Bed and Breakfast Entrepreneurs

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A bit slow out there in the blogosphere.  I had to get my own winner, although the process was worth it.  I met the owner of Wiss House at one of the Bed and Breakfast courses offered by the Southbank Institute of Technology, South Brisbane, Queensland.  I enjoy teaching my slot on these programmes which are always filled with people interseted in Bed and Breakfast who are wondering whether their existing property would be suitable for conversion or whether to buy an already established business.  I arrived early for my session and Sara Watson was just finishing her advice, having distrbuted some beautiful brochures of Wiss House, which immediately caught my eye. 

I drove out to the property at Kalbar, close to Boonah, last weekend, walked up the steps and entered a stunning and original old Queenslander with four guest bedrooms and ornate banquet room leading off the central corridor.  I was busy calling out trying to find Sara which gave me extra time to appreciate its charm; each room has French doors opening onto the verandahs and the guest bedrooms are fully air conditioned.  There is a library and a bathroom with clawfoot bath.

Sara finally caught up with me and I was able to ask some questions.  Here is a summary of her answers.  She purchased the property four and a half years ago and spent some money on rewiring, replumbing, installing 3 phase power and a swimming pool with spa.  She also added two new bathrooms and a separate toilet.  The future could involve lifting the house slightly for which she has received a grant and adding maybe another four large bedrooms underneath. 

Sara is an interior designer herself and says that she fell in love with the place as soon as the front door was opened.  She was a finalist in the Queensland Tourism Award (2007) and winner of the Ipswich and Valleys Award (2006).

Wiss House is the perfect place to relax whilst enjoying the ambience of a historic home, this year being its centenary.  The history started in 1908 when Lionel Wiss who was a local store and land owner built the house with panoramic views all around. 

That was the past but the future could be just as interesting with new rooms to be built and further guests to visit.  To contact Sara Watson go to www.wisshouse.com.au

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If you own a home you own a potential asset even if all you can see at present is upkeep, repairs and bills.  If you have a room or number of rooms which you are not using, these rooms can be turned into an income producing asset.  Try looking at each room as a unit of production which is currently dormant but with a bit of thought and imagination, could be made inviting for guests.  Guests could be anyone from the traditional lodger who is working in the area, international students who are going to a local college or university, backpackers or even overseas visitors straight off the plane.

Assuming that you have read this far and thought about what you can do to make the room(s) appealing, you are now bound to be thinking of the problems.  These come in two broad categories; the confidence and mechanics of looking after guests and financial considerations.  Let us take them in that order:

The confidence and mechanics of looking after guests

You will have to get used to having strangers in your home;

You will need extra towels and linen;

You will need to ask about special diets and allergies;

You will need to be able to clean up quickly after they have gone ready for the next lot.

Financial considerations

What sort of occupancy do you need to make it worth your while?

Will your existing household insurance cover you for public liability if an accident happens to the guest?  Will it cover breakages and theft?  Advice given by insurance brokers is to contact your insurance company to see how the company deals with ‘guests and lodgers’ on your policy.  You should get this in writing rather than just listen to someone from a call centre.

Are there any local zoning restrictions regarding using the property for guests, parking etc.?  Contact council.

If you can get over the hurdles, you could well have a good financial proposition and get to hang on to your home.  Make a profit and the banks will probably be happy to lend you money for improvements and maybe release the equity from your original home to add further homes to your portfolio.

Please contact me if you decide to follow this advice on my personal email jaclodge@optusnet.com.au and I will publish your story.

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Are you asset rich and cash poor? 

Do you have a beautiful home which you love but are having trouble paying household bills?

Would you like to keep ownership and make money?

If you answer yes to all or any of the above, then consider this competition.  Send me a photo of the property, your story and how you could offer accommodation within your home to my private email jaclodge@optusnet.com.au and I will advertise the best entry for free in bedandbreakfastentrepreneurs.com and provide free advice on start up.

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We all love a fluffy towel, guests most certainly do and will compliment you on yours. The following information is presented with thanks to ‘Pillow Talk’, a shop that not only sells towels but provides a sheet telling you how to keep them fluffy.  Having just purchased some new towels for the Bed & Breakfast, I can tell you that the following tips do work:

New towels should always be washed before use by adding a cup of vinegar to a full load of water.  This washes away any finishing products used in manufacturing and allows ‘the cotton to bloom’;

Do not use too much detergent as it allows a build up of soap in the fibres which in turn affects absorbency;

Finally when drying use a warm tumble drier or line dry in the shade to keep the softness.

These tips should be followed in conjunction with the Amway SA8 powder recommended on this site.  The main positive for the B & B owner is the cheaper cost of a 3kg box of SA8 in comparison to other powders due to the concentrated nature of SA8, meaning more washes for your money and less detergent to clog the fibres of the towel; other pluses are that it is biodegradable, protects zippers and metal buttons and has a rust inhibitor to protect the machine.  I go into more detail regarding the positives of SA8 in a previous article http://www.bedandbreakfastentrepreneurs.com/doing-the-washing/.

