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How to Start a Bed and Breakfast or Hotel Business

What could be better than creating the perfect location and ambiance for people to enjoy their vacation? A bed and breakfast or hotel business is a great way to provide a desirable destination for travelers and a sustainable income for yourself.

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Information about the B&B or Hotel Business

    What Type of Bed and Breakfast Business Should You Start?

    If you want to start a successful bed and breakfast business, it’s important to know what your options are. Here are some of the more popular business ideas:

    Boutique Hotel for Tourists

    This is the “standard” B&B experience providing accommodation for vacationers. They will want easy access to attractions, a nice place to relax and good knowledge of the surrounding area. This type of B&B allows you to cast the widest net when you’re looking for guests, and it will really help if you build relationships with local tourist organizations.

    Easy Accommodations for Business Travelers

    If you’re in a popular city, you can make a good living providing accommodations for business people. They’ll be looking for good transportation access, a place to work in their room, excellent internet connectivity and a way to relax after a long day working.

    Romantic Getaway

    Couples love escaping from the rat race for a romantic weekend away. You can provide beautiful rooms located near high-end restaurants and offer extras like champagne in the room or special baths designed for two.

    College or University Town Rooms

    If you’re in a location near a large academic and student body, you can market toward that demographic and their families. If people are coming in to visit family members or check out schools, they probably only need fairly basic, low-cost accommodations that are relatively close to the major colleges and universities.

    Niche Boutique Hotel

    If there’s enough of a market in your city, you can even go a little more niche. For example, your B&B might specialize in providing a particular type of food like gluten-free or vegetarian. You might be perfect for a specific type of guest like seniors or young people. Whatever area you decide to focus on, do the market research to ensure there’s enough demand.


    Airbnb is another great way to make a living as a boutique hotel, especially if you only have one or two rooms available.

    Validating Your Bed and Breakfast Business Idea

    These are all great starting points, but you will need to build on them to make the business your own. You have unique skills and insight that you can use to create a bed and breakfast business that will really stand out.

    Getting started in a bed and breakfast business can take a lot of time, effort and money. It’s important to validate your idea and test the marketplace before committing too much.

    Identify your B&B business’ unique selling points (USPs)

    You’ll need to find the areas that really set you apart. What is it that your boutique hotel does well that you can use as a USP? Do you offer superlative service, amazing food, a great location or something else that helps you stand out?

    Look at who your competitors are in the space

    Every B&B is going to have competition. That’s not a problem, so long as you can be distinctive. Remember, guests are coming to you for an experience they can’t get elsewhere, so finding out what your competitors are good at and differentiating yourself is essential.

    Understand your market

    It’s vital to understand exactly who your potential guests are likely to be. Spend some time researching your desired market, where they hang out and how you’re going to reach them. This will be essential to your marketing, communications, sales and outreach.

    Talk to guests

    Speak with potential guests to understand what they want from your boutique hotel, and validate this by asking if they would commit to spending real money on them.

    Get involved with business communities and discussion groups

    One of the great things about the bed and breakfast industry is that there are plenty of great communities and discussion groups. Get involved in them and learn the ins and outs of your chosen market before committing.

    The thing to learn here is that it’s okay to say “no” to your first, second or third bed and breakfast business ideas. Few hospitality entrepreneurs get it right the first time. In fact, getting it wrong is often a badge of honor! Still, you don’t want to waste too much time, energy or money on the wrong initiatives, so ask and answer these questions honestly to find the right way forward.

    Your Bed and Breakfast Business Needs a Plan

    A strong business plan is vital for a successful B&B. The startup costs can be high (possibly in excess of $100,000), so it’s important to nail down all of your facts, figures, strategy and other areas.

    You need to define how you’re going to run your bed and breakfast business, market yourself, get sales, make a profit and grow. This can only come about through creating a watertight business plan. It will help you get your thinking in order and show your commitment to your boutique hotel.

    You will also need to look at financial projections for your bed and breakfast business. What are your expected sales and revenues? What is your profitability? How much money will you keep in the business to grow it? How much will you pay yourself and others?

    If you can, try to plan your revenue for the next month, three months, year and two years.

