Bed and breakfast business plan pdf

CONFIDENTIAL EXECUTIVE SUMMARY

OAKVIEW MANOR Bed & Breakfast CONVERTIBLE DEBT OFFERING, $650,000.00, $25,000.00 PER UNIT

BUSINESS PLAN Prepared October 2012

Contact Information

Indira Keller 2900 Westfork Drive, Suite 401 indirakeller@me.com Baton Rouge, Louisiana 70827, USA www.maisonblanchehome.com 1-225-361-6306

Oakview Manor Bed & Breakfast i

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Table of Contents

Executive Summary .................................................................................1 Who We Are.............................................................................................................................................................1 What We Sell ...........................................................................................................................................................1 Who We Sell To ......................................................................................................................................................2 Financial Summary ..............................................................................................................................................3

Products and Services.............................................................................4 Products and Services .........................................................................................................................................4 Competitors............................................................................................................................................................4

Financial Plan ...........................................................................................6 Sales Forecast .........................................................................................................................................................6 Personnel Plan .......................................................................................................................................................7 Budget ......................................................................................................................................................................8 Profit and Loss Statement...................................................................................................................................9

Oakview Manor Bed & Breakfast 1

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Executive Summary

Who We Are

• 30811 Greenwell Springs Road, Baton Rouge, Louisiana 70739

• Investor: Convertible Debt Offering, $650,000.00, $25,000.00 per unit

Offered at $650,000.00, This 6 bedroom 6 bath distressed home called, Oakview Manor, waspatterned

after Oak Alley Plantation in design. Built in 1984, The Oakview Manor is a luxurybed and breakfast

located in the town of Greenwell Spring, Louisiana a suburb of Baton Rouge.The Oakview Manor will

need some rehab to bring it to a marketable state. The home sits on 7.4acres surrounded by live oak trees,

numerous fruit and tropical plants, a pond, several gazebos, a 18 x 36 enclosed pool with a new liner, a

15x32 workshop, and several storage areas. TheManor will be a full service bed and breakfast & Event

Facility offering guests breakfast anddinner as well as numerous other amenities. Targeted at the baby

boomer generation, the Manorwill be an exclusive place to stay for millions of travelers. It will be owned

and operated byMBH Investment Group, LLC. The first floor contains the main living areas---Formal

living anddining, large Great Room/Den, kitchen and breakfast rooms, Master Suite, laundry room,

anotherlarge bedroom and an elegant foyer with an exquisite circular staircase! The 2nd floor has 4

largebedrooms and a sunroom. The 3rd floor is sheet rocked and could easily be made into 2 more

bedrooms and a bath. Atop the house from the 3rd floor is a couplet which allows for terrificviews of the

countryside!

What We Sell

The Oakview Manor is a luxurious bed and breakfast (B&B) in the town of Baton Rouge,Louisiana. As a

niche of the hospitality industry, the bed and breakfast business is rapidlyexpanding as travelers begin

looking for