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I was surprised and impressed to discover that bed and breakfast is becoming popular in the black townships of South Africa.  For anyone like myself who has never been, all I would think of for black townships would be poverty, rioting and apartheid.  But the owners are turning the political history into a sales and marketing tool, capitalising on the positives to come out of the apartheid struggle, giving guided tours with such lines as, “Do you know why this area in Soweto is the most famous area in the world?”  Answer:  ”It is because it was the home to two different Nobel Peace prize winners, Nelson Mandela and Bishop Desmond Tutu.”

Once the tour bus operators did not wish to stop there and advised passengers not to get off or they would have their wallets stolen.  Now it can be a popular request not only to get off but to stay for a few nights.  Apparently the welcome and hospitality can be generous and larger than life, tariffs are reasonable and it is a chance to hear from the people themselves what life used to be like;  a detour from the main cities and beautiful beaches but one that more and more people seem to be willing to make.

The trend is also shifting the ownership of small tourism and hospitality businesses, which are predominantly white owned, into the hands of the black people themselves. It is providing further employment within the communities as members of the community are employed in housekeeping, tour bus excursions etc.  At this stage it might be small beginnings but who knows where it could lead to next.

Let us hope that bed and breakfast takes off in other parts of the world along the same lines e.g. Vietnam and Cambodia.  The basics would always be the same, clean rooms and linen, good food and something of interest for the guests to go and see.                                     

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I felt compelled to use that as a title as the alliteration was too much of a temptation.  Synchronicity means an appropriate time for events to happen, serendipities are unsought events that lead to a blessing and synergies are bringing the power of a team together to achieve a better outcome than could have been achieved as an individual or group of individuals acting alone.

We recently experienced all three in our Network 21 business which is run alongside our Bed & Breakfast business.  When I first saw ‘the plan’ as Amway people call it, I looked for holes, turning it upside down and every which way, but could not find any.  I then did what everyone does, telling others how good it was, only to find that they did not seem to think so.  This slowed us down quite a bit, almost to a stop; nothing like a bit of stiff rejection to get you to doubt yourself.  Still, we kept going, only to struggle with little success.

Suddenly things have seemed to come together for us.  Pam gave out a couple for free samples of SA8 laundry powder to her hairdresser and others and they seemed to like it, so she went around the other hairdressers in the locality and they seemed to like it too, and the orders for SA8 have started to come in.  Hairdressers always have a lot of towels to wash and they say the 3 kg. pack is ideal.  I always intended to make Amway products a cornerstone of the Bed & Breakfast as I could see from first hand experience how good the products were.  Pam was prepared to take the rejection more and so got her serendipities; I felt safer writing about it from behind a computer screen but hope that has helped with the synergy of working together.

It is worth considering local businesses like hairdressers who seem to have the washing machine running a lot of the time as well as other Bed & Breakfasts to develop a co-operative for supplying these products.  Two businesses running side by side are better than one for synchronicity, serendipity and synergy.

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Doing the washing is our bread and butter.  Everyone likes to slip between the sheets when the sheets are fresh and inviting, so today’s entry looks at Amway SA8 powder and its practical advantages.  There are three pluses when you use SA8 in comparison with other laundry powders:

SA8 dissolves completely;

SA8 is biodegradable;

SA8 is more effective in smaller amounts of water.

Dissolvability (is there such a word?)

If you put a spoonful of SA8 into a small container of water and a spoonful of a laundry powder from the supermarket shelves into another container of water and watch them both, you will see the  exploding crystals of SA8 come into force with the powder dissolving completely in the container, whereas residue is usually left on the spoon of the competitor.  This means that the SA8 is completely dissolved when it comes to washing the guests’ sheets and towels and also explains why there are no suds on the surface of the water whilst the machine is washing.

Biodegradable

The dissolvability leads to the biodegradability, meaning that it is safe to use not only on your plants but also in areas where all waste goes back onto the land.  One of our customers is using the product on Tamborine Mountain near our Bed and Breakfast and informs us that is the reason she likes SA8 as she feels it is safe to return to the land.

Effective in smaller amounts of water

The Queensland water shortage has forced most of us including the state government to think of ways to save water.  In fact the Queensland government offers a $200 rebate when you purchase a washing machine which is proven to use less water.  These are often front loading machines and that makes SA8 even more desirable as the front loader use less water on all its cycles, requiring a reduction in the amount of powder needed for a wash.

Finally SA8 is cheaper than its competitors from the supermarket shelves as I have demonstrated in  Anyway money.  That just caps off the positives of complete dissolvability, biodegradability for the safety of your plants and garden and being effective in machines using smaller amounts of water.

