How to Start a Bed and Breakfast in Ontario

General information for potential entrepreneurs wishing to start a Bed and Breakfast.

TABLE OF CONTENTS

1. Basics To Getting Started
2. Industry Overview
3. Regulations
4. Financing
5. Managing Your Operation
6. Associations
7. Resources and Web Sites of Interest 

1. Basics To Getting Started

Starting a business can be a rewarding undertaking, but it comes with its challenges. Before starting a business in Ontario, it is wise to do your research. There are several issues to consider such as regulations, financing, and taxation, managing your business, advertising and much more.

• Business Start-Up Info-Guide
• Financing for Starting a Business Info-Guide
• Taxation Info-Guide
• Employment Regulations Info-Guide

2. Industry Overview

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.

Source: Statistics Canada; North American Industry Classification 1997 (721191): Bed and Breakfast

Questions to ask when starting a bed and breakfast:

Source: Running your own bed and breakfast guide; Elizabeth Gundrey; 1989

Accommodations Rating Services

An Accommodations Rating Program is defined as "the rating of like accommodations based on the basics of cleanliness, comfort and safety, as well as the extent and quality of facilities and amenities." Participating properties are inspected and rated to ensure they meet consumer expectations. Ratings are based on extent and quality of facilities, services and amenities. The higher the star rating, the more extensive are the facilities, guest services and amenities.

(Note: The majority of lodging properties are in the 2 to 3 star range; there are only a handful of 5-star properties in all of Canada.) If you wish to have your establishment rated, contact your local bed and breakfast association for a listing of Canadian companies who offer this service in your province.

Planning Your Business

What is a Business Plan?

A business plan is a recognized management tool used by successful and/or prospective businesses of all sizes to document business objectives and to propose how these objectives will be attained within a specific period of time. It is a written document, which describes who you are, what you plan to achieve, where your business will be located, when you expect to get under way, and how you will overcome the risks involved and provide the returns anticipated.

Why Do I Need One?

A business plan will provide information of your proposed venture to lenders, investors, and suppliers to demonstrate how you plan to use their money, and to establish a basis for credibility of your project. This plan will serve as a guide to the various areas that you as a manager will be concerned with. As you work through this plan, adapt it to your own particular needs.

For further information:
see the document Business Plan Guide

Interactive Business Planner (IBP)

The IBP is a computer software program that uses the capabilities of the Internet to assist you in preparing a 3-year business plan for a new or existing business. The IBP will help you write your business plan, provide a format for writing your business plan, and take the information you enter and prepare financial projections for you.

For further information:
visit the web site:  Interactive Business Planner
see the document Interactive Business Planner (IBP)

3. Regulations

Business Regulations Info-Guide

This document will assist you in navigating federal, provincial and municipal regulations that apply to a number of industries and businesses.

For further information:
see the document Business Regulations Info-Guide

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

Canadian Food Inspection Agency (CFIA)

The Canadian Food Inspection Agency contains a lot of information on food safety, including food safety tips.

For further information:
please call 1-800-442-2342 or 613-225-2342
visit the web site:  Canadian Food Inspection Agency

Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA)

The Ministry of Agriculture, Food and Rural Affairs web site contains a lot of information on food safety, including information on the Food Safety and Quality Act.

For further information:
please call 1-888-466-2372
visit the web site:  Food Safety Research Program  

Ontario Ministry of Health and Long-Term Care (MOHLTC)

The Ministry of Health and Long-Term Care web site contains a lot of information on Health Issues, including locations of Public Health Units and publications on food and water safety.

For further information:
please call 416-314-5518 or 1-800-268-1154
visit the web site:  Publications: Food Safety

The Smoke-Free Ontario Act

As of May 31, 2006, the Ontario government is prohibiting smoking in all enclosed workplaces and enclosed public places. The legislation will also strengthen measures to ensure only those 19 years of age and older can buy cigarettes and will phase out the display of tobacco products, with a complete ban beginning May 31, 2008.

For further information:
please call 416-326-4846
visit these web sites:
Ministry of Health Promotion
Smoke-Free Ontario Act

Building and Fire Codes

Ontario Building Code and Municipal Building Department

A business location is subject to inspection by the Municipal Building Department to make sure that it meets local safety requirements, such as those designated by the Ontario Building Code and the Ontario Fire Code. Most municipalities require a building permit before alterations or new construction begins. It is extremely important, therefore, that you check zoning regulations before signing a lease, and obtain the necessary building permit(s) before beginning alterations or new construction.

