facilities. Where you live and the condition and layout of your home could make or break your B&B venture. A successful bed and breakfast will need:
- to be in a community with a basic demand for bed and breakfast locations
- to be in an under-saturated market (i.e., not surrounded by existing B&Bs)
- a functional dining room, bedroom, and bathroom accessible to all guests
- a working kitchen that is big enough to cook for your maximum number of guests
- sufficient space for the maximum number of guests you'll have on a given day
- a bathroom space that can be kept extremely clean and well-ventilated
- a steady supply of toilet paper, tissues, and soap
- plenty of clean, brand-new linens
4
Decide on your target market. Every business has a target audience, and B&Bs are no exception. You can decide how you want to market your B&B, and you can advertise it as such on your website or through local lodging lists. You'll also want to customize your decorations/furnishings and amenities to best cater to your target guests.^{[2]
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Research source} There are five main types of guests to whom you should try to appeal (though remember, it will not be realistic to appeal to every single type of guest):^{[3]
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- tourists - how many tourists you draw in will probably depend on where you are located. Consider offering free travel maps and brochures to nearby destinations, or find ways to have your B&B business listed as a nearby lodging on local destinations' websites.
- business travelers - again, this will depend on where you are located. If you are in or near a major metropolitan area, or at least close to a few bigger business offices, you may be able to capitalize on this niche. Consider marketing your B&B as being a close resort near major business destinations.
- romantic getaways - this type of guest will most likely be had in any location, though being near a traditionally romantic getaway (like out in the country or within driving distance to a romantic restaurant) may give you some advantage. Consider offering some type of romance package, including date night goodies like champagne and chocolate-covered strawberries, to couples staying at your B&B for a romantic weekend.
- college/university visitors - once again, this niche depends on where you live. If you're near one or more colleges/universities, or if you live in or near a popular college town, you may be able to capitalize on parents, college sports fans, and out-of-town visitors. However, this type of market will probably be seasonal, and may not be very stable.
- locals needing extra lodging - many people having weddings, graduation parties, and family reunions will look for lodging near the party. You can market your B&B to locals by advertising locally as a great place for out-of-town guests to lodge.
5
Consider consulting an attorney. Depending on where you live, opening a B&B may be a relatively easy affair, or a long and difficult process. Laws vary drastically from one city, county, or state to another, and it can be difficult to ensure that your home qualifies for a planned B&B.
- Some states, like New York, have begun enforcing state-wide rules and regulations on what constitutes a hotel service. Many B&Bs have been deemed "illegal hotels" and were faced with exorbitant fines and fees.^{[4]
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- Save yourself the headache of future legal problems by consulting an attorney before you begin renovating your home and hosting guests.
6
Decide on how big to operate. The more rooms you have available for lodging, the more money you'll make. However, most states restrict how many rooms you can have. The maximum number of guest rooms typically falls somewhere between four to 10.^{[5]
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- Some states allow more guest rooms. Indiana, for example, allows up to 14 rooms per B&B.^{[6]
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  State of Indiana
  Official site for state-approved sources related to life in Indiana, including laws, services, and culture
  
  Go to source} Search online for B&B regulations in your state and county to ensure that your facility is in compliance.
- In Iowa, the state distinguishes between a B&B home and a B&B inn. A B&B home houses no more than four guest families at any given time, and is cohabited by the owner/host. A B&B inn may host up to nine guest rooms, and must be licensed and inspected as a hotel and a food service establishment.^{[7]
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- Check to see if your state requires you to register and be inspected/licensed as a hotel, dining establishment, or both.
7
Know your budget. Depending on the size, age, and condition of your home, you may need to put in a substantial amount of money on structural and/or aesthetic renovations. At the very least you will most likely need new beds, bedding, pillows, towels, and other fixtures for the rooms you intend to rent.
- Even small, low-cost renovations/conversions will require a sizable startup fund.
- Some experts recommend budgeting $20,000 to $40,000 per guest room for a small property, though conversions/renovations and redecorating may cost up to $50,000 per room in a larger or more dilapidated property.^{[8]
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Part 2

Part 2 of 3:

Converting and Renovating Your Home

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1
Hire a reputable contractor. If you need to make any conversions, repairs, or renovations to your home, you'll want to hire a reputable contractor. There are four primary types of contractors: a general contractor (manages every part of a project), a specialty contractor (works within a specific niche, like installing cabinets or bathroom fixtures), an architect (who draws up the designs for additions, renovations, and structural changes), and a designer or design/build contractor (who does both designs and installations/repairs).^{[9]
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Federal Trade Commission
Website with up-to-date information for consumers from the Federal Trade Commisson

