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Coach House Bed and Breakfast

Executive Summary

Opportunity

Problem

We have tourists that like coming to visit and explore Tybee Island. Some people think travelers just need a place to rest their head and put their stuff. Travelers need to create a home away from home. A place where they can fully recharge from their worries and travels

Solution

The Coach House guest will have every need met to ensure his/her comfort. For special occasions, catered meals, chilled wine, etc. can be provided for an additional stipend. During the weekends, guests will return to the B&B in the evening and find cheese, fruit, and wine for snacking before turning in.

Market

B&Bs, along with other short-term lodging on Tybee Island, have long been a substantial part of the island tourism. Of the short-term lodgings on Tybee, ten are categorized as inns, 19 as long-term lease facilities (rentals, condos, and houses) and only four as B&Bs, including the Coach House. Hotels/motels constitute the largest percentage of rental properties on the island in terms of units.

Ironically, at least on Tybee Island, the rise of Airbnb and its competitors have increased the demand for B&Bs rather than hurt us with more competition. People are more aware of the possibility of  non-hotel lodging. And of course we participate in this new channel with our profile and standing on Airbnb.

A modest projection for increased unit rental is 30% per year. Competitors on the island have averaged 30% + rental increases over the past three years, and the Georgianne Inn is forecasting 50% increases for the next two years before hitting full capacity. This projection is without any significant increase in advertising or exposure, but is based on the general average increase in tourism.

Our two major customer segments are tourists from the north who traditionally prefer the cozy environment of B&Bs, and local patrons who need the facilities for various events. Subscriptions to various Web services will provide international exposure to potential customers for nominal annual fees.

 

Competition

We are uniquely positioned with Airbnb. The bed and breakfast industry offers a unique lodging environment, which caters to an ever-increasing group of travelers. B&Bs create a climate of home, where guests become temporary members of a larger family. The B&B home opens itself to guests, allowing them to participate and share in the richness of a community, while still allowing whatever degree of privacy is preferred. Meals can be shared with the innkeepers and other travelers allowing new relationships to be created and old ones enriched. Or, meals can be taken in the privacy of the guest’s room.

A variety of settings available in the B&B are situated to enable individuals or small groups to locate the perfect setting for whatever mood or activity one is pursuing (reading, watching television, playing board games, etc.). In the B&B, a guest is a guest in one’s home, not a customer. It becomes a place to return to: at the end of a day, or during the next vacation (like going home).

At the Coach House B&B, guests will have the right mix of membership and privacy. Being dutiful without being intrusive is a delicate balance and one that owners have mastered in their various walks of life

Why Us?

We start with a critical competitive edge: there is no competitor we know of that can offer the convenience and luxury one will find at the Coach House. We have traveled the country and stayed in many B&Bs. We know how to create the climate that others seek when shopping for B&B lodging. We hold up very well against Airbnb competition.

Expectations

Forecast

We estimate average monthly fixed costs to be approximately $8,000 for expenses plus interest payments. Peak and off-season will have significant impact on the monthly earnings. For the first year, on-season revenues will offset off-season losses. As Coach House B&B builds its market position among the local patrons, we anticipate that off-season revenues will be enough to break even during that season.

Our far-out profitability is unrealistically high. We leave it that way knowing that other expenses will come up. We expect to revise upwards as needed.

Financial Highlights by Year

Chart visualizing the data for Financial Highlights by Year

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Opportunity

Problem & Solution

Problem Worth Solving

We have tourists that like coming to visit and explore Tybee Island. Some people think travelers just need a place to rest their head and put their stuff. Travelers need to create a home away from home. A place where they can fully recharge from their worries and travels. 

Our Solution

 The riches of Chatham County have always drawn a significant number of tourists to the Savannah/Tybee Island area. In addition to providing information about such locations, we plan to collaborate with tour agencies and businesses throughout the area by offering packages and special rates.

The mission of Coach House is to become the best choice in Tybee for temporary lodging by expanding our exposure via the new web competition (with multiple networks and links), and introducing the island to areas that have not yet discovered this year-round paradise. We plan to be more than a great bed and breakfast. We plan to create an environment of pampered luxury that surpasses the standard fare for Tybee.

Target Market

Market Size & Segments

Target Market Segment Strategy

The Marsh Hen’s history demonstrates that money can be made in this area simply by existing. We continue to see that Tybee Island, in general, is under exposed as a winter vacation destination. We plan to aggressively pursue guests from the north while introducing Tybee Island to this under-tapped market population. We also plan to use the B&B for local patrons by opening it for catered parties, receptions, etc.

Subscriptions to various Web services will provide international exposure for nominal annual fees. Committing to staying in the building to book reservations and opening the B&B to diverse groups of people will also increase bookings.

Market Needs

Similar to tourists who choose to stay in traditional hotels, customers who patronize B&Bs seek relaxation, fun and stress management while on vacation. However, this type of customer also prefers comfortable accommodations in a cozy, family environment. These patrons are more social, they love meeting new people while at the same time require enough privacy to enjoy their vacation. Coach House has all the necessary facilities to attract such customers.

