Starting a Bed and Breakfast

This document is a guide prepared by the Canada-Saskatchewan Business Service Centre and is intended to provide you with general information and suggested resources to assist you in researching your project. The extent to which this information will apply to you is dependent upon the circumstances related to your project.

For further information on individual topics identified herein, contact the respective governing body or the Canada-Saskatchewan Business Service Centre. Because this document is only meant as a guide, the Business Service Centre will not accept responsibility for business decisions made based on the information provided.

Before proceeding, reference should be made to the Business Start-up Info-Guide, which covers the basic steps involved in establishing a new business in Saskatchewan; as well as the document titled A Current Index of Business Fact Sheets. These fact sheets cover a wide variety of business topics. Be sure and also request the Sources of Information and Required Licenses for your area or view these on our Business Fact Sheets Web site.

TABLE OF CONTENTS

• Industry Overview
• Licenses and Regulations
• Managing Your Operation
• Associations and Contacts
• Resources
• Recommended Books in Our Library
• Video Collection
• Recommended Internet Web Site

INDUSTRY OVERVIEW

Bed and breakfasts, country vacations and country inns offer other choices of accommodation to customary hotels and motels.

• Over the last few years, the demand for this type of operation has been increasing.
• Most of these establishments are started as a hobby or to supplement a family's primary income such as a retirement or farming income.
• Customers are usually tourists of all ages (couples, families), but can also include business travelers, single women traveling alone or people transferred to an area seeking temporary lodging.
• These operations offer a warm, homey setting and a way to learn about an area and its history from friendly, well-informed hosts.
• Many of the most successful Canadian bed and breakfasts are in major cities.

Before starting:

• You must like being with people, have good conversational and listening skills, and enjoy hosting visitors from around the world;
• You should also enjoy keeping a neat and clean home, be well-organized and understand the basics of managing, accounting and bookkeeping;
• Do your research. Analyze the demand for your services, who your competitors are, what will set you apart from them and how you will advertise; and
• Do not expect big profits for these are not get-rich-quick operations. For example, a well-established operation may earn $16,000 in annual revenues. It may take two to three years to become established.

SIC codes
Canadian 1980 standard industrial classification codes for various industries.

Sample SIC Codes:

• 9114 Guest Houses and Tourist Homes - Establishments primarily engaged in renting rooms, with or without board, to transient guests.

NAICS codes
A few years ago, the statistical bodies of Canada, the U.S. and Mexico got together to come up with a classification that was the same for all three countries, so that data collected in all three countries on a specific industry could be compared accurately across country boundaries. This system is called the "North American Industrial Classification System" or NAICS (pronounced "nakes").

Sample NAICS codes are :

• 721191 Bed & Breakfast - This Canadian industry comprises establishments primarily engaged in providing short-term lodging in facilities known as bed and breakfast homes. These establishments provide guest rooms in private homes or in small buildings converted for this use, and they often possess a unique or historic character. Bed and breakfast homes are characterized by a highly personalized service, and the inclusion, in the room rate, of a full breakfast, served by the owner or owner-supervised staff.

Types of Bed & Breakfasts

Bed & Breakfasts

• Operate out of family homes of various size and vintage, from quiet city neighbourhoods to small towns;
• Usually have a maximum of four guest rooms;
• Operate year-round; and
• Offer full/continental breakfasts.

Country Vacations

• Operate out of family homes, usually on an acreage used for farming, ranching or horse-back riding; and
• Cater to tourists or interest groups.

Country Inns

• Quality establishments with the personal touch of a bed and breakfast in a traditional, classical atmosphere;
• Provide three meals per day and private dining/sitting areas;
• Usually open year-round and have a well-established marketing program; and
• Often feature wonderful cuisine, spas, hiking trails or spectacular views.

LICENSES AND REGULATIONS

One area of rules and regulations that all new businesses must comply with is that of licenses and regulations. When creating a business, the entrepreneur must contact the municipality involved, along with the provincial/territorial and federal governments.

Each municipal government has the authority to issue its own business licenses within its jurisdiction. Since there is no uniformity throughout the country regarding municipal licenses for businesses, you should consult with the appropriate local officials to determine whether your business will be affected by local regulations and licensing requirements. Businesses (including home-based businesses) must also meet the zoning by-laws that control property uses in their municipalities.

Examples of licenses and regulations that could apply to you when starting your business may include, but are not limited to:

Liquor License
You will require a liquor license in order to sell beer, wine and spirits. The fee for a Liquor License varies by license type. You should investigate the possibility of being granted a Liquor License (and Municipal Business License) before investing any money in setting up the business. The likelihood of obtaining these necessary licenses depends on zoning bylaws of the city or town, the number and proximity of other licensed establishments, as well as other criteria.

