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How to Start a Small Guest House Business 

 

Running a guest house is the best way to meet people from all over the world, while you make money. Wondering how you should start your own small guest house business? Here are some tips and steps on how to go about: If you would like to know the legal requirements for B&Bs and Guest Houses in South Africa, we cover that on another blog. 

 

 

Tip #1 - Start with the why questions

It is important to answer all the 'why' questions. In the first place, why do you want to start your guest house? Why would guests want to book with you? Are you converting your home into a guest house? Are you building the guest house from scratch? Why is the location ideal for guests? 

 

Tip #2 - Go the legal route

Be sure you do it right - the legal route. Check out my blog where I cover the legal requirements for B&Bs and guest houses. Going the legal route will save you lots of hassle later. Starting legally means consulting with your municipality to get permission to start your guest houses. You need a get the green light for starting your guesthouse in your chosen location, and also get the building plans approved. 

 

Tip #3 - Lifestyle

I will assume that you are planning to run the guest house yourself. How is it going to affect your lifestyle? How will your family be affected? Running a guest house can be demanding. Are you willing to work from the early hours of the morning till late? Do you love working with people? If you are married, discuss this with your spouse and your family. 

 

Tip #4 - Do you have the financial resources?

One of the most important discussions should be your affordability. How much finances do you have to start your guest house? Get to know how many rooms you what to start with. Generally, a guest house is anything from 4 lettable rooms to 16. My advice is to start small, even if you think you have enough land and money. 

 

Starting your own small guest house business 

Once you are in perfect harmony and your intuition says yes, here are some tips to go ahead:

 

Step #1 - Choose the most appropriate business plan for you

It is important to consider the pros and cons of buying landing and building your guest house from scratch or converting a residential property into a bed and breakfast. Renovating an existing property seems the quicker option but it is not always cost-effective. 

 

Step #2 - Choose the right location

Location is key for guest houses. Do thorough research on the area. What will keep customers coming and booking your guest house? What are the red flags? Is it a safe area? Is there a hospital nearby? Are there restaurants nearby? Are there other guesthouses nearby and if yes, how are they performing? It is important to start your guest house in a good location where you do not have to convince people much to visit. 

 

 

Step #3 - Aim to offer different from your competitors

Aim to be different from your competitors. Check what they offer in terms of theme, amenities, linen, service concept, etc. Offer different and better than they do.

 

Plan where you are going to buy your linen, your amenities, your furniture, and other things. While you do this, please don't go over the top and think that you will make your money quickly by charging your guests a premium price. 

 

 

Step #4 - Human Resources

Regardless of the size of your guest house, you will need staff that will help you. If you think you will be the owner, entertain customers, cook for them, clean the rooms, take the bookings, you will burn out quickly. 

 

Depending on the size of your property, aim to have enough support staff to help you reach your goals. You will probably need staff to clean the rooms and do laundry, a receptionist who can also cook, a gardener (if you have a garden), and a security guard. 

 

Be sure to familiarize yourself with the labour laws of the country and treat your staff fairly. 

 

Step #5 - Marketing your guesthouse

Marketing is the cornerstone of your business's success. Even if you can have the best establishment if you can't market it correctly, you will lose. Nowadays, there are tons of marketing platforms that a free. Google, Facebook, Instagram, Twitter, etc. Of course, your website is your brand. It must be fresh and up to date. 

 

Another important thing is online travel agencies (OTAs). The links of booking.com, Expedia, and many more. You will have to register your guest house with them. These companies spend millions on google for ads. If you are listed with them, you will cultivate a business that you wouldn't have if you were not listed. Just know you will have to pay them a commission on confirmed bookings. Usually, it is between 12% and 25% of your room charge. 

 

Step #6 - Make booking easy

Many guest houses lose money because they make things difficult for customers. The winning combination is convenience and affordability. Get a booking engine like nightsbridge and your customers will book easily and directly from your website. If you need somebody to build you a fresh and affordable website for your guest house, speak to us.

 

Another powerful platform is WhatsApp! Have a dedicated phone for your guest house that will take WhatsApp bookings, you will be amazed how many customers will find it convenient to book and get directions through this platform. 

 

Step #7 - Be financially savvy

It is important for you as the business owner, to know your finances and have basic knowledge of financial procedures. 

 

The hospitality industry is notoriously seasonal, and unless you are lucky enough to attract regular business clientele, you may well need to weather periods of few or no guests at all, therefore no income. Because of this, it is advisable to plan your finances very carefully and ensure sufficient savings to carry you through the occasional dry spell.

 

Try not to overstretch yourself especially in the beginning. High monthly repayments on a large bond can become unmanageable during a particularly bad patch, and you do not want to find yourself losing the property because of a few months of low occupation.

 

Rates and taxes are also more expensive for guest houses than the ordinary residential-zoned properties, however, this should not have a dramatic impact on your profit margins. Dry spells aside, a successful bed and breakfast can be very profitable, with relatively low overheads if managed well.

 

You will also need a bookkeeper, even if they come once a month or they work remotely, you need your books to be in order. 

 

Pay your tax!

 

Step #8 - Hardware and IT

You will also need things like computers to manage your guest house. You may also need to have a landline, CCTV cameras for guests' safety, a printer/ copier at reception.  Also, remember WiFi is the number 1 amenity these days. Get a reliable network provider or you will lose customers.

 

You will also need laundry machines, irons, dryers, kitchen equipment, etc.

 

Step #9 - Branding

Your brand identity is very important. Think wisely about how you are going to brand your guest house. Make your branding stand out without imposing.

 

Also remember, your staff members are your brand ambassadors. Get them uniforms that will make them proud ambassadors of your brand. 

 

Step #10 - Learn, learn, learn

If this is your first time starting your own guest house business, there's a lot to learn. Running a guest house is not as easy as it may seem. We have packaged an amazing guest house management course for new owners. This course will give you all the tools you need to open and run your business successfully. Enroll and study in the comfort of your own home.

 

 

 

Are you planning to open your very own B&B or Guest House? Where are you based? We would like to hear from you. Please leave a comment below. 

 

Warm Regards, 

 

Samkeliso Nkwanyane

Hospitality Coach, Customer Experience Optimization, Speaker and Consultant