For further information:
visit the web site:  Hotel Fire Safety Requirements

Municipal Requirements

One area of rules and regulations that all businesses must comply with is that of licenses, permits and regulations. When creating a company, the entrepreneur must contact the municipality that the business will be located in.

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.

For further information:
visit the web site:  Association Municipalities of Ontario
see the document  Municipal Requirements to Start a Business

Music License

Performances of music in public, i.e. offices, stores, etc., require a licence. This licence is necessary whether the music is performed by live or recorded means.

For further information:
please call 416-445-8700 or 1-800-557-6226
visit the web site:  Society of Composers, Authors and Music Publishers of Canada (SOCAN)

Additional Regulations and Acts

Tourism Act

Travel Industry Act

Health Protection and Promotion Act

Smoke-Free Ontario Act

Loi sur les aliments et drogues

4. Financing

The Canada-Ontario Business Service Centre has created documents, which provide an overview of some of the main financing options for individuals starting and operating a business in Ontario, including programs offered or supported by the government

• Financing for Starting a Business Info-Guide
• Financing for Established Businesses Info-Guide

5. Managing Your Operation

Dealing with Business Taxes

All businesses must be aware of the various taxes that may apply to their product or service. Depending on the type and location of products or services being offered, federal, provincial and/or municipal business taxes may apply.

For further information:
see the document: Taxation Info-Guide

Insurance

Insurance needs for businesses vary greatly. It is best to choose an insurance agent or broker familiar with your size of business and, in particular, an agent familiar with your type of operation. If you don't have an insurance agent, you may wish to ask other business owners in your area to recommend one.

The following list is included to remind you not to overlook the complex areas of business insurance. It is best, however, to discuss your specific requirements with your insurance agent.

Basic insurance:

• fire insurance (extended coverage on buildings and contents);
• liability insurance (depending on the type of business);
• burglary protection (theft coverage);
• dishonesty insurance (covers thefts by employees).

Marketing/Advertising

Whether you have a small bed and breakfast or a large one, you must tell people who you are, where you are located and how to contact you. Some methods of advertising include placing ads in local newspapers, on radio, sending out direct mail pieces and brochures and including your business information with any local tourism initiatives in your region. Outdoor signage and word of mouth can also be effective means of advertisement.

For further information:
see these documents:
Ways to Promote Your Product or Service
Do You Know the Results of Your Advertising
Advertising Do's and Don'ts

Signage

The Tourism-Oriented Directional Signing (TODS) program is administered by Canadian TODS Limited, a private company, under the supervision of the Ministry of Economic Development and Trade - MEDT and the Ministry of Transportation of Ontario - MTO.

TODS are a new type of sign, to be placed on Ontario's provincial highways. If you are an eligible tourism operation and sign space exists, you can apply for a sign bearing your operation's name, a generic symbol (or in some cases your corporate logo) and directional information. The signs are directional rather than for advertising.

The Logo Sign System is separate from TODS. This system pertains to signage for motorist services near highways. These signs would have symbols for overnight accommodation, service stations and restaurants.

For further information:
please call 905-851-1322 (Woodbridge) or 1-888-263-9333 Ext. 101

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.

For further information:
see the document Selecting Professional Services

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

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

Basic 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 specify only that there 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

Setting Up a Pay System

Pay administration is a management tool that enables you to control personnel cost, increase employee morale and reduce work force turnover.

For further information:
see the document Setting Up a Pay System

Setting the Right Price

Setting the right price is important in ensuring the success of your business. In the end, the right price for the service is the price that the consumer is willing to pay. Correct pricing decisions are key to successful business management.

For further information:
see the document Setting the Right Price

Choosing Your Location

Choosing the right location for your business is important. A location will depend on the needs of your business, where your customers and competitors are, and such things as taxes, zoning restrictions, noise and the environment. For most businesses, an appropriate location is critical.

For further information:
see the document: Store Location - "Little Things" Mean a Lot

Furnishings and Equipment

When furnishing a bed and breakfast, here are some items to consider:
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, a clock radio, hangers, locking door and a posted rate card;
• invest in good quality mattresses; and
• consider extras such as a full-length mirror, luggage racks, writing materials, newspapers, brochures describing local attractions or a listing of local restaurants.

Linen

• Have at least three changes of linens, particularly if you send laundry out; and
• use new bedspreads, throw blankets, blankets, sheets, pillow cases and allergy-free pillows.

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 name plate on the outside of a locking door.

Lighting

• Install wall outlets and lights near beds, mirrors, desks and chairs.
• Pay attention to the importance of lighting - diffuse light evenly through the room, avoid harsh overhead lighting and provide reading light on each side of a double bed.

