Manager for Bed and Breakfast? Workable?

Question

Hi Folks,

I am looking at the possibility of expanding my portfolio via leasing a B&B. I am well aware how much work a B&B involves and whilst I am only too happy to do the work in the short term (months ) to get the thing moving the way I want it (exisiting business), I dont want to be held down 24 hrs a day seven days a week.

I am looking to employ a person or a couple to look after the BandB for me and I act as marketeer/strategist for the business whilst they do the day to day running. Has anyone ever empoyed anyone other than family in a B&B business that they could then operate at arms length?

How did you find them?
How did you pay them?
How much did you pay them?
What are the down sides/dangers?
Did you have an exhaustive contract of employment or back of an envelope agreement?

I'd love to hear from anyone who has done this so i could learn more. Many thanks in anticipation.

Aaron Mazzrillo · Answer

A family friend runs a B&B ranch in Arizona for a gentleman who lives in NYC. They live there full time and manage the place. It is just like any other business. You need to find the right people, watch the bottom line, and make sure the clients are treated very well. They weren't the first to run the ranch and they won't be the last, but you never know. They seem to like it.

He has a degree in hotel management, so maybe look at community colleges that offer education along those lines. If it is more on the affordable side, maybe find an able bodied person/couple who wouldn't mind living there full time and doing the cooking as well. I find the best way to get good people to work for you is to recruit them vs. putting an ad out and dealing with randoms all day long. Hit up some other B&Bs (tax deductable work expense) and look for someone you can move over to your business.

Biggest risk like any business is employee theft and liability. I'd make it a cashless business, credit cards only. That will certainly help cut down on losses.

Karen Margrave · Answer

There are several different sites devoted to Innkeepers, etc. I ran across them when researching starting a B&B Inn. There are many couples that are experienced innkeepers looking for employment.

Bill Gulley · Answer

Good point Joel, that's probably why some folks buy a business, improve it, sell it and finance it to employees and owner operators.

Joel Owens · Answer

This is an interesting topic. I think it boils down to placing capital to get a specific return and what is involved with that.

I run into the same issues. You have money and want to invest but at the same time need to be an absentee owner. I have looked at buying distressed small businesses or business that are doing well but have good owner financing terms. The problem is the small businesses base income off of the owner operator and the relationship they have with their customers. So once you have to hire a manager and other items that take a bunch of time the return doesn't seem as nice.

As just purely an investment I have heard larger businesses allow you to run effectively as an absentee owner not involved in every facet of the business day to day. What investors want is an INVESTMENT and not a DAILY JOB. Maybe if you scaled up to a large B and B with more infrastructure you could buy it on auto pilot and still check in from time to time. Your business model needs to build in performance bonuses that are substantial. If someone is living there and gets a set fee income then many have little motivation to run the business or grow it to it's top potential. If the bonus is too small then the perceived work to reach the small return will not be worked for.

So I wouldn't look at what the B and B does now but what the return would be based on your costs as an absentee owner with extra systems and bonuses in place and offer your purchase price accordingly.

Bill Gulley · Answer

Having financed hospitality properties, including the B&Bs, I have seen small operations ruined by employees with absentee owners.

A couple usually works best, nothing against old folks but they usually don't have the energy. The "he" is usually a great maintenance guy able to keep the place up, including not only the building but any pool, jacuzzi, and other amenities. The "she" is usually a good office type, great at meeting the public and aware of the needs of your clients. I'd say, in reality, they are hard to find as many talk a good talk to land the job, usually providing free residency, but they seem to run out of steam just as you probably have. Really young employees may not have the social experiences to address the expectations of middle age and older clients, IMO, one young couple I recally at a B&B at the lake thought nothing about allowing parties to go well into the morning hours upsetting other clients. Guess it would depend on how well you trained your staff too.

Personalities will be very important.

I'm in a recreational area, (Branson Missouri) which is rather seasonal, that doesn't mean you won't need management and maintenance through out the year, so a strict commission based compensation might be hard to do. If you are not open all year with a decent vacancy, you might consider a lower pay and part time effort allowing your employees to seek other employment in the off season, if you can arrange such other employment for them, such as a motel, all the better.

Employees that have good credit will, by experience, be less likely to rip you off, allowing tenants off the books paying in cash. One owner required a credit card refusing cash payments.

Drugs can be an issue, having your place turn into a one stop shop is obvious, background checks must be done.

I know nothing about UK employee policies, you need a written policy here to stay out of trouble with employees, I'd say see an attorney.

Those I have been associated with have had high turnover, after a season or two they tend to move on. The best one I knew in a B&B cabin setting (only had a small breakfast and week end cook outs) was a nurse who worked at the hospital while living at the property and her husband was a great guy who could do it all, they lasted about 5 years before moving away.

BTW, these were loans and deals that I was personally vested in, thus my personal oversight included the secret shopper vists and stays.

You're in a tough business IMO! Not sure how you rely on repeat business, but such was critical in this market. If you're 5 miles from Disney Land, none of this may matter! Good luck

Robin Ferrier · Answer

Thanks folks much obliged . There are some really good ideas and thoughts there. Knew I could rely on you to come up with the answer.

Karen Margrave · Answer

You definitely need to get up to speed on the requirements in the area where the inn is located. In some areas the owner/innkeepers are required to live on site, and other areas allow paid managers, etc. Once again, browse online to get info on B&B's, and Innkeeping.

Jean Norton · Answer

I'm not sure if this will work for you, but the one time we found this successful was a friend in need of a place to live.  She lived there for free and I think we paid her 20% commission.  I did the online marketing.  This was a trustworthy person and we had no issues.

There was another time where he rented the whole structure to a lady for her to run the bed and breakfast - it's another model that didn't quite work out so well.  Good luck!

Manager for Bed and Breakfast? Workable?

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