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- Ask people you know and trust to recommend a reliable and reputable contractor. If you cannot get a recommendation from someone you know, you can look online for past customer reviews.
- Only choose a contractor who has an established company and comes highly recommended, either by someone you know or by others online.
- Get a written estimate from multiple contractors before you choose which one you'll hire. Keep that contractor's written estimate in case any major deviations take place during the project.
- Get a written contract with estimated start and completion dates.
- Do not pay cash. Use a check or credit/debit card so you can have a record of your payments and the dates they were made.
- Keep all your paperwork in one place, as well as a record of all correspondences with the contractor you hire.
2
Update your kitchen. Cooking breakfast is a vital part of a B&B, and as such your existing kitchen may not be enough. Remember that you are not just cooking for yourself, and will have to meet safety and sanitation requirements pursuant to your community. You can find out about the specific requirements for your town or county by searching online for business requirements near you. At the very least, you will most likely need:
- a functional ventilation system
- a preparation table
- a heat lamp
- a utensil rack
- a fryer
- a stove and oven
- a refrigerator and freezer
- dry storage space, kept off the floor and away from any hazardous chemicals
- a microwave oven
- a coffee maker
- a toaster or toaster oven
- a dishwasher
- a sink with a sprayer unit
- a garbage disposal (optional)
3
Invest in quality beds and fabrics. You'll need to furnish each of your guest rooms with beds and may want to include dressers. You'll also need new bedding, pillows, and towels for each room.^{[10]
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Research source} Investing in higher-quality bedding and towels may cost more up front, but it could save you money over time, as you'll need to replace them less frequently.
- Don't forget to take allergies into account when choosing bedding. Some people are allergic to feathers/down, wool, and other materials.
4
Furnish your B&B. In addition to beds in each room, your B&B should offer comfortable furniture in bedrooms as well as common areas. How you furnish the lodge will depend on your budget and your aesthetic tastes, but at a bare minimum you should provide a closet, night stand, reading lamp, dresser, arm chair, and blinds/curtains in each guest room. If you have any common areas in your B&B, you may want to include the following basics:
- sofa
- love seat
- comfortable chairs
- a writing table/desk and chair
- lamps
- end tables
- books, magazines, and board games
- a coat rack (placed near entrances)
- a place for dirty shoes (placed near the front door)
5
Buy guest amenities. Amenities should cover both lodging necessities and finishing touches that give the B&B a sense of comfort. Try putting out a decorative vase full of fresh local flowers, hang plants in the windows, and decorate the rooms with a variety of books and general interest magazines. You should also put an alarm clock in each room (just be sure the last guest didn't accidentally set the alarm to go off on a day that a new guest will be there), and consider offering a complementary wakeup service.
- Depending on your target demographic, you may want to offer a computer or wifi access to guests, and a printer or fax machine (especially if you will be hosting a lot of traveling business men and women).
6
Decorate your rooms. Once the rooms are renovated and furnished, you'll want to add a personal touch. A room with bare walls will not look very welcoming. However, a room loaded with photographs of your family will also make it difficult for guests to feel like the room is their own. Err on the side of caution and choose tasteful, non-personalized decorations that would feel warm and welcoming in any home.
- If you live in a rural area and you're appealing to autumn foliage viewers, try decorating your lodging with local wilderness photography. You may also want to adapt your location into your B&B's motif - like hanging birch bark-patterned wallpaper, for example, or mounting deer antlers over the fireplace.

Part 3

Part 3 of 3:

Opening for Business

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1
Secure the necessary licenses/permits. Where you live will determine the licenses and permits you'll need, as this will vary greatly by city, county, and state. In some places, hotel operators (which may include B&B owners) have to apply, pay fees, and may even have to submit to fingerprinting or a background check with city, county, or state police.
- In some places, you may need both state and county or city licenses. In other regions, there may not be any state license required, in which case you would simply need to secure a county and/or city license.^{[11]
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  State of Michigan
  Official website for the State of Michigan
  
