Before you even start planning a bed and breakfast, there a few hard facts you need to really think about. The main one is who out there will really want to stay at your bed and breakfast?
You need to do a target market analysis to see if there is even a demand for your bed and breakfast. Exactly what is the potential? Many people can kid themselves about the potential, but if you're investing a large amount of capital, you'd better be very sure about the potential.
Honestly, a four bedroom B&B is not going to generate enough income for you to live on, unless every room is filled every night! (And if that were to happen, which it won't, you'd be in for a case of serious burnout!)
When identifying the potential target markets, you must also know what it is you can provide for them specifically. Will enough of them buy your service? In doing a target market analysis you need to ask several key questions:
- Who is/are the market/s we want to reach with our product?
- What are the needs they are trying to satisfy?
- Where do they live? Where do they buy? Where do they travel?
- When do they buy?
- How will they buy the product? (Cash, credit, etc.)
- How many of them can we attract with our product?
Situational Analysis
This is more often done on an existing business do determine, "Where are we now?" But a new business can benefit from this as well. Try to think of it as the SWOT theory, Strengths, Weaknesses, Opportunities and Threats.
It will help you with your long term planning and in developing marketing plans. Start with the big picture and work your way down. When you know the answers to all of these points, you are better able to position yourself.
- Environment: Usually uncontrollable on your part -- what is the picture right now? Economic, social, and cultural issues will all affect the feasibility of your operation.
- Location/Community: Are there any events, business openings/closings, expansion/development, etc., that could impact positively or negatively on your B&B?
- Competitors: Do you have any? What kinds of services do they provide? Can you match or exceed them? How do they promote their inns? Often, B&B owners don't see other inns as competition, but as cooperators -- but this is not always the case.
- Market Potential: Is there even a need for another B&B in your town? Or one at all?
- Services: What can you provide that will make you stand out above others? Are you willing to do it?
Maybe you've never really given much thought to the way you make decisions about buying certain products or services but there is a definite pattern in making these decisions.
You and your guests make all types of decisions. Some are routine and require very little thought while others are extensive because they involve a great deal of money. Modern guests will usually do a lot of research before choosing a place to stay, especially for a pleasure trip or if they plan to spend a significant amount.
Of course, this process also depends on the person. How many of you can just take off on a minutes notice for a trip and be perfectly happen wherever you end up staying? Or are you like me and have to spend months in advance planning out every step of the trip? These are the basic steps:
- A need exists.
- Search for information.
- Evaluate the alternatives that are available.
- Making the actual reservation/purchase/stay.
- Post evaluation.
As the B&B owner, we want to do all we can to help reduce any "perceived risks" the guests may have about a stay with us. Your service will be evaluated based on what the guests' perceptions are -- not yours!
Market Potential
As you think about who will stay with you in your B&B, these are some questions you will need to ask yourself. You alone can determine your target market or niche. Realize that you will not be able to serve and satisfy everyone's needs.
Can you answer the questions discussed above? If not, then you need to do some more planning and research before you open a bed and breakfast.
This series of worksheets and information was originally written by Eleanor Ames, a Certified Family Consumer Sciences professional and a faculty member at Ohio State University for 28 years. With her husband, she ran the Bluemont Bed and Breakfast in Luray, Virginia, until they retired from innkeeping. Many thanks to Eleanor for her gracious permission to reprint them here. Some content has been edited, and links to related features on this site have been added to Eleanor's original text.