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Moments of truth are a series of moments that guests experience when they stay in your B & B and needless to say you should try and make all of the moments positive.  You might make a list for your own business and they are likely to contain the following:

• Approach to the property
• Greeting by the hosts
• Help with the luggage
• Cleanliness of the room
• Comfort of the bed
• Tea/coffee making facilities
• TV
• Bathroom cleanliness, towels, robes etc.
• Breakfast

If any of these let the experience down overall then it clouds the whole visit in the eyes of the guest, so it is no use having a beautiful room if the guest then goes down to a sub-standard breakfast.  Should the opposite be the case and the guest gets more than s/he bargained for in the positive sense, you have provided the person with ‘delighters’, that s/he is likely to take away as a memory of a particularly enjoyable stay and which s/he will tell friends and others about.  That is the sort of ‘word of mouth’ advertising that you want spread around.

Try and be your own critic and consider the good experiences as those that provide positive exemplars and the poor experiences as those that provide negative exemplars.  Guest comments and particularly the gracious acceptance of criticism with the intent of sorting this out to the satisfaction of the guest is a good way to improve your performance.

Choose the correct answer from 1 - 4 which illustrates a positive B&B exemplar.

Correct answer = 4.  No prizes for explaining why the other three are negative exemplars of B & B hospitality.

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The beer game is used by Senge (1992) when writing about learning organisations, to highlight how self destructive our own business decisions unwittingly can be and how important really new ways of thinking are in order to move ahead and achieve a learning organisation.

There are three players in the game; the retailer, the wholesaler and the brewery.  The retailer starts by ordering his usual 4 cases per week of Lover’s Beer, when there is an increase in demand to 8 cases per week from his customers.  He orders more to keep up with demand but finds there is a delay in receiving his order so he keeps ordering even more.  The wholesaler tries to satisfy the retailer’s demand and in turn keeps increasing his order to the brewery.  The brewery shifts more resources to the production of Lover’s Beer, taking on extra staff etc.  At the end of the game all three parties have a large unwanted stock of Lover’s and each blames the other party or parties for getting them in that mess.

The point of the game is that all three players were acting rationally, maximising their positions but their collective decisions led to their downfall; this then leads each party to look for someone to blame rather than recognise that the system caused its own crisis not external forces or individual mistakes.  Each of the players could have stopped the problem but none of them realised how each of their decisions caused the instability.

Senge goes on to explain that the ingredients necessary to build a learning organisation are five; systems thinking, personal mastery, mental models, building a shared vision and team learning.  All wonderful stuff and true but how does this help you in practice?  To get behind the five ingredients to build your successful business, think what assumptions you are making in a particular situation, what these assumptions are likely to lead to, what you are missing and what a different set of assumptions would lead to. 

Brainstorm with your partner asking them to identify your blind spots (if you are brave enough!). By nailing down the assumptions, new ideas and fresh communication can flow with the possibility of solving a problem or moving in a new and different direction.

References

Senge, P.M. (1992).  The Fifth Discipline:  The Art and Practice of the Learning Organization.  Random House:  Sydney.

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This is different to the articles that usually appear on the site but I felt that operating a Bed and Breakfast business has given me some ideas which might help those householders who are facing the sub-prime housing crisis.  I realise that the sub-prime crisis is severe with some U.S. householders seeing their repayments jump from $600 to $2000.

How about considering three possible strategies?

1. Leverage your household Anyway money;

2. Take in paying guests;

3. Rent out garage space to any local business needing storage space.

Anyway money is household gold and it is money that you have to spend anyway on laundry powder, surface cleaners, beauty products, vitamins and supplements.  Rather than give this money to the supermarkets you could start your own business or co-operative supplying the neighbourhood with these basics.   Network 21 has all the necessary household products, is not expensive to join and looks after all the ordering, delivery, bookkeeping etc.  Everyone has to have soap powder and cleaning products etc. whether the times are good or bad.  For further information please see a previous article, Anyway money.

Could you look at other sources of income such as paying guests in one or more of your spare rooms?  Paying guests could be anyone from family, friends, friends of friends, university students, international students on an exchange programme, people transferring to the area from other offices and who need temporary accommodation, church members etc.  You know your area better than me so brainstorming might bring up other ideas that I have not even thought of. 

The cost of having paying guests is not high; food, washing of linen and towels, cleaning the room, basically cover it.  Guidelines for costing breakfast are given in the archives of this site and costings for lunch and dinner use similar calculations.  Even providing good quality meals need not be expensive and you can alternate a few basic, nutritional recipes throughout the week.

You can let out garage space for any local businesses wishing to store their deliveries.  A business can quite easily run out of storage space and yet not want to go to the next level of paying for further commercial storage space.  Hiring your garage space is far cheaper for the business, assuming it is clean and dry, and is another small source of revenue for the householder.

Any paying guests/business storage would help take the strain off your housing loan repayments for a time.  It would pay to go and see your bank manager, outlining any concrete proposal you can come up with as that way s/he would see that you were being proactive and  may even be prepared to renegotiate terms; from the bank manager’s point of view they do not really wish to repossess all these homes and would probably listen favourably to any reasonable plan.  From your point of view you get to survive the crisis and consider other options other than being put out of your home.

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