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- Contact your city and/or county government to ask about business licensing in your community and how bed and breakfasts are regulated in your area.
If you and your family believe you can operate your B&B on your own, then you may be able to cut down on costs by not having to hire staff. However, depending on the size of the B&B, the number of customers, or the health condition of you or your family, you may need to hire additional workers. At the very least you'll want to hire an attorney and an accountant to help with your finances. You should also think about the tasks that need to be performed on a daily basis: laundry, cleaning, meal preparation, checking people in/out of their rooms, and restocking guest rooms after they're vacated. If you cannot perform all of those duties on your own, it may be worth hiring some help.
3
Plan your meals. Breakfast is not only a part of the name - it's also factored into the cost of lodging. What kind of breakfast you serve will depend on your culinary abilities, your kitchen space, your budget, and the laws governing food preparation in your region.
- A simple continental breakfast should include (at minimum): coffee, juice, milk, bagels or muffins, fruit, and yogurt or cereal.
- A more gourmet meal, like omelets, tofu scrambles, or a quiche, is always a highly-marketable option. However, keep in mind as you plan your meals that some guests have food allergies and other dietary restrictions.
- Depending on where you live, you may be required by local laws to install new kitchen equipment and cooking fixtures.^{[12]
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  Research source} There may also be additional laws and regulations governing how you store and prepare food, including cleaning and sanitation.
4
Determine what to charge. Setting your room rates is a delicate balance. You want to charge enough that you will make money (or at least break even), but not so much that you will drive away potential guests with a high price tag. When setting your rates, consider the following factors:^{[13]
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- what kinds of amenities you offer (like private balconies, private fireplaces, or a private hot tub) from one room to the next
- where you're located, and what local destinations draw tourists to your area
- what the going rate is for B&Bs in your area
- what kind of food you serve for breakfast, and any other service-related offerings
- whether guests will pay upon arrival or departure
- what forms of payment you will accept
5
Decide on guest rules. One of the biggest things to balance in running a B&B is the separate spheres of your private home and the needs and comforts of guests. You'll have to decide what is permissible and what will be forbidden in your lodging, and you'll need to determine ways of enforcing those rules (like adding on additional fees or bills, for example). Some common guest rules to decide on include, but are not limited to, whether or not guests can:
- bring pets
- bring children
- consume alcohol on premises
- smoke on premises
- bring non-guests back to their room
- play music or watch TV
- have access to the full house and grounds
- be restricted to an evening curfew or quiet hours
- eat breakfast whenever they awake or observe a specific breakfast hour
6
Market your B&B. Before you open, you'll need to start marketing your bed and breakfast. This is an important part of running a business, and you'll need to maintain marketing and advertisements for as long as you maintain your B&B. You'll need an up-to-date website, of course, but that won't be enough in most lodging markets. Marketing your business takes a lot of time and effort, but ultimately is necessary for the success of your bed and breakfast.
- Know your target audience and market your B&B to those guests.
- Understand the needs and wants of your guests. Tailor your advertisements to show how you meet those demands.
- Put up flyers, a press release, and an ad in the phonebook.
- Send out an e-newsletter and send direct mail to previous guests.
- Be sure to advertise your business online, though you should still advertise in print as well.
- Create a social media page for your B&B so that visitors can leave reviews or share your business's information with their friends.
- Make a rustic-looking sign with your B&B's name and address. Put the sign up at the end of your driveway or near your house to let guests know they've found the B&B they were looking for.
7
Open your doors for business. Once everything is renovated and decorated, you've secured all the necessary permits/licenses, and set a nightly rate for your guest rooms, you're ready to open for business. Create a website so that potential guests can find you online, and register your business with review sites like Yelp.
- Don't forget to use a registration ledger, and keep all receipts from visiting guests. Many states mandate that B&Bs purchase and maintain an up-to-date guest ledger, and in some states a Code Enforcement Officer or Building Department representative may request this ledger to confirm that your B&B is adhering to local and state laws on the number of guests lodging at your home.^{[14]
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Community Q&A

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Question

How much does it cost to build a guest house?

Community Answer

Site-built guest houses vary dramatically in price depending on size, layout, materials, finishing options, and your location. You could spend anywhere from $100-$500 per square foot to have the guest house designed, built, and finished. Modular guest houses start at about $30,000-$40,000 for 600-700 square feet.

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How much should I charge for rooms with King size beds or Presidential Suites?

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King beds and Presidential Suites should be from $120 per suite or $200 and up depending on how nice the B&B is.

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