Michigan State University Extension
Tourism Educational Materials - 33420139
06/06/02
Developing a B&B Business Plan Part 5
List of files and visuals associated with this text.
APPENDIX I
Amenities Checklist
An amenity in the hospitality industry is a physical item
given to or a service provided for the guest. Amenities
create a sense of luxury, build the image of your B&B, and
encourage favorable word-of-mouth advertising. Consider
the full range of amenities listed below in relation to
the projected image and cost of your B&B:
Adapter Afternoon tea
Aftershave Air freshener
Airport transportation Antique furnishings
Art gallery Baby strollers
Babysitting service Baggage storage
Bar Barbecue
Bath salts, bubbles, powder
Bathrobes Beach towels
Beds (King/Queen) Bedboards
Bed turn down Bicycles, mopeds
Boat charters Books, library
Brush snow off windshield Candy/cookery
Car rental discounts Card tables
Carriage rides Chairs, easy
Cheese tray Child care
Chocolates Clocks with alarms
Closets (large) and shelf space
Clothes brush Cologne
Comforter Corkscrew
Computers, word-processors (in room)
Cotton balls Courier service
Curling iron Department gift
Door locks (separate) Dry cleaning
Drinking glasses (not plastic)
Drinks (complimentary champagne, coffee,
liquor, tea, wine) Earmuffs, hand warmers
Exercise equipment Extension cords
Farm animals Fireplace
First-aid supplies Fishing poles
Flowers (plants in guest room)
Fruit basket Games/activities
Gardens, trails, woodlands
Golf service Ice bucket in room
Hair conditioner/spray Hand Cream
Hair dryers/curling iron Hot tub/sauna
Hobby displays/collections
Heat controls (individual) Homemade items/meals
Hors d'oeuvres Insect repellent
Interpreters/Foreign language knowledge
Iron, ironing board Kitchen privileges
Laundry privileges/service
Laundry soap, bags Letter openers
Limousine service Lint removers
Luggage tags Maps
Massage Mineral water
Membership in club/fitness center
Message-taking service (24 hours) Mints/candy on pillow
Mouthwash Musicians
Nail polish remover Newspapers
Night manager Piano
Pens Photocopying
Picnic basket/tables Pillows
Playing cards Radio
Raincoat Reading material
Refrigerator use Restaurant
Restaurant discount Robes/slippers
Sachet/potpourri in drawers
Safe for valuables Safety pins
Sauna/hot tub Secretarial services
Sewing kits/sewing Shampoo
Shaving cream Shoehorns
Shoe polish, mitts Shoe shine service
Shopping discounts, gift certificates
Shower cap/special shower heads
Sightseeing tours/guide service
Skirt hangers Slippers
Soap Spot remover
Souvenirs Social Hour
Space & equipment for business conference retreats and
sales meetings/ extra space/privacy
Special rooms - music, billiards
Sports equipment Stamps/stationery
Stereo in room Sunscreen
Swimming pool Tanning beds
Tar remover Telephone
Telescope Television/VCR
Telex Tickets to events
Toothbrush Toothpaste
Tours, tourist information packets
Towels (large, thick, and many)
Typewriters (secretarial service)
Umbrellas Views
Wake-up service Water purifiers/bottled water
Wheelchairs Window shades (light blocking)
Appendix J
Bed and Breakfast Guest Studies
Results of a Michigan(1) and Minnesota(2) B&B guest study
completed in 1988 are rather similar and provide a profile
of B&B guests. Both states are travel destination states
with a developed tourism industry but a relatively recent
B&B industry. Results from other states may vary depending
on location in the United States, location in the state,
distance from major market areas, etc. However, this
market research can be considered for use as a guideline
until more specific information relative to your B&B is
obtained. Two figures in the following market research
results indicate the range of response from the two
surveys. One figure indicates the response from one of the
state B&B surveys.
Where Are They From?
Sixty to 72 percent were residents of the state and 52
percent drove (Minnesota) 100 miles or less to the B&B.
Who Are They?
Seventy-seven to 81 percent were under 50, 50 to 60
percent between 25 and 44, and 35 to 40 percent under 34.
The average age was 41. Sixty-six to 78 percent were
married couples with 38 to 45 percent having children at
home. Forty-five to 50 percent had a family income
exceeding $50,000, and 17 to 21 percent had incomes over
$75,000. Sixty-four to 75 percent had college degrees,
with 29 to 33 percent having some advanced degrees.