Competition

Current Alternatives

B&Bs, along with other short-term lodging on Tybee Island, have been a substantial part of the island tourism. Of the short-term lodgings on Tybee, ten are categorized as Inns, 19 as long-term lease facilities (rentals, condos, and houses) and only four as B&Bs, including the Coach House (currently operating as the Marsh Hen Bed and Breakfast). Hotels/motels constitute the largest percentage of rental properties on the island in terms of units. However, the average B&B patron is not typically interested in the hotel/motel climate. That and the comparison of rates, which are substantially higher in the hotel/motel industry, do not put such facilities in the category of competitor.

Airbnb has not made significant changes in the competitive landscape. If anything, it has added demand. There are a few offerings on Airbnb that are legitimately private homes, competing with real business lodging. 

Keys to Success

Keys to Success

In order to succeed, the new management will strive to achieve the following goals:

  • Position us well with Airbnb.
  • Position Coach House B&B as the best B&B on Tybee Island among the numerous tourists.
  • Build strong market position among the local patrons.
  • Maintain sound financial management of the venture.
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Execution

Marketing & Sales

Marketing Plan

We are positioned to take advantage of the new push for new kinds of lodging with home exchange and airbnb and the like. The Marsh Hen’s history demonstrates that money can be made in this area simply by existing. We continue to see that Tybee Island, in general, is under exposed as a winter vacation destination. We plan to aggressively pursue guests from the north while introducing Tybee Island to this under-tapped market population. We also plan to use the B&B for local patrons by opening it for catered parties, receptions, etc.

Subscriptions to the booming web services platforms will provide international exposure for nominal annual fees. Committing to staying in the building to book reservations and opening the B&B to diverse groups of people will also increase bookings.

Sales Plan

Coach House will sell its rooms directly to repeat customers, as well as via traditional travel agents and through the Internet. All reservations will be handled by Mr. Maesch. Repeat customers will have the privilege of priority reservations during the high season. As mentioned above, the new owners will also list Coach House on www.worldres.com, which will make it available to millions of international tourists.

Operations

Locations & Facilities

As the B&B becomes established through the peak season, we plan to expand our services to the residents of Tybee and Savannah in time for the off-season. The adjoining rooms open creating a large area, ideal for formal or informal gatherings (i.e. wedding receptions, office parties, Christmas parties, etc.). The outdoors, with its access to the beach, a beautiful, tropical front yard, and a private deck, opens several additional opportunities. A gazebo in the front yard would make the perfect location for a wedding, as would the sand and surf for those that prefer a beach wedding. With the capability for a catered reception inside, Coach House will make the event smooth and easy for the guests. Immediate family or selected members of the wedding party would be able to stay at the B&B ,while other party members will be referred to neighboring Inns. This collaborative practice is not new to Tybee, but Coach House will be a new member in the exchange.

Tourists will want to explore the riches of Chatham County (Bonaventure Cemetery, River Street, Worms Low, Savannah’s historic district, market square, dolphin tours, the marinas, and Fort Pulaski to name a few). In addition to providing information about such locations, we plan to collaborate with tour agencies and businesses throughout the area by offering packages and special rates with in-kind incentives for the cooperating merchants, including tours originating from the Coach House.

Amenities that go beyond the typical B&B will include:

  • Pralines on pillows.
  • A complimentary music CD for each room that the guest may keep (copy included in packet).
  • An extensive video and audio library for guest use.
  • CD stereo systems and VCRs in each room.
  • Starbucks coffee.
  • A variety of herbal teas.
  • Daily fresh-baked muffins and fresh fruit.
  • Links to other businesses and services on the island and the mainland.

Milestones & Metrics

Milestones Table

Milestone Due Date
Q4 Review
Jan 16, 2019
Relaunch
Dec 15, 2020
Q1 review
Apr 11, 2021
Q2 Review
July 11, 2021
Q3 Review
Oct 15, 2021

Key Metrics

Our key metrics are:

  • # of airbnb reviews. Star ratings. 
  • # of facebook page views, and star ratings.
  • # of Google reviews, and star ratings. 
  • # of local residents who are staying here 
  • # of reviews 
  • # of rooms that are occupied 
  • # of rooms that stay unoccupied over the month 
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Company

Overview

Ownership & Structure

Coach House Bed and Breakfast is an established B&B, and has been in operation for the last three years as Marsh Hen Bed and Breakfast. After possession and a brief period of becoming established, Coach House will diverse into other ventures to ensure a steady flow of patrons (tourists and locals) through its doors.

The Coach House Bed and Breakfast will be a partnership, equally owned by John Maesch and Frank Williams. As of this writing, the decision to incorporate has not yet been made, but will be considered after the owners relocate to Georgia and establish local legal representation. Mr. Maesch will reside on the property, managing and maintaining the business and satisfying Tybee Island license requirements. Mr. Williams will remain in Indiana fulfilling his employment contract.

