Tourism is booming in Canada. The sector generates more than $80 billion annually, and with amazing sites such as Niagara Falls and the breathtaking Banff National Park, it’s easy to see why Canada is one of the world’s leading vacation destinations. If you want to be in the tourism industry and love hosting guests, starting a bed and breakfast can be a fun way to help people enjoy visiting Canada even more. Before getting started, get familiar with the following nuts and bolts of launching a B&B.
Location, Location, Location
There are a couple of options when it comes to choosing a good location for your B&B. You may be lucky enough to own a large home in a hot tourist area that could be turned into a B&B, in which case you have a few things to consider. If you have a family, it needs to be on board with either living in the B&B or moving to another house. Most tourists aren’t too keen on sharing bathrooms, so you’ll need to renovate the home so people will want to stay there. If you’re one of those entrepreneurs who goes where the business is, it might make sense to scout a location that attracts a lot of tourists and buy a property to turn into a B&B. You can also look for B&Bs for sale and consider taking over someone else’s existing brand and clientele. But it’s important not to jump the gun when location scouting. You’ll need to do market research to find out exactly how much business you can expect to get, whether tourist traffic is seasonal or annual, and if you’ll be able to earn enough money to pay employees and stay open if tourism slows down.
The B&B Business Plan
You shouldn’t get into any business on the fly, and a B&B is no exception. You’ll need a business plan to help your idea for a B&B take shape. And certainly, you’ll need one if you decide to apply for funding. Your average business plan has about seven parts, some of which you might be able to consolidate depending on the simple or complex nature of your B&B idea. Your business plan should include:
- An overview of your business idea
- A detailed description of your proposed B&B
- Your services and pricing
- Details about potential guests and your competitors
- How you plan to stand out among your competitors
- The staffers you’ll need to help you run the B&B
- Details about how much money your B&B can earn
In your business plan, you should also include details about how you plan to keep tabs on how the B&B is doing financially, tabs being a layman’s term for key performance indicators, or KPIs. Since you’re in the hospitality industry, you’ll look at numbers like your weekly sales, occupancy rates, and customer satisfaction to get a feel for how you’re doing financially. Overall, a business plan might seem like a lot of work, but it’s really important to know your chances of success before you make any investments.
Converting a building into a B&B takes a lot of money, the kind of money people of average means may not have on hand. With a solid credit rating, you might be able to qualify for small business funding from a bank. Again, having a completed business plan handy can go a long way in getting a business loan approved. You might also look for private investors within your family and your sphere of influence. If you accept funding from private investors, you’ll want to hire a lawyer to help you draft a contract detailing a repayment or profit-sharing schedule. You can apply for provincial loans and grants for tourism industry businesses, but you’ll need to get familiar with each funding program’s guidelines, as detailed on websites such as the Canada Business Network, to ensure your B&B qualifies for government funding.
Licences and Permits
Unless you plan on hosting one or two people a year, you’ll need a business licence. You’ll also need to register with the Canada Revenue Agency or your provincial government to collect GST/HST and other taxes charged on the sale of goods and services where your business is located. Additionally, you may need a permit to renovate your residential building. And once you’re up and running, you’ll probably need a permit to serve food. Depending on your province, you might need a permit to sell things to your guests such as tobacco products. In short, you’ll have to spend a little time researching local laws to find out which permits you’ll need to be totally compliant. Starting a B&B is a lot of work, but it can also be a lot of fun. With a solid business plan and some funding, your dream of offering amazing accommodations to tourists could be on the cusp of coming true.