My husband and I are on the cusp of retirement.
We have been talking about our future and have decided we want to run a bed and breakfast.
We are social people and don't want to put our feet up just yet, so it seems like the best fit.
We have substantial savings and ideally want to buy a place which has at least eight rooms, but no more than 12, preferably in the West Country.
What key tips can you give us when it comes to first starting up as B&B owners and is it as good an idea as it sounds?
We're ready for hard work but want to know that we are not about to play a game we can't win.
Is the UK tourism market healthy enough to support us?
We have some ideas of our own, but what are the best advertisement routes and ways to build up repeat custom?
PB, via email.
Lee Boyce, of This is Money, replies:
Many about to enter retirement will have a romantic notion of owning a business such as a B&B, pub or restaurant.
However, there is a danger of underestimating the challenge running a B&B presents. We have all watched shows such as Gordon Ramsay's Hotel Hell and Four in a Bed, where many owners of small B&Bs appear to have their head in the clouds when it comes to running a successful business.
Sure, it's social, but what about all those rooms you'll have to clean each day, the breakfasts you'll need to cook and the small DIY tasks required on a constant basis.
You'll need to be prepared – essentially, it is a 24 hour, seven days a week job, pandering to your customers' needs.
And some will be really quite picky – in the age of the internet, bad reviews are there for all to see.
In terms of the target area of the West Country, I would guess you need to be prepared for a real winter lull in customers, while in summer, you are likely to be swamped with enquiries – it is essential you get your pricing and booking policies right.
According to statistics from Smarta Business School, the B&B sector turns over £2billion per year, making it 28 per cent larger than the low-cost hotel sector, and 35 per cent of the size of the hotel sector.
I turned to expert Karen Thorne. She has run Hopton House B&B in Shropshire for the last 10 years and heads a popular two day course for wannabe B&B owners.
Beautiful business: Running a B&B can be both financially and socially rewarding, when done right. Pictured, a B&B in St Ives, Cornwall
She replies: Running any B&B is hard work and one of 8-12 rooms is most definitely a full-time job for two people and you'd need other staff to help you.
Guests may need to leave early, arrive late, have an emergencies that need dealing with in the night. You'll need to be there to greet guests, make breakfasts, clean rooms, check people out. Unless you employ a receptionist this can seriously impact your retirement social life.
As with many businesses, B&Bs have suffered during the recession, but anecdotal evidence seems to show that business has improved this summer.
However, B&Bs are particularly prone to external factors such as the economy, weather and even occasional outbreak of foot and mouth. So it's worth bearing in mind that one good year doesn't mean the next will be the same.
The most important thing to consider is location. Do your research, understand the area you want to set up in, find out the average occupancy rates, get to know your potential market and set up a B&B that meets its needs.
While B&Bs in some areas are thriving, others are not doing so well. And bear in mind that many B&Bs are very seasonal.
B&B owners work at full steam all summer and things can quiet down in the winter months – again dependent on location.
It's important to realise that any size of B&B is governed by current legislation.
For example, you need to understand if you need entertainment licenses if you play music to guests over breakfast and what you do if a guest is a no show.
A must read is the VisitEngland Pink Book – Legislation for Tourism Accommodation.
The 2014 version has recently been published and can be purchased by e-mailing: feedback@visitengland.org
With 8-12 rooms, your turnover is likely to exceed the VAT threshold, which is currently £81,000.
This means paying 20 per cent of everything you earn in VAT unless you're under £150,000 when you can opt for the flat rate scheme which is 10.5 per cent for accommodation businesses.
One of the first things you need to do is to find a good accountant who is used to dealing with accommodation businesses. They will advise you how to structure your business and discuss VAT registration with you.
The way you market a tourism business is changing all of the time. Obviously the internet is really important these days. You must invest in a really good website with great photos.
The website needs to be easy to use and viewable on mobile phones and tablets. Online availability and booking is essential. Freetobook is a very popular, easy to use, online booking engine.
Increasingly people are using the online travel agencies such as Booking.com to book B&Bs. They can drive a lot of business but bear in mind that they charge a commission on every bookings.
For Booking.com this currently 15 per cent. A system like Freetobook can connect you directly to the online travel agents so that you aren't maintaining lots of online booking diaries, which increases the risks of double bookings.
Social media is a great way to promote your business. Set up a Facebook business page and Twitter account. They are excellent ways of finding new guests and also keeping in touch with those all-important repeat guests.
You should also collect guest's email addresses - with their permission - and send a regular newsletter to people who have stayed with you before.
There are also the most traditional routes like advertising in guide books such as Sawdays Special Places to Stay.
Not easy: Running a B&B requires plenty of hard work. Pictured, Maria and James, B&B owners who appeared on Channel Four programme Four in a Bed
Many people use review website TripAdvisor to find accommodation. And even if they find your B&B another way, most people then double check the reviews via TripAdvisor.
You can get a free basic listing on TripAdvisor or you can opt for a paid business listing which will include your contact details.
You need to be quite resilient when it comes to reviews and be prepared for getting bad ones. It's important you respond to these reviews in a positive way. Just a few negative reviews can impact a B&B business if they're not dealt with quickly and in a constructive way.
You also need to consider whether you want to be assessed by VisitEnglands Quality Assessment Scheme and get a star rating. This can be very useful, especially for newer business.
Lee Boyce adds: On top of all the advice above, if require need a mortgage to make your B&B dream a reality, you need to consider what type you need.
David Hollingworth, of London & Country Mortgages, says it is a commercial mortgage which is required. You will need a solid business plan to show lending could be sustained.
He adds that if it was on a smaller scale there might be an option on a residential mortgage - although this option is likely to be restricted. For example, Nationwide will allow a bed and breakfast where no more than two bedrooms are allocated to paying guests.
It is also important to make sure you have insurance.
Hotel hell: If you don't do your research, running a B&B can be a financial disaster. Pictured, Gordon Ramsay starring in television show Hotel Hell
Source: the Mail
More info:
http://www.dailymail.co.uk/money/mortgageshome/article-2664345/Six-golden-rules-taking-houseguests.html
http://www.dailymail.co.uk/money/mortgageshome/article-2663774/One-five-fear-having-local-area-high-property-values.html
http://www.dailymail.co.uk/money/experts/article-2661220/Why-estate-agents-ask-cash-buyers-Is-sign-wrong-property.html