Occupations were (Minnesota): business, 17 percent; health
care, 12 percent; education, 10 percent; and professional,
9 percent.
Thirty-seven to 41 percent were staying the first time in
a B&B, and of the 59 to 63 percent of guests previously
staying at a B&B, 51 to 56 percent had stayed in more than
three B&Bs, 33 percent (Michigan) had stayed in two B&Bs.
What Is the Trip Behavior?
Reasons for staying at a B&B were (Minnesota): personal
touch, 80 percent; charm of building, 78 percent; getaway,
71 percent; nicely decorated bedrooms, 61 percent;
romance, 61 percent; and an alternative to a hotel, 61
percent.
The primary purpose of the trip (some difference between
in-state and out-of-state guests) were: pleasure, 57 to 67
percent; visit to friends and family, 6 to 11 percent;
business, 8 to 11 percent; anniversary, 3 to 8 percent;
honeymoon, 2 to 4 percent; and wedding/funeral, 2 to 4
percent. Forty-five to 57 percent indicated that staying
at the B&B was not the primary reason to visit the area.
Activities participated in during the stay (Minnesota)
were: dining out, 80 percent; shopping, 55 percent;
walking, 55 percent; and sightseeing, 42 percent.
Attributes, which played an important part in selecting
a B&B were: private bathrooms, 53 to 54 percent; full
breakfasts (Minnesota), 47 percent; shoppers/dining,
nearly 28 to 40 percent; credit cards accepted, 30
percent; and recreational activity, nearly 31 percent.
Fifty-two percent (Michigan) said they would not stay in a
B&B if private bathrooms were not available and 66 percent
who shared a bath would prefer a private bath.
Guests considered the following qualities very important
after a B&B stay(3): warmth of innkeeper, 79.8 percent;
private bath, 68.5 percent; breakfast, 63.3 percent; and
owner-operated, 37.1 percent.
Seventy-two percent of the B&B guests (Michigan) selected
the B&B and made reservations before leaving home; 14
percent selected the B&B after leaving home.
Information sources which prompted B&B stays were as
follows: family and friends, 22 percent; state B&B
directories, 9 to 14 percent; other B&B directories and
books, 8 to 10 percent; advertisement or story in
newspaper, 4 to 7 percent; recommendations from another
host/operator, 6 percent; local chamber of commerce, 3 to
6 percent; and B&B brochures, 5 percent.
The Wisconsin Bed and Breakfast Industry: An Enterprise
Study 1990(4) found that the highest effectiveness ratings
were given to B&B directories and to the Chamber of
Commerce Registration. Telephone book listings and
newspaper advertisements are considered relatively
ineffective by operators. Results YBR Survey of
InnGoers(5), found the following sources of information
used in planning trips: guidebooks, 85.8 percent; friends/
relatives, 81.2 percent; magazine articles, 70.6 percent;
and Inn Association brochures, 54.8 percent. About half
the persons on this list had requested brochures published
by Inn Associations and newspaper ads.
------------------------------
(1) 1988 Michigan Bed Breakfast Guest Study. Dr. Edward
M. Mahoney, Ning Na, and Dr. Donald F. Holecek. Michigan
Travel Tourism and Recreational Center, Michigan State
University.
(2) A Market Analysis of Minnesota's Bed and Breakfast
Guests, 1988. William C. Norman. The University of
Minnesota Tourism Center, St. Paul, Minnesota.
(3) Results YBR Survey of Inn-Goers, Yellow Brick Road,
Fullerton, California, 1988.
(4) By Nancy A. Miller, Rollin Cooper, and John Gruidl,
Recreation Resource Center and Small Business Center,
University of Wisconsin, Madison, Wisconsin.
(5) Yellow Brick Road, Fullerton, California. 1988.
APPENDIX K
Questions to Answer When Choosing a Location and Building
To obtain and analyze the facts about a specific location,
answer the following questions:
* Are the neighboring houses well kept?
* How close is the competition?
* Is there enough parking space allowable by zoning
regulations?
* Is it on the street or off?
* Is the site easily accessible? How far is it from a
freeway?
* Is It on a main highway or street so people see it when
driving through?
*Are there any natural barriers?
* Is the site accessible to public transportation and
attractions?
* What zoning, fire, building code, and health
requirements must be met?
* Are there adequate utilities?
* What is the reputation of the owner of the property?
* Is it within two hours of a major metropolis?
* Will customers be willing to travel to the site?