For further information regarding liquor licensing, contact the Liquor Licensing Commission toll-free at 1-800-667-7565.

Health Regulations and Requirements
All Bed and Breakfasts must comply with specific Health regulation requirements. In order to begin business operations, the establishment must pass a mandatory health inspection.

For further information regarding Health Regulations and Requirements, see the document A Current Index of Business Fact Sheets and choose the Sources of Information and Required Licenses for your area, from which you can locate the Public Health Inspectors in your region, or contact the Canada-Saskatchewan Business Service Centre for the nearest provincial Public Health Inspector.

Regulations
Find out about licensing requirements and zoning restrictions. If you have more than four guest rooms, you may be taxed as commercial rather than residential. Contact a lawyer about legal issues. Bed and breakfasts and country vacations are often operated as partnerships between spouses. Draw up an agreement before you begin, covering who is responsible for repaying start-up costs and what happens if the business dissolves or if a partner leaves or dies; and contact your insurance agent to make sure you have adequate liability -- one lawsuit could devastate your personal finances. Shop around.

Saskatchewan Bed and Breakfast Association (SBBA) Standards:

1. Urban and Rural Yard Standards - yard must be well kept, safe and attractive;
2. Animals and Pets - publicly accessible pet facilities must be clean and well maintained;
3. Accommodation Standards - external accommodation units must be neat, clean and attractive In-house accommodations must be set up as true guest rooms;
4. Food Standards - wholesome, well prepared meals are expected for guests;
5. Safety Standards - home and yard must be kept in good repair, and all hazards must be clearly identified;
6. Hospitality Standards - anticipated guests needs; and
7. Marketing Standards - as your advertising techniques reflect on the Association, it is necessary to ensure that all advertising be accurate.

Special Services
Some operations increase their revenues by offering special services:

• Offer lunch or dinner to bed and breakfast guests;
• Provide Internet access, fax machines, private phones, televisions;
• Install spas or hot tubs; and
• Open small gift or gardening shops, or sell crafts or preserves.

Location
Choosing a location may be your single most important decision. Do your research. Look at population trends and business climate. Check statistics on traffic counts, community characteristics and demographics. Consider six key factors: regulations, costs, accessibility, parking, the neighbourhood and the competition.

For further information regarding Location, see the document Store Location - "Little Things" Mean A Lot .

Layout and Design
Your bed and breakfast's character and the sight and aroma of freshly baked goods can entice people to buy, especially on impulse:

• Present the entire assortment of goods in an area that is as large as possible.
• Select furnishings to properly display products under excellent lighting.
• Design an efficient and inviting counter area.
• Consult equipment manufacturers for their guidance and layout suggestions.

The federal Competition Act governs misleading advertising and deceptive marketing practices for all businesses in Canada. The Act defines which marketing practices are illegal and the process of complaint investigation. For more information see the document Competition Act - Misleading Advertising and Deceptive Marketing Practices or refer to the brochure on this subject administered by Industry Canada online -  Misleading Representations and Deceptive Marketing Practices, or visit the Competition Bureau's Web site. 

The Online Small Business Workshop - Marketing Basics listed in Session 2, covers the basics from developing your customer profile to promoting your business.

Market Research
Successful businesses have extensive knowledge about their customers and their competitors. Acquiring accurate and specific information about your customers and competitors is a critical first step in market investigation and development of a marketing plan.

In developing a marketing plan, your primary functions are to understand the needs and desires of your customer, select or develop a product or service that will meet customer needs, develop promotional material that will make the customer aware and ensure product or service delivery.

For further information regarding marketing see the document Market Analysis, or the document Guide To Market Research and Analysis, or the document Marketing Plan Outline, or the document  Recommended Information - Demographics/Statistics.

For more information on marketing and advertising refer to our web site: Links Sectors and Business Fact Sheets..

MANAGING YOUR OPERATION

Insurance
As a Bed and Breakfast business, it is necessary to carry liability insurance. There are many options when purchasing this insurance. If you chose to purchase from Saskatchewan Government Insurance (SGI), you are required to be a member of the Saskatchewan Bed and Breakfast Association. If you own, rather than lease your place of business, you will need insurance coverage for your property. Also regardless of property ownership, you should be concerned about liability coverage against mishaps, damages and lawsuits resulting from business operations and business interruption insurance.

Accounting/Bookkeeping
A good record keeping system should be simple to use, easy to understand, reliable, accurate, consistent and designed to provide information on a timely basis.

Note: All staff working with cash should be trained to recognize counterfeit currency.

