After weighing in the emotional, energy consumption and "how it will affect your family balance" sides of being in the inn keeping business - it's time to focus on the numbers and the actual anatomy of the transaction. Financing your dream is another topic.
There are three separate but united parts of the sale price:
- Real Estate Value
- Business Value
- Brand Name Value
Before the purchase spend some time or consult with a professional who will help you to identify those values for a particular property.
In addition to obvious trends, location pluses and minuses, popularity of this particular Inn and overall economic situation of the area in which bed and breakfast is located several important factors should not be overlooked!
- Zoning (affects real estate value)
- Current operating expenses and their trends
- Occupancy rate and its trend, including seasonal changes
- Current Hotel/Motel occupancy rates in the area
- Current Commercial and Travel Related Area Development (such as construction of new hotels, entertainment areas, access roads, etc)
Make sure that the today's income statement numbers are available to you along with 2-3 years back. While analyzing trends - make sure to consider special events such as weather related that hindered travel, once in a while Olympic games event that sends bookings thru the roof, etc. Having all this information allows you now to align it with your dreams and goals of profitability, expectations, financial responsibilities. So, do you still want to be an innkeeper? :-) hope you made that decision based on your desire and drive and that little stumbles on the road will not stop you but rather let you be better prepared on how to handle them and move forward.
