In addition to the every day and the mundane ins and outs of hospitality management, bed and breakfast owners, and managers, require financial skills to keep their business running at its full potential. The good news is that a qualification in finances is not always necessary. All you need is thorough research and knowledge on the basics, as well as steps on how to implement these concepts. Whether you already have an operational bed and breakfast or are planning to open one, it’s never too late to learn the ropes.
The first step in managing your company’s finances is to assess your capital and draw up a yearly budget of all the necessary expenses you’ll need to pay. This should be done by breaking down each area which requires payments per week and then calculating totals for each month and a full year. Because various expenses are necessary at different time intervals, it is also useful to plan in advance according to these dates. Once you have a total amount needed per year, you can reflect on your current capital, and find what the difference is, between what you have and what you need. The remainder should be seen as your minimum target earnings for the year to break even. Be sure to include payments such as wages, and take into consideration insurance, licenses, the quiet seasons and money for incidentals. It might seem basic, but leaving out any expense could be detrimental, as the amounts add up quickly when looking at them from the perspective of a yearly budget.
Something that is often forgotten in any business is that saving money is always possible, and does not equate to sacrificing the quality of your services. Saving money can mean anything, from buying supplies in bulk during sales, to recycling, choosing package deals when available on amenities like internet and TV packages. Saving where possible can make a significant difference between breaking even and making a profit, as every penny counts in the industry.
Whether you hire a financial manager or handle the finances yourself, which is common when running a bed and breakfast, you should have every aspect of your budget covered. At the end of the day, you, as the owner or manager, are responsible for both expenses and revenue and should be able to account for them confidently. With careful management and informed decisions, your bed and breakfast can be financially stable at all times.