The legal requirement concerning financial records specifies only that they be a permanent, accurate and complete record of your daily income and expenses. There are many types of record books and bookkeeping systems available. For example:

• double entry bookkeeping;
• commercial bookkeeping systems;
• one-write systems;
• computerized systems;
• single entry bookkeeping.

For further information see the document Basic Bookkeeping or the document Bad Cheque Control.

Advertising
Bed and Breakfasts that wish to, can advertise in the Tourism Saskatchewan Accommodation and Campground Guide. In order to be listed in the guide, you must contact Tourism Saskatchewan's Director of Membership and Visitor Services.

A Bed and Breakfast kit is available at the Centre. The kit contains information on how to start and run your Bed and Breakfast, child safety and other safety guidelines. The kit includes a brochure on the Saskatchewan Bed and Breakfast Association (SBBA), an SBBA newsletter, SBBA By-Laws and an information package on the Association. There is also a Farm and Food Report, an overview of the development of a guest ranch, and a list of magazines that you might be interested in subscribing to. Also included are lists of Provincial Health Inspectors and Provincial Fire Inspectors. To receive a B & B kit in the mail, please call the Canada-Saskatchewan Business Service Centre toll-free 1-800-667-4374 or 306-956-2323.

For further information regarding advertising, see the document Signs And Your Business or the document Plan Your Advertising Budget, or the document Advertising Do's And Don'ts, or the document  Ways To Promote Your Product Or Service.

Internet
If you are planning to have a Web site you should have details to describe the location (your Bed and Breakfast's address, telephone and fax numbers, and directions on how to get to your establishment), hours of operation, menus, and anything else you think may be of interest to potential customers. However, once you launch a Web site, you must update it on a regular basis.

For more information on this subject see the document E-Business Info-Guide, see the document E-Commerce - Exploring Your Options or visit the E-business Sask. section on our Web site.

Human Resources
Your commitment and investment in human resource development will be a key component of your overall marketing plan. Standards, training and certification programs are available for a number of tourism-related occupations through the Saskatchewan Tourism Education Council.

For further information regarding Human Resources, contact Saskatchewan Tourism Education Council at 306-933-5900 or see the document Improving Personal Selling In Small Retailer Firms, see the document Understanding and Developing Your Sales Force or see the document Measuring Sales Force Performance.
 
Selecting Professional Services
The use of professional services is essential to the success of a small business. Professionals can provide knowledge and expertise in the areas where you may have little. They can round out your management team to ensure your business is operating efficiently.

As an entrepreneur, there are four main areas of professional services with which you may consult:

1. lawyer (contact a lawyer about legal issues);
2. insurance broker;
3. accountant;
4. banker - for tips and pointers on dealing with your bank, see the document Dealing With Your Banker & Other Lenders.

Furnishings

• Bedrooms
  Each guest room should have a double, queen or twin bed(s), bedside tables, dresser or writing table or combination, mirror, easy chair(s), desk chair, bedside rug, window screens and coverings, closet, smoke detector, wastebasket, locking door and a posted rate card; and consider extras such as a clock radio, full-length mirror, luggage racks or local newspaper.

• Linen
  For each bed, have one bedspread and throw blanket and two each of: blankets, sheets, pillow cases and allergy-free pillows; and if you send laundry out, have at least three times the amount of linen in use.

• Bathrooms
  For each person, provide a bath towel, hand towel, face cloth, wrapped soaps and drinking glass (paper cups in shared bathrooms);
  Install towel racks and good lighting near bathroom mirror;
  Remove or lock away all personal belongings, medicines, cleaning solutions, toxic or hazardous substances; and
  Put a nameplate on the outside of a locking door.

• Lighting
  Install wall outlets and lights near beds, mirrors, desks and chairs.

• Flooring
  Ensure floors can withstand traffic;
  Use penetrating seals on wood floors and opt for inlaid instead of printed vinyl;
  Use rug under lays to prevent skidding; and
  Choose thick and heavy scatter mats so that they lie flat.

ASSOCIATIONS AND CONTACTS

Saskatchewan Bed and Breakfast Association
Membership in the Saskatchewan Bed and Breakfast Association (SBBA) maybe an option for those Bed and Breakfast owners that wish to belong to an association. As a member, you will receive a newsletter, free distribution and display of your materials, to be listed in the SBBA Directory and on the SBBA Web site and be highlighted in Government tourism material. Some of the benefits are co-operative advertising, networking and the creditability often affiliated with membership in an association.

For further information regarding Associations, contact the  Saskatchewan Country Vacations Association  (SBBA) at 306-731-2646 (Lumsden) or for general information regarding Associations, see the document Selecting a Business Association.

