The single most important thing to consider whenever you start a business, regardless of the sector or the scale of the operation, is whether or not it will be able to make a profit. Profitability is essential or the enterprise won’t be sustainable and will quickly encounter difficulties. You’ll also struggle to attract investors and financial backing if you can’t provide evidence that you will be able to deliver a return.
In the bed and breakfast industry, the level of competition and amount of investment that is needed to make an establishment successful means you need to have a detailed plan for making a profit. One of the most crucial aspects of this plan will be the location. The area you choose to base the B&B in will affect a lot of factors that will influence your ability to go forward, including the potential price of the property, the kind of audience you’ll be catering to and the sort of rates you will be able to charge for rooms.
When considering locations, hoteliers generally categorise them as either primary, secondary or tertiary. A primary location is an area with major leisure or commercial attractions that will attract many visitors and increase demand for rooms. Secondary locations have considerable economic and social benefits but generally have less prestige. Tertiary areas are peripheral to sources of tourism.
The difference between the types of area can be huge, both in terms of the prices and the type of audience the B&B will appeal to, and it is important to be aware of this when selecting a location. A single city can have hundreds of different areas within it, all of which will have their own characterisation, and it is important to choose a location that suits your plan.
You should never rush into a purchase without researching the area carefully. Consider whether it is primary, secondary or tertiary as a starting point then look into other details about the area, such as accessibility, parking and transport links. All of these matters will have a significant effect on the business.
At Stewart Hindley and Partners LLP we have helped a huge number of clients gain access to the bed and breakfast finance they need. We have encountered a diverse array of different business plans over the years, including all kinds of unique ideas. In all cases we can help people with their plans, including considering the location they want to base the establishment in. We always advise clients to create the best plans they can because they can have a positive influence on lenders.