* Are there nearby traffic generators, such as malls,
tourist attractions, colleges, sporting events, hospitals,
business, and industries that will draw customers?
* How close are restaurants?
* What is the overall trend in the number of travelers
visiting the area?
* What is the quality of police and fire protection?
* What is the crime rate?
* How attractive is the landscape and outdoor living area?
* What is the trend toward future resale value?
* What is the overall estimate of the quality of the
location in ten years?
* What are the liquor laws?
* What are the discrimination laws?
Also answer the following questions with regard to the
house or building(1):
* What is the charm, character, and scenic appeal that
will attract customers?
* What will be a guest's or passer-by's first impression
of the building?
* What is the condition of the building (lighting, wall
surfaces, floors, windows. equipment, furnishings,
plumbing, insulation, sound, heat, etc.)?
* Is there adequate telephone and cable T.V. service?
* How large are the bedrooms, dining room, parlor, and
kitchen? How many bedrooms are there?
* Are there individual heat controls?
* Is there room to install more bathrooms? At what cost?
(It is estimated that about fifty percent of guests will
object to sharing a bathroom.)
* What is the arrangement for private quarters?
* Are there enough storage areas (for housekeeping
supplies, food, lawn care equipment, recycling materials,
and laundry facilities)?
* Is there an attractive office and check-in space?
* Is it free of pet, cigarette, and other odors?
* Is the building easily accessible for people with
handicaps?
* What is the condition of utilities and water and sewage
systems? Collect information and corrective costs on
drainage, soil depth, source of water (city, privately
owned wells and septic system, potable water), pollution
control, storm sewers, sanitation sewers, water mains, and
electrical power supply.
* Does the area or the basement flood?
* What is the cost and future availability of gas,
electricity, and water?
* Is there room for expansion?
* Is there space for retail shops or space for additional
revenue generators such as meetings, parties, art
exhibits, and weddings?
* Can catering be done?
* Is it free of radon, asbestos, underground tanks,
etc.?
* What will be the future resale value of the building?
------------------------
(1) Adapted from the Marv E. Davis, Pat Hardy, Joann
Bell, and Susan Brown, So ... You Want To Be An Innkeeper
(San Francisco: 101 productions. 1985), p. 32.
APPENDIX L
Ideas for Continental Breakfasts
Coffees and Teas
All items served in your continental breakfast must be of
high quality and plentiful. Provide a variety. High
quality coffees and teas are very important to the success
of a continental breakfast. You should offer brewed coffee
both regular and decaffeinated. Consider offering a final
cup of coffee "to go." To please tea drinkers, provide
several kinds of herbal and black teas, as well as a
decaffeinated variety.
Wines and Fruit-Based Drinks
You might try offering champagne with strawberries, or
variations such as champagne punch, champagne and orange
juice, or wine coolers. (Of course you must check into
your liability before offering alcoholic beverages.) There
are also many non-alcoholic fruit-based drinks you can
serve such as a banana frappe, made by blending bananas
and pineapple with orange and lemon juice.
Danishes, Sweet Rolls, and Specialty Breads
Pastries, specialty breads, assorted bagels, toast,
croissants, or scones, are the centerpiece of a classic
continental breakfast. You should provide a variety of
high quality baked goods served either warm or cold, with
butter and assorted jams and jellies.
Decide whether you will serve this portion of the
breakfast or allow your guests to serve themselves from a
pastry bar. If you plan to serve breakfast, consider
showcasing your pastry selection on a tray or cart from
which your guests can order.
If you decide on a self-service pastry bar, elegantly
arrange a variety of danishes, sweet rolls, and breads on
a linen tablecloth. Also set out small tubs of chilled
fruit juice and pots of coffee and tea. Be sure to
replenish the pastry bar throughout the breakfast hour so
that it always look plentiful and attractive.
Adding Variety
Fresh fruit is the perfect complement for a continental
breakfast, especially if the fruit is locally produced and
in season. Place the fruit on the table just before the
guests arrive. An example of an elegant fruit dish would
be large glazed strawberries or blueberries (not available
all year) served in long-stemmed crystal, or a plate of
cantaloupe wedges topped with kiwi slices. You can also
add variety by providing certain foods that require little
or no preparation, such as individual cold cereals,
assorted yogurt, and cheeses.
Finishing Touches
The presentation of the meal is as important as the food
itself Take care to select garnishes that add the right
color and texture. A quality set of dishes and attractive
serving bowls are also very important.
