Buying a bed and breakfast is probably the biggest purchase you will ever make. Approach it wisely so it’s not the biggest mistake you ever make. The horror stories I can tell you about B&B sale transactions would make your toes curl (and I will share some “horror stories” throughout this Quick Guide to help illustrate my points). The purpose of this Quick Guide, as well as my other Quick Guides, eBooks, and seminars, is to help you make your B&B career be the most profitable and enjoyable possible
I think education is vital to any new business venture one takes. B&B innkeeping looks easy, so too many people enter into the business without learning anything about it first. Buying a B&B seems like it would be as easy as buying a house, so way too many people proceed without education or professional assistance. At the very least I hope you’ll put this Quick Guide to good use and at the very least ask lots of questions. Keep asking questions until you are satisfied that you have the information you need to make a decision or take an action. Ask the same question of several people, compare the answers, and then ask about the differences you find in the different answers.
To help make this the most valuable resource for you that I can, I have elicited input from B&B Brokers around the country. I was a B&B broker for over twelve years, but only in Colorado. Because you may have interest in another part of the country I want you to have expertise from other parts of the country, hence the collective mind of experienced B&B Brokers.
I’m differentiating between real estate broker and B&B Broker because a B&B Broker has so much more background and experience in the sale of bed and breakfasts than a general real estate broker. The majority of the problems I’ve heard about in B&B transactions has been when a general real estate agent has been involved, not someone with B&B experience. Regardless of how much B&B experience the broker you hire has, don’t relinquish too much power to them; stay in control and check all information you get during your process of searching for and buying your B&B. Communication is challenging in the best of conditions; you need to ensure you and your broker understand things the same way, and that the understanding is correct. There are lots of details to know about and tend to in a B&B transaction to make it go smoothly for both seller and buyer. Not only should you know as much as possible about the transaction, but so should the agent you are working with.
The break-out of questions for your consideration include questions for yourself, your agent, the Seller, and zoning officials, as well as miscellaneous questions for consideration and research. You’ll find discussion and debate about these questions and in some cases suggestions of the answers to look for.
A Sample Question
Is this property zoned for the business as you run and advertise it; special events, number of guestrooms, meetings? Are parking, fire protection, and signage to code? Is the seller willing to put these answers into writing?
One B&B sale I heard about involved the buyer not asking, or verifying, if the zoning matched the business as advertised. The seller implied things were to code, but never directly said so. After the sale completed the buyer discovered that the zoning didn’t allow all the activities that went along with the business. The buyer had to get the B&B re-zoned so booked weddings, special events and meetings could legally be held there. Parking had to be increased and fire protection improved too. The buyer wouldn’t have paid nearly as much for the B&B if the truth had been known before the purchase.
Buying a B&B can be a frustrating, time consuming experience. The amount of homework you do ahead of time will ease the way and make for a smoother situation and more profitable business. Part of your homework is knowing what questions to ask. You have a good handle on what questions to ask of whom. Expand on those questions as you proceed through your search and purchase adventure.
The more you ask of the people involved with the inns you consider for purchase, the fewer mistakes and surprises you will have after closing. The more questions you ask during your search, the more you will enjoy a successful B&B business. Part of that success is happiness in the new lifestyle you have chosen.
Don’t forget to also take classes (B&B and other related to running a successful B&B), read books and eBooks, attend B&B conferences, stay in bed and breakfasts (that teaches you more about the guest comforts that you enjoy so you can offer them to your guests), and hire B&B specialists to assist you along your path.
This is a sample from the Quick Guide “Questions B&B Buyers Should Ask”. Click here to order this eBook and others in the Series.