As the B&B becomes self-supporting, Mr. Williams will resign–transferring his retirement money to the capital reserve, relocating to Tybee, and assisting with the daily responsibilities of the B&B.

Company History

The Coach House Bed and Breakfast was originally built in 1920 and is believed to have been one of three train stations on Tybee Island, linking the island to Savannah. The station offered patrons a place to shower and change after a day at the beach before boarding for the return trip. The building has undergone a number of restorations and uses since the train service ceased operation. It currently functions as the Marsh Hen Bed and Breakfast, having begun with two rental units and one living unit, following a period of extensive renovations and improvements to the property. While open, the current owner continued with improvements (a new roof and new construction for an efficiency apartment above the existing roof). Due to continual structural improvements during the past three years, the B&B has not yet gone through a season with full operational capacity. With construction completed, it now has the potential of four rental units with owner-occupancy in an unused room.

In addition to the limitations caused by construction, Inn operators and other business members on the island have reported that the current owner lacks some of the commitment, investment, and business sense to run at a higher capacity. The current owner will often leave the building to the care of an answering machine, and categorically deny accessibility to various classes of people. The general consensus is that it has operated as a hobby and not a business under the current ownership.

The table below outlines the B&B’s performance over the last three years under the current ownership.

Team

Management Team

The Coach House will operate as an owner-occupied business. Salary for the first year of operation is indicated on the Personnel table. This salary, though low, is reasonable considering that major living expenses (mortgage, utilities, etc.) will be covered by the business.

Personnel Table

2020 2021 2022
John Maesch $48,000 $48,960 $49,939
Frank WIlliams (0.75) $12,000 $48,960 $49,939
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Financial Plan

Forecast

Revenue by Month

Chart visualizing the data for Revenue by Month

Expenses by Month

Chart visualizing the data for Expenses by Month

Net Profit (or Loss) by Year

Chart visualizing the data for Net Profit (or Loss) by Year

Statements

Projected Profit & Loss

2020 2021 2022
Gross Margin $140,034 $222,700 $318,500
Operating Expenses
Salaries & Wages $60,000 $97,920 $99,878
Employee Related Expenses $12,000 $19,584 $19,976
Rent $30,000 $30,000 $30,000
Insurance $2,640 $2,640 $2,640
Telephone $4,140 $4,140 $4,140
Security $6,000 $6,000 $6,000
Duties and Subscriptions $2,100 $2,100 $2,100
Marketing $9,600 $15,000 $25,000
Sales $7,440 $7,440 $7,440
House Cleaning $11,400 $11,400 $11,400
Amortization of Other Current Assets $0 $0 $0
Interest Incurred
Depreciation and Amortization $5,667 $5,666 $5,667
Gain or Loss from Sale of Assets
Income Taxes $0 $0 $0
Total Expenses $163,913 $222,190 $242,741
Net Profit ($10,953) $20,810 $104,259

Projected Balance Sheet

Starting Balances 2020 2021 2022
Cash $22,000 $7,396 $34,611 $145,731
Accounts Receivable $4,000 $0 $0 $0
Inventory $1,692 $2,375 $2,375
Other Current Assets $1,000 $1,000 $1,000 $1,000
Total Current Assets $27,000 $10,088 $37,986 $149,106
Long-Term Assets $200,000 $200,000 $200,000 $200,000
Accumulated Depreciation ($30,000) ($35,667) ($41,333) ($47,000)
Total Long-Term Assets $170,000 $164,333 $158,667 $153,000
Accounts Payable $20,000 $8,374 $9,796 $10,989
Income Taxes Payable $0 $0 $0
Sales Taxes Payable $0 $0 $0
Short-Term Debt
Prepaid Revenue
Total Current Liabilities $20,000 $8,374 $9,796 $10,989
Long-Term Debt
Long-Term Liabilities
Paid-In Capital $60,000 $60,000 $60,000 $60,000
Retained Earnings $117,000 $117,000 $106,047 $126,857
Earnings ($10,953) $20,809 $104,260

Projected Cash Flow Statement

2020 2021 2022
Net Cash Flow from Operations
Net Profit ($10,953) $20,810 $104,259
Depreciation & Amortization $5,667 $5,667 $5,667
Change in Accounts Receivable $4,000 $0 $0
Change in Inventory ($1,692) ($683) $0
Change in Accounts Payable ($11,626) $1,422 $1,194
Change in Income Tax Payable $0 $0 $0
Change in Sales Tax Payable $0 $0 $0
Change in Prepaid Revenue
Investing & Financing
Assets Purchased or Sold
Investments Received
Dividends & Distributions
Change in Short-Term Debt
Change in Long-Term Debt
Cash at Beginning of Period $22,000 $7,396 $34,611
Net Change in Cash ($14,604) $27,214 $111,120
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