Have you always dreamed about running your own bed and breakfast? Now may be the right time to buy into this $3.4 billion industry, as the demand for affordable accommodation is on the rise. Over the past five years, the sector experienced an average growth rate of 2.6%. If you’re serious about becoming an innkeeper and want to know how to buy a bed and breakfast in Charlotte, NC, continue reading as we cover the essential questions you should ask during the buying process.
5 QUESTIONS TO ASK BEFORE YOU PURCHASE A CHARLOTTE BED AND BREAKFAST
Innkeeping is about much more than serving guests. As you undertake this new venture and start looking for bed and breakfasts for sale in Charlotte, NC, take these buying factors and considerations into your business plan.
1. HOW WILL YOU SET YOUR BED AND BREAKFAST APART FROM THE COMPETITION?
As an aspiring innkeeper, you’ll have several other local competitors to keep up with besides bed & breakfasts. Hotels, motels, homestays, boutique hotels, and country inns are all popular lodging destinations for tourists in Charlotte and the surrounding areas. Think about ways you can bring in more business and accommodate your guests. You may want to appeal more to your target market by:
- Updating guest rooms
- Adding or expanding food and drink options
- Highlighting local attractions and places of interest
- Optimizing and staying active on listings such as TripAdvisor
2. WHY IS THE CURRENT OWNER SELLING?
When meeting the current innkeeper, be sure to ask why they’re looking to add their bed and breakfast listing on the market. Owners will often sell a bed and breakfast because they’re retiring, moving, or battling an illness. However, you should ensure the sale isn’t because of financial reasons. Even if you intend to turn the business around, financial hardships can take a significant amount of time to recover from.
3. WHAT DOES THE SALE INCLUDE?
With any small business, inventory and equipment costs can add up quickly. Make it a priority to ask the current owner precisely what’s included in the sale. Depending on their response, you may need to look into purchasing other items necessary for running a bed and breakfast, such as bedding and cleaning equipment.
Additionally, you’ll need to ask the innkeeper whether they own or lease the bed and breakfast property. If they’re the owner, see if the deed is included in the real estate sale. If they’re a renter, make sure to go over new leasing agreements with the landlord.
4. WHAT ARE THE BED AND BREAKFAST’S CURRENT EXPENSES?
Next, discuss the daily operating expenses with the current owner. It’s important to have a good understanding of the average day-to-day costs of running a lodging property in Charlotte, NC. Review financial documents, such as tax returns, income statements, cash flow, balance sheets, and gross income.
5. WHAT IS THE ASKING PRICE?
Lastly, you’ll want to find out the selling price of the bed and breakfast inn. Ask the current owner how they calculated that price. If they hired a third-party valuation service, it’s more than likely an accurate and close estimate of the inn’s real business value. However, this likely means there will be little room for negotiating.
As you start on your journey to buying a bed and breakfast in Charlotte, NC, don’t hesitate to reach out to the knowledgeable staff at VR Business Brokers of Charlotte. Our experienced brokers can help you get a better understanding of the business buying process. Contact us today to book your consultation!