If you’ve read Part I of this series, we look forward to sharing additional curated knowledge from industry experts on how to buy a business and operate it as a successful B&B, inn, boutique hotel, or other unique lodging property. If you missed Part I, take a step back, and read Biggest Mistakes When Buying a Bed and Breakfast – Part I first.
In Part II, we’ll explore common issues that can occur once brand-new owners take the reins of their property, as well as considerations when deciding on the location, size, and amenities of the lodging property to buy.
Mistake #1: Trying to Change Everything on Day 1
Many new owners buy a flailing business in desperate need of a revitalized brand and vision. However, the key is to be prepared to operate the business “as-is” for a few months until you fully understand it operationally. Your patience will help retain staff and preserve historic partnerships with other businesses and vendors. Until you know why or why not something is working and how to properly fix it, you could be “disrupting” an integral part of the current business’s success.
Mistake #2: Not Integrating Yourself Into The Area
Once you own the property (and ideally even beforehand) you need to get to know your neighbors, vendors, partners, the folks at the chamber of commerce, CVB, etc. They will all be integral in helping you run your business and grow your burgeoning brand. Having a reliable HVAC company and knowing whose property borders yours can be just as important as attracting new guests to your inn. Get to know your current suppliers while also seeking out what other local options are available. Visit the local hospital, university, private school, summer camp, or funeral home and introduce yourself and your business. You’d be surprised how often one of these relationships becomes a valuable referral source (and how often they weren’t aware your inn even existed). Get to know the owners/managers of area attractions, restaurants, and boutiques. Tell them about your business and let them know you are interested in partnering with them. It’s also important to find out who you would be better off not associating your brand with…
Mistake #3: Not Staffing & Delegating Properly
Not that we want to scare you, but you should be ready for staff members to leave along with the previous owners. It is by no means the standard, but we have seen it happen many times and watched new owners caught completely unaware. If you are looking at a larger property and plan to have a general manager, it is beneficial to have your candidate ready when you take ownership. You don’t have to run operations the same as the old owners, but make sure you have staff members eager to align with your vision. Being unable or unwilling to find the right staff members and delegate properly can do tremendous harm to the guest experience and your brand. You need to build a team you can trust, including both on-property staff and consultants.
Mistake #4: Not Being Ready or Able to Spend
Some call it being cheap but that doesn’t sound very nice does it? However, not being ready to spend on necessary repairs, improvements, and physical and digital systems along with bed and breakfast marketing and advertising, can negatively affect your bottom line! You need to be ready to invest above your cash outlay as soon as you take over. Thus, be certain you are prepared financially in the first place. We realize the property may have touted itself as “turnkey” but there might be deferred maintenance you need to handle. It might be cliché, but “you have to spend money to make money.”
Mistake #5: Not Understanding The Digital Tools of the Trade
Your website is your most important digital asset and the first impression most potential guests will have of your property! You need to know the age, capability, and historic and current performance of the website you just purchased. You need to understand property reviews from different sources and how to respond to or in some cases remove them. You need to be fully aware of the digital competitive landscape in your area so you know where your marketing and advertising dollars are best spent. How are you tracking performance? How does your booking engine work? Where were the previous owners spending their precious marketing dollars, and was that money well spent? You need to have a solid understanding and do a marketing SWOT (Strengths, Weaknesses, Opportunities & Threats). We highly recommend an analysis from a professional before buying so you aren’t surprised when it’s all on your shoulders!
Mistake #6: Not Experiencing Your Property (& Area) As a Guest
Are your beds comfy? Do your guest rooms have outlets people can actually reach? How quickly does the hot water flow? Do any of your rooms get a little drafty in the winter? Are there some awkward seating locations in the dining room? I’m a vegan, what can I have for breakfast? How does the TV remote work?
What is the best nature walk in the area? Where is the best casual lunch spot? If I am taking a fall foliage drive, where should I stop along the way? My wife wants a massage, where can she go? My husband wants to play golf, where should he go? I forgot my coat, is there a nice boutique nearby?
Don’t take the previous owner’s word for it. You need to know the answers to all these questions and so many more if you plan to speak authentically about your property and area. Use the opportunity to sleep around… try out mattresses, linens, towels, and see the room from a guest’s perspective. You’d be surprised how many inn owners haven’t ever slept in any of their own guest rooms! You need to see your property from the lens of your guest and notice opportunities for enhancements or improvements. And while you are at it, try to take a little time to enjoy your new town and experience what a guest is coming to discover!
We hope you’ve enjoyed the series and can walk away with useful tips to help you in your journey! If you need help in the search for inns for sale, analysis of the business, or representation during the purchasing process, our team would love to help! Reach out to us today to step up a call!