    It’s vital to take into account the cost of setting up a bed and breakfast business in the first place, also factoring in utilities, staffing and other costs. Business plans do vary slightly, but they should all cover the following areas:


    An executive summary with the most important points from your business plan


    Your goals and what you hope to achieve with your bed and breakfast business


    A description of your B&B operations, background information and context


    A market analysis and likely demand


    An overview of how your boutique hotel business is structured


    Your business model


    How you will market and sell your offerings


    Financial projections, revenue, and profitability



    We’ve got the perfect guide to writing your business plan.

    Right Business Structure

    Setting up Your Boutique Hotel and Business Operations

    Once you've legally created your bed and breakfast business, you’ll need to get some other things in place.

    Location of your Bed and Breakfast or Hotel

    This is, by far, the most important choice you’ll make. You will need to secure a property large enough to give you all the B&B rooms you need to reliably generate revenue based on expected occupancy. Of course, you can choose to live in the property as well, which will reduce your expenses and ensure you’re on hand when needed. Choose a location that’s suited to the type of guests you want to attract. Look at other competitors in your immediate area, as you don’t want to be on each other’s doorsteps.

    Marketing Your Food Truck Business

    Marketing will be a huge part of your bed and breakfast business. Naturally, you will need an awesome website, but you'll also need to get branding, newsletters, digital ads, social media accounts and other channels in place. You should also focus on review websites like TripAdvisor or Yelp. See if you can get into partnerships with travel agents and similar businesses, and market your B&B through travel portals and aggregators.

    Software and Process

    The right software and processes will make running your bed and breakfast business much easier. See our list of the best apps and software at the end of this guide.


    To begin with, you might want to do everything in your B&B yourself. Later on, you could look into hiring people for tasks like cleaning or cooking.

    Finances and Taxes

    You will need a separate business bank account for your bed and breakfast business. You might also want to consider a business credit card. Additionally, you will also need to keep careful bookkeeping records and file business and personal taxes. Here at Bizee we can even help you file your taxes.

    Furnishings and Equipment

    The Complete "Start Your Business" Checklist

    A Clear and Comprehensive Guide to Starting Your Business the Right Way

    Rules, Regulations and Taxes for Your Bed and Breakfast Business

    You will need to explore local, state and federal licenses and permits, and we can also help out with researching your business licensing needs


    Taxes are a fact of life if you’re in business, and there are various ways you will need to file and pay them. This can include self-employment tax, state income tax and federal income tax. You may also be liable for occupancy and sales and use tax. As a rule of thumb, we recommend holding back around a third to three-fifths of your earnings to pay your taxes. We can also prepare and file your tax returns for you.

    Maintaining Your Bed and Breakfast Business Documentation

    There are certain forms and legalities you need to follow to keep your bed and breakfast business in good standing.


    File an Annual Report

    Depending on the state you’re located in, you will probably have to file a report every year. This report tells the state about any major changes to your business, and we can file your Annual Report on your behalf.


    Pay estimated taxes

    You will be expected to pay estimated taxes on what you plan to earn in the current business year. Typically, you will need to pay estimated taxes in April, June, September and January (of the following year).


    Renew Business Permits and Licenses

    Your business will probably have several licenses, permits and other regulations. These typically need to be renewed every year.


    Prepare your taxes

    You will need to work with your accountant to prepare all the taxes you need to pay.


    File your taxes

    You will need to file your taxes once a year.


    Pay payroll and sales taxes

    If applicable, you will need to make payroll and sales tax payments on a regular basis.

    Groups and Forums for Hotel Owners

    Here are some useful places where you can connect with other bed and breakfast entrepreneurs.

    Useful Online Tools for Your Bed and Breakfast Business

    The right software and apps will make it much easier to run your bed and breakfast business. Here are our recommendations for some of the best tools out there to make business operations a breeze.

    Project Management


    Marketing Automation

    Customer Relationship Management (CRM)

    Customer Support

    Human Resources

    Website Development

    Please note: This page contains affiliate links and we may receive a commission if you make a purchase using these links.


    The B&B or boutique hotel industry is the perfect choice if you love hospitality and want to provide an amazing experience for your guests. We hope this guide has inspired you to find the right idea for the type of hospitality you want to provide. Good luck!