Imaginative centerpieces can enhance the dining
atmosphere. Create unusual arrangements that complement
the dining room decor and the season of the year. In the
fall, for example, you might arrange small colorful gourds
and squash on a base of leaves. Change your centerpieces
from time to time to reflect the uniqueness of your locale
or to add festivity to holidays and special events. You
should also carefully consider elements that affect the
overall atmosphere such as music, lighting, decor, and
aroma.
Attractive Eating Places
Choose an attractive eating area such as the dining room;
a patio, porch, balcony, deck, or flower garden; the guest
room itself (only if the space is large enough); by a
crackling fire, or by a window with a beautiful view.
Table Settings
Plan special table settings by using cloth tablecloths and
napkins or attractive placemats and pretty china or dishes
that complement your color scheme. Also add an interesting
centerpiece (plan a theme according to the season).
Use decorative techniques for folding napkins. And if you
know your guests are traveling on a special occasion such
as a birthday, anniversary, graduation, etc., make the
event memorable by creating a centerpiece to help
celebrate. If you have a child-sized table and chairs, use
them for children who are guests. Decorate with something
the children can take with them.
APPENDIX M
Which form of Business Management Is Best for Me?
Proprietorship (One Person in Sole Control)
Some Advantages
Absence of formalities, red tape and organization
expense. You are your own boss and not dependent on
others.
Avoidance of "double tax" on owners of corporations
ineligible for small corporation tax benefits.
Anticipated losses of new business may be set off
against other income.
Some Disadvantages
Unlimited personal liability.
No provision for continuity in case of absence,
disability or death.
No one with whom to make a buy-sell agreement in case
of death.
All profits are taxed as income to you as proprietor.
Expansion can only come from after-tax dollars.
If business grows, may eventually have to incorporate.
Partnership Some (Two or More Persons)
Some Advantages
Absolute right to select your business partners.
Lower tax brackets for many-membered families actively
engaged in the business.
As a limited partner, you can put capital into the
business without general personal liability, but only
if you are completely divorced from business activity
or direction.
Can make buy-sell agreements to cover death or
retirement.
Liquidation of a retired or deceased partner's interest
can include a distribution of earning taxable only to
the recipient.
Some Disadvantages
Unlimited liability of general partners for acts of
other partners.
Federal tax uncertainties surrounding family and
limited partnerships.
Must share the profits of the business with partners.
Cost of organizing partnership.
Business can only expand on retained profits on which
you pay income taxes even though the income is
retained in the business.
Death of one partner may dissolve business.
Danger of disagreement between partners with no way of
resolving the stalemate except through liquidation.
Corporation (Consists of One or More Persons)
Some Advantages
Limitation of personal liability to amount of capital
contributed.
Perpetual existence.
Ease of obtaining capital from a number of sources
through issue of stock. Official status can be given
to key employees by designation as directors and
officers.
Easier to grow and expand with dollars left after
corporate tax, which may be lower than individual
tax.
Corporation stock is an efficient way of making gifts.
Inactive family members and others can own a share of
the business.
Stock is easier to probate and keep the business going.
Buy-sell agreements may be made to liquidate the stock
of a deceased stockholder.
Pension, profit sharing, tax advantages and other
fringe benefits.
Permits various categories of investors-non-voting
stock, preferred stock.
Some Disadvantages
Costs of incorporation and corporate taxes.
Organization and operation governed partly by statutes.
Need for filing corporate papers and holding corporate
meetings.
Unless properly guarded against, minority stockholders
can be almost completely subject to the wishes of the
majority.
"Double tax" burden on corporate profits and dividends
except where stockholders are eligible for small
corporation tax benefits.
Retained earnings are lock-in until sale, liquidation
or paid out as dividends.
More complicated tax records and returns.
------------------------------
From Starting A Business a public service of the State
Bar of Wisconsin.
Appendix N
Planning for a Tax Audit
An Interview with Richard Engel, CPA
The law: "weighty, complex, inscrutable, its seamless web
waits to entangle the hapless business owner at the first
misstep," recites the March 1990 issue of Entrepreneur.
With the recent flurry of Internal Revenue Service (IRS)
innkeeper tax audits, this article seemed appropriate, a
pointed reminder that April is the month U.S. citizens
pay, or attempt not to pay, the government what it
demands.
Richard Engel, a Certified Public Accountant and President
of Engel and Company, shares advice given to his large
covey of inn clients on preparing for a tax audit.