Flooring

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

There will be certain equipment and furniture you will need in your place of business which will allow you to perform your services. It is suggested to make a list of the required equipment and its cost to you. An important factor to consider, when choosing equipment, is the after-sales service and repair, and their affordability.

Leasing Equipment - An alternative is to lease equipment to help keep start-up costs down. To obtain financing for capital leasing for new or used equipment for the creation of your business, see the document Capital Leasing Pilot Project.

For further information:
see the document Business Plan for Small Service Firms

Cost Control

You must have procedures for controlling inventory and costs. Ask people in your industry for information about procedures for:

• Purchasing - Most of the time, purchasing is done over the telephone, by fax or online. Often no contract is signed between the purchaser and the supplier; it is essential that you choose your supplier carefully.
• Receiving - Check all deliveries against the Purchasing and Receiving Form, in three ways: quantity, price and quality. Make sure specifications are met. Careful recording will show short shipments, price variations and weight differences.
• Budgeting and Projecting - Establish a cash budget and maintain cash flow projections on a continual basis.
• Storage - Ensure refrigerated and frozen products are quickly placed in a cold storage.

Storage temperature for dry goods (between 10-21oC) and frozen goods (-18oC or less). Rotate your stock to ensure that oldest items are used first before the new stock.

Making a profit is the most important -- some might say the only objective of a business. Profit measures success. It can be defined simply: revenues - expenses = profit. So, to increase profits you must raise revenues, lower expenses or both. To make improvements you must know what's really going on financially at all times.

For further information:
see the document Checklist for Profit Watching

6. Associations

Although it is not necessary to join a bed and breakfast association, there can be advantages in becoming a member in these industry associations. In general, bed and breakfast associations will:

• promote bed and breakfasts as an accommodation choice;
• promote and exchange marketing and promotional ideas among members;
• promote and encourage cooperation on vacancy referrals among members;
• establish and encourage high standards of quality and professionalism;
• represent and advocate on behalf of members.

For further information:
visit the web site:  Bed and Breakfast Associations

Canada Select - Rating Program

An Accommodations Rating Program is defined as "the rating of like accommodations based on the basics of cleanliness, comfort and safety, as well as the extent and quality of facilities and amenities."4 Participating properties are inspected and rated to ensure they meet consumer expectations. Ratings are based on extent and quality of facilities, services and amenities. The higher the star rating, the more extensive are the facilities, guest services and amenities. (Note: The majority of lodging properties are in the 2 to 3 star range; there are only a handful of 5-star properties in all of Canada.) If you wish to have your establishment rated, contact your local bed and breakfast association.

For further information:
visit the web site : Canada Select

7. Resources and Web Sites of Interest

Additional resources which may help bed and breakfast owners include, but are not limited to:

Statistics

Tourism Stats and Figures

Statistics Canada

Provincial and territorial statistics offices

Ministry of Tourism

Travel in Ontario

E-commerce Overview Series: Tourism Accommodation Sector in Canada

Web Sites of Interest

Travel Industry Council of Ontario
The Travel Industry Council of Ontario is an organization mandated by the Ontario Government to administer the Ontario Travel Industry Act which governs approximately 3,000 travel retailers and travel wholesalers registered in Ontario.

Canadian Tourism Human Resource Council
The Canadian Tourism Human Resource Council (CTHRC) is a national non-profit organization that promotes and enhances professionalism in the Canadian tourism industry.

Canadian Tourism Commission
The CTC provides Canada's tourism industry with the tools and strategic information it needs to succeed. The Commission coordinates the trade relations and marketing activities of all the key players in Canada's tourism industry to help them capitalize on this country's potential as a high-demand travel destination.

Ontario Tourism Marketing Partnership
The OTMPC collaborates with tourism partners and colleagues at home and internationally to develop and deliver exciting, integrated, research-driven marketing programs that reinforce Ontario as a strong tourism economy and a premier, four-season travel destination.

Retail Merchants Association of Canada Inc.
The Retail Merchants' Association is run by retailers for retailers, and offers a broad range of programs designed to keep independent retailers strong and profitable and provides an online advertising initiative called Real-time Merchant Advertising . Association members can also be eligible for lower credit card merchant discount rates.

For further information:
call 416-293-2100

Tourism Daily News

Need more information?

Click: Canada-Ontario Business Service Centre
Call: 1-800-567-2345
Visit:  visit our  Regional Access Program Locations page to locate an office near you

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Some of the organizations listed above are not subject to the federal Official Languages Act or the French Language Services Act of Ontario. Their services may not be available in both official languages.

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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.

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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.