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Opening a Bed and Breakfast | Add Comment

    • B&B Bunk 12/18/2007
    I taught the financial segment of a B&B course to aspiring owners. As such, I got to meet many owners ---- many of whom were willing to sell out if they could recoup their investments. In reality very few are able to realize a livable salary in return for being full-time “chamber maids.” And if you consider their meager salaries as an operating expense item, their ROIs are minus zero. The only ones that I saw making a reasonable ROI actually owned small motels, that they called B&Bs, with at lease 20 rooms, all with separate baths. Yes, local banks are the best source for financing. That’s because small, rural community banks can be naive and look at them as “homes.” They may lend 70-80 percent of value. They are clueless about how to make small-business loans based upon realistic operating statements and do not understand the enormous working capital requirements for start-ups. I have financed several of them (including with SBA guarantees) and my bottom line is that it is a bad business to be in. B&B dreamers should spend more time cleaning up their own bathrooms at home instead of blowing their money by doing it at a B&B. Forgetaboutit! Hotlanta

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      • Financing a Bed and Breakfast 12/20/2007
      Another financing option that wasn't mentioned was using retirement monies. Many people choose finance a bed and breakfast business with these funds in lieu of taking out a traditional loan. There are companies that can help you access retirement money as an investment into your new business, with out incurring a taxable distribution. Guidant Financial Group, the company I work for, has helped several people finance a bed and breakfast using their retirement funds.

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