Note: The Bed and Breakfast Country Vacation Information Guide is available through the Saskatchewan Bed and Breakfast Association for $25.00.

RESOURCES

Small Business Profiles - Performance Plus

Performance Plus provides detailed financial and employment data on small businesses by industry for Canada, the provinces and territories. The Profiles have been produced every two years since 1985, with 1997 being the most current reference year available. The data provide performance benchmarks for the financial planning of start-up and established small and medium sized businesses. See description under Industry Overview in this document to determine which type of business you will operate.

KOB Files
Saskatchewan Industry and Resources created "kinds of business (KOB's)" that include information on many different types of businesses. This information includes: product sources; fixture & equipment suppliers; trade shows; trade associations; trade journals; and other market data sources. Choose a KOB from the Table of Contents of the CSBSC's  Kinds of Business  Web site.

The CSBSC also has files started on various kinds of business topics such as restaurants, bars, coffee shops. Information located in these files includes possible suppliers, statistics, sample business plans, etc. To access the information in these files please come into the office and request the KOB file or speak to a Business Information Specialist.

RECOMMENDED BOOKS IN OUR LIBRARY

Canada-Saskatchewan Business Service Centre resource library search engine can be viewed on the Saskatoon Reference Library Web site. Once you have located a particular resource you think might be useful, please contact us at the CSBSC office and we will discuss the material with you. Material is available to view in our Saskatoon office or regionalization site where available.
Some books of interest may include:

How to Open and Operate a Bed and Breakfast
BUSINESS B&B .002S
Henry Holt and Company
 
Open Your Own Bed & Breakfast
BUSINESS B&B .005S
John Wiley & Sons, Inc.

So You Want To Be An Innkeeper
BUSINESS B&B .003S
Chronicle Books

How to Start and Operate Your Own Bed & Breakfast
BUSINESS B&B .002S
Henry Holt and Company

Start & Run a Profitable Bed & Breakfast
BUSINESS B&B .001S-1
International Self-Counsel Press Ltd.

How to Start a Bed & Breakfast Inn (and Home)
BUSINESS B&B .004S-1
Entrepreneur Inc

Start and Run a Profitable Bed and Breakfast
BUSINESS B&B .001S-1
International Self-Counsel Press Ltd.

Internet Marketing for Your Tourism Business
SECTOR TOURISM .020S
Maximum Press

VIDEO COLLECTION

Canada-Saskatchewan Business Service Centre resource library search engine can be viewed on the  Saskatoon Reference Library Web site.

Once you have located a particular resource you think might be useful, please contact us at the CSBSC office and we will discuss the material with you. Material is available to view in our Saskatoon office or regionalization site where available. Videos and audio cassettes may be loaned out to residents in the Saskatoon area.

We have many videos available in the following categories: aboriginal, customer service, sales, marketing, training, entrepreneurship, business planning, financing, e-business, starting a business, business skills, home-based, management, intellectual property, trade, quality, computer skills, and miscellaneous. Search the A/V Library on our web site for descriptions.

RECOMMENDED INTERNET WEB SITES

More links available on our Links Sectors Web site under Bed and Breakfast

Saskatchewan Country Vacations Association 

Bed and Breakfast Associations - Canada Map    

For further information regarding starting a business, contact the

Canada-Saskatchewan Business Service Centre
#2 - 345 3^rd Avenue South
Saskatoon, Saskatchewan
S7K 1M6
Phone:(306) 956-2323
Toll-Free: 1-800-667-4374
E-mail: saskatchewan@cbsc.ic.gc.ca
Web site:http://www.cbsc.org/sask/

THE INDIVIDUAL/BUSINESS/CORPORATION/PARTNERSHIP (HEREINAFTER REFERRED TO AS THE CLIENT) ACKNOWLEDGES AND UNDERSTANDS THAT THE CANADA-SASKATCHEWAN BUSINESS SERVICE CENTRE DOES NOT WARRANT OR REPRESENT THE ACCURACY, SUITABILITY OR APPLICABILITY OF THIS INFORMATION AND ASSUMES NO RESPONSIBILITY OR LIABILITY FOR THE USE THEREOF BY THE CLIENT AND ANY THIRD PARTIES AND THAT THE INTERPRETATION, USE AND APPLICATION OF SUCH INFORMATION SHALL BE THE CLIENT'S SOLE RESPONSIBILITY.

DISCLAIMER
Information contained in this document is of a general nature only and is not intended to constitute advice for any specific fact situation. Users concerned about the reliability of the information should consult directly with the source, or seek legal counsel.

Links Policy
Some of the hypertext links lead to non-federal government sites which are not subject to the Official Languages Act and the material is available in one language only.