Ownership Options
With the tightening of home-based business tax laws and
the increased success and professionalism of bed and
breakfast and country inns, a review of your financial
situation is definitely in order. This discussion of legal
liability and the potential tax consequences is simplified
and condensed to assist you in preparation for
conversations with your tax advisor.
A sub-chapter S-corporation which owns everything is an
option Engel does not prefer. In this situation, the real
estate, the business and the furniture, fixtures and
equipment (FFE) are all within the corporation. Tax losses
are limited to stockholder basis (capital and stockholder
loans). Tax problems develop whenever S-corporation status
is lost or basis problems develop. Stockholders are taxed
only as individuals, even though they gain the other
advantages of the corporate structure.
Sole proprietorship or partnership owns all aspects of the
inn. In this entity, the owner living on premises must
allocate depreciable assets to personal and business uses.
This allocation is measured by the more rigid home-based
business law. For example, if you use an area at all to
cook, eat or chat, it is viewed as personal space. Even
the inn's maintenance costs must be prorated and, at the
very least, are questionable under either of these legal
designations. This allocation has not yet been tested in
the courts. However, a private-letter ruling has been
issued that is contradictory to the interests of
owner-innkeepers. Traditional is what Engel calls a
combination of personal ownership of land and buildings
and S-corporation ownership of FFE as well as corporate
operation of the business. A written lease between
corporation and individual makes it possible for the
individual to receive depreciation benefits on all assets
and still obtain business loss benefits. Allocations
between personal and business usage are not required here.
However, the S-corporation must report the value of fringe
benefits, such as shareholders living on premises
(owner/innkeepers).
But Isn't a Corporation a Pain?
You probably have heard that setting up a corporation and
doing the annual paperwork is more trouble than it's
worth. In reality, the government has done the small
entrepreneur a favor. Two primary corporate forms
apply to inns-subchapter S and the regular or
C-corporation.
A slight variation of the "traditional" form results from
operating as a regular or C-corporation. A written lease
still exists between the corporation and the individuals;
however, tax losses are passive and limited to $25,000 per
year. Under the 1986 tax law revisions, income is divided
into "baskets" (passive, earned and portfolio) and cannot
be intermingled when claiming losses. In other words, if
you receive rent from the active operation of an inn, the
depreciation and interest losses cannot exceed $25,000 if
it is a C-corporation. Fringe benefits (i.e., health
insurance and value of lodging), however, are not taxable
for the C-corporation stockholders.
The C-corporation has the least amount of paperwork. It
can end its fiscal year on any date, and the issue of
allocating innkeeper space as a fringe benefit is
eliminated. Losses may build up in the corporation, but
the owners cannot receive any tax benefit from them. Rent
paid by the C-corporation needs to be at arms-length.
Rental losses are considered passive losses, subject to
the $25,000 cap. In addition, at the time of sale, you
will be double-taxed-as a corporation and as an
individual.
Sub-chapter S-corporation is more involved and requires
additional elections, compliance and, perhaps, deposits.
All income and losses pass through to the shareholders. In
a recent IRS ruling, income from lease contracts under the
S-corporation (where your corporation pays rent on the
building you own separately) is not passive income and is
not subject to the $25,000 cap. However, an owner needs to
bite the bullet and pay self-employment tax on the fringe
benefit of living on premises. But a few years after
buying an existing inn or operating a new one, you will
recoup substantial tax benefits.
Incorporating for tax reasons just does not cut it with
the IRS; you need a solid, valid business reason. With the
broadening consumer base of this industry, along with the
increase in utilization of staff and more sophisticated
food service and preparation, incorporating may be a wise
business decision for no other reason than to limit your
liability in possible legal action. With a larger
mainstream consumer base comes another price to pay: the
potential attraction of a guest or two who may not be
gracious and careful with your inn and its furnishings.
This is not meant to sound pessimistic-only realistic.
Innkeepers, and their individual assets, need to be
protected. This is just good business acumen.
You cannot arbitrarily change from one form of corporation
to another. Additional taxes, as well as time and other
limitations, are involved. If you are considering
incorporating your business or transferring your assets to
a corporation, you should seek tax advice from a competent
attorney and Certified Public Accountant.
--------------------------------
Innkeeping, Vol. 9, No. 4. April 1990. Richard J.
Engel, CPA, president, Engel and Co., POB 1359,
Manchester Center. VT 05255. (802)362-1946.
APPENDIX 0
Example of a Projected Profit and Loss Statement*
(Vis. O1)
(Vis. O2)
* This example is for a first year, six-room B&B, open 360
days, projected for 20 percent occupancy, and an average
room rate of $55.00. These figures serve as illustrations
only, and should not be interpreted as ideal or serve as a
standard.
APPENDIX P
B&B Start-Up Costs
* Building acquisition, appraiser fees, independent
investigations of mechanical systems and structural
components, tax situation, etc.
* Home renovation, architect fees
* Furnishings
* Bedroom and bathroom items
* Safety equipment (smoke detectors, fire extinguisher,
exit light)
* Utilities
* Energy conservation improvements
* Office equipment
* Loan cost, loan closing cost
* Accounting fees and equipment
* Complimentary items and reading material for guests
* Legal fees, licenses, permits Insurance (homeowners,
property damage, liability, business interruption,
workman's compensation, hospitalization)
* Membership fees for business-related associations
* Initial advertising and promotion, sign cost
* Security features
* Cleaning equipment, staff, and supplies
* Food inventory
* Dishes and kitchen utensils
* Automobile
* Uniforms
* Ice machine
* Petty cash
* Operating capital, cash reserve
It is recommended to project high for the following cost
categories, and then base the cost on the cost per
rentable room.
1. Acquisition - If you buy, include the down payment,
closing costs, etc., and divide the total by the number of
rentable rooms. If you lease, include the cost of the
first and last month's rent and security deposit, other
fees, etc.
2. Renovation and Furnishings - These costs will vary
widely depending on the condition of the house but may
include costs for linens, wall coverings, drapes,
fixtures, furnishing for the guest rooms and common rooms,
kitchen equipment; bathroom additions; paving and
landscaping; painting (interior and exterior); electrical
work; plumbing (sewer, gas, water); and others. Add the
costs together and divide by the number of rooms rented.
Find out about available financing arrangements and
develop a schedule for any necessary construction.
3. Start-up Working Capital and Cash Reserve - These are
costs incurred prior to opening. They might Include the
owner's living costs during the renovation period, office
and stationery supplies, purchase or lease of equipment
and installation, starting inventory, utility deposits,
legal and accounting service, market research, licenses
and permits, insurance, promotional materials
(advertisements, brochures, logo, signs, business cards),
travel costs and fees for trade associations, mortgage or
lease payment, owner's salary, emergency needs, petty
cash, etc. These initial costs may seem high, but they
include both a home and a business opportunity. Again,
divide the total by the number of rooms. Bankruptcy could
occur if there are no cash reserves for losses during the
period to reach break-even occupancy. Project the
occupancy needed to break even, and the point in time
(months) when you can expect to make a profit. It may take
two or more years.
APPENDIX Q
Sample Chart of Accounts
In order to establish a consistent standard of comparison
(as is currently available in the rest of the lodging
industry), bed & breakfast/country innkeepers are
encouraged to set up their accounts as listed here.
Revenue Accounts
Room Revenue (Room rental excluding sales and bed taxes.)
Food & Beverage Revenue (Meals, catering, liquor, etc.)
Other Revenue (Weddings, entertainment, conferences,
books, souvenirs, etc. Does not include room rental.)
Food (All food and liquor for the inn.)
Room and Housekeeping Supplies (Supply items such as soap,
toilet paper, light bulbs cleaning supplies, laundry soap,
notions, toiletries, etc.)
Hourly or Part-time Employees (All wages and payroll taxes
such as FICA, Worker's Comp., etc.)
Food & Beverage Employees (All wages and payroll taxes as
above for full-time and part-time food & beverage
employees, if the inn serves meals other than breakfast.)
Utilities (Utilities including crash, gas, electric,
water, etc.)
Towels and Linens (Purchase price of all towels, linens,
blankets, pillows, bathrobes, etc.)
Marketing-Advertising & Promotion (Brochures, magazine and
newspaper ads, printing, direct mail lists, etc.)
Commissions & Bank Card Charges (Agent commissions,
referral services, credit card fees.)
Office Supplies (Paper, tape, pens, letterhead, etc.)
Telephone (Telephone and related expenses.)
Travel & Entertainment (Travel-related expenses and
business entertainment.)
Dues & Subscriptions (Dues to associations and
subscriptions to services, magazines, etc.)
Auto Expenses (Automobile gasoline, repair and
maintenance, car leasing.)
Maintenance, Repairs, and Fixtures (Materials for
maintenance and repair. Also include miscellaneous
purchases under $300 for appliances, fixtures, furniture,
etc.)
Outside Services (Fees for outside services such as
gardening, maintenance, laundry, etc.)
Insurance (Non-payroll insurance such as fire, theft,
auto, liability, etc.)
Legal & Accounting Fees (Fees for legal and accounting
services.)
Business Taxes & Fees (Property taxes and business fees.
Exclude sales and bed tax and income tax.)
Interest Expenses (Interest paid on all types of business
related loans, excluding any mortgages.)
Salaried or Permanent Employees (All wages and payroll
taxes such as FICA, Worker's Comp., etc. Do not include
owners.)
Owner's Wages or Draw
Other Expenses (Money actually taken out of the business
by the owner(s). All expense items that do not belong to
any other fixed or variable account.)
_______________________
From Innkeeping's Bed & Breakfast/Choanae Inn Survey.
For detailed report, call 805/965-0707.
APPENDIX R
Examples of B&B-Related Zoning Ordinances
(Warsaw, Indiana; Galena, Illinois)
BEFORE THE PLANNING COMMISSION OF THE CITY OF WARSAW,
INDIANA
PETITION FOR AMENDMENT TO THE ZONING ORDINANCE OF
THE CITY OF WARSAW IN THE MATTER OF THE PETITION OF
WILLIAM S. HAMBRIGHT, et ux. FOR AMENDMENT OF THE
ZONING ORDINANCE OF THE CITY OF WARSAW
The petitioners, William S. Hambright and Deborah
Hambright, husband and wife, by counsel, respectfully
petition the Plan Commission of the City of Warsaw, for
amendments to the Zoning Ordinance and in support
thereof say the following:
1. That they are proceeding under Article 7 of the
Zoning Ordinance of Warsaw, Indiana as revised in
April, 1981.
2. That they are the owners of more than fifty percent
(50%) of the area involved in the petition.
3. That they propose an amendment to Article 11:
Definitions to read as follows:
Bed and Breakfast Facility
An owner occupied, or owner employee occupied,
architecturally or historically significant residence
containing no more than six (6) guest rooms for hire,
for lodging by prearrangement for periods not to exceed
three (3) consecutive weeks and providing for
occasional meals daily (usually breakfast) and not a
hotel, boarding or lodging house.
4. That they propose an amendment to Article 12: Zoning
District Regulations, specifically, Article 12.4.5
List of Special Exceptions to read as follows:
Bed and breakfast facilities shall be permitted in the
R-2 and R-3 Zone Districts, provided that:
(a) the owners of such facility obtain annually on or
before February 15, a permit or license from the building
commissioner of the City of Warsaw for the operation of
said facility.
5. That your petitioners request a hearing upon this
petition after public notice in accordance with the
laws of the State of Indiana.
WHEREFORE, your petitioners request the Plan Commission
for its approval of the proposed amendment and that
upon Its approval that its recommendation be forwarded
to the Common Council of the City of Warsaw for hearing
thereon.
Rasor, Harris, Lemon & Reed
By
Rex L. Reed
Attorney
CITY OF GALENA, IL 61036
CITY ORDINANCE
SECTIONS ON GUEST HOUSE AND GUEST HOMES
3.2.79 Garage, Public.
A building other than a private garage, used for the care,
incidental servicing and sale of automobile supplies or
where motor vehicles are parked or stored for
remuneration, hire or sale within the structure, but not
including trucks, tractors, truck-trailers and commercial
vehicles exceeding one and one-half (1-1/2) ton capacity.
3.2.80 Guest House.
Sleeping quarters for rent within a dwelling and/or
detached accessory building for use by temporary guests of
the owner or agent of the premises.
3.2.81 Grade: Street
a. For buildings having walls adjoining one street only,
the elevation of the street at the midpoint of the wall
adjoining said street.
b. For buildings having walls adjoining more than one
street, the average of the elevation of the street at the
midpoints to the walls adjoining said streets.
c. For buildings having no wall adjoining the street, the
average level of the finished surface of the ground
adjacent to the exterior walls of the building.
Any wall approximately parallel to and not more than
twenty (20) feet from a street line is to be considered
as adjoining the street for the purpose of this
definition. Where no street is near or established, the
grade shall be determined by the City Engineer. Height of
Building.
3.2.82 Height of Building.
The vertical distance measured from the street grade or
equivalent established grade to the highest point of the
front facade or uppermost habitable floor, whichever is
greater.
3.2.82(A) Historic District.
That portion of the City of Galena located within "The
Original City" as recorded in the Courthouse of Jo Daviess
County on 28 March 1838 and all subdivisions added to the
City prior 31 December 1859. The same boundary is
recognized by both local ordinance and the National
Register of Historic Places and represents an area
predominantly characterized by nineteenth century
architecture.
3.2.82(B) Historic District Design Guidelines.
Architectural guidelines as presented in "Architectural
Styles and Design Elements of the Main Street Buildings
of Galena, Illinois, 1830-1890" by Tacie N. and Thomas
A. Campbell and any other design guidelines that may be
adopted by the City of Galena in the administration of
the Galena Historic District.
3.2.83 Home Occupation.
The conduct of an art or profession, the offering of a
service, the conduct of a business or the handicraft
manufacture of products for gain in accordance with
provision in Section 11.2.1.1. There shall be no exterior
display or sign except as allowed in sign regulations for
the district in which such "home occupation" is located,
and there shall be no exterior storage of equipment or
materials used in connection with the home occupation.
8.4.2.4 That spacing between principal buildings shall
be at least equivalent to such spacing as would be
required between buildings similarly developed under the
terms of this ordinance on separate zoning lots, due
consideration being given to the openness normally
afforded by intervening streets and alleys; and,
8.4.2.5 That along the periphery of such planned
developments, yards shall be provided as required by the
regulations or the district in which said development is
located.
8.5 RESERVED
8.6 Guest Homes.
Guest homes, as defined in Section 3, are of such a nature
as to require additional standards to insure the integrity
of the neighborhoods of which they are a part.
8.6.1 The following additional standards shall be applied
to each guest home:
a. A maximum of four (4) guest units shall be permitted on
one zoning lot.
b. The owner or his agent must reside on the premises or
immediately adjacent to the house, this distance not to
exceed one hundred (100) feet.
c. Proof of registration with the Illinois Department of
Revenue and Jo Daviess County for tax purposes must be
submitted to the Office of the Zoning Administration
within ninety (90) days of City Council approval of the
Special Permit.
d. All applicable state and local codes and ordinances
must be complied with or the special use permit shall be
subject to revocation.
Additional Concerns Regarding Guest Homes:
1. Should an applicant wish to prepare and serve food
in a guest home, they must obtain a permit from the Health
Department in compliance with the State Restaurant Code.
2. Adequate transportation routes to the guest home and
available parking must be provided.
3. That the guest home provide the proper number of exits
as required by State Fire Codes.
4. That the guest home must maintain the appearance of a
residential dwelling.
5. That signage and exterior lighting be kept at a
minimum. First time guest homes are usually only given a
two (2) year permit.
Developing a Bed and Breakfast Business Plan Part 1
Source: Publishing State: Illinois
ID: NCR273
Authors: Buchanan, Robert; Espeseth, Robert
Year: 1991
Programs and activities of the Cooperative Extension
Service are available to all potential clientele without
regard to race, color, sex, national origin, or handicap.
In cooperation with NCR Educational Materials Project.
Issued in furtherance of Cooperative Extension work, Acts
of May 8 and June 30, 1914, in cooperation with the U.S.
Department of Agriculture. DONALD L. UCHTMANN, Director,
Cooperative Extension Service, University of Illinois at
Urbana-Champaign.
The Cooperative Extension Service provides equal
opportunities in programs and employment.
Published in part by the Illinois-Indiana Sea Grant
Program with funding from the National Oceanic and
Atmospheric Administration, U.S. Department of Commerce.
This work is a result of research sponsored by NOAA,
National Sea Grant College Program, Department of
Commerce, under Grant NA 89AA-D-SGO58. The U.S.
Government is authorized to produce and distribute
reprints for governmental purposes notwithstanding any
copyright notation that may appear hereon.
This publication resulted from the activities of the Great
Lakes Sea Grant Network, which is comprised of
university-based programs in Illinois-Indiana, Michigan,
Minnesota. New York, Ohio, and Wisconsin.
Editor: Stephanie Hearn
Designer: Krista Sunderland
Developing a Bed and Breakfast Business Plan
Robert D. Buchanan
Extension Specialist, Restaurant,
Hotel and Institutional Management
Purdue University
Robert D. Espeseth
Coordinator, Illinois-Indiana Sea Grant
Program Recreation Specialist,
University of Illinois Cooperative
Extension Service
North Central Regional Extension Publications are subject
to peer review and prepared as a part of the Cooperative
Extension activities of the 13 land-grant universities of
the 12 North Central States, in cooperation with the
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IL-IN-SG-E-91-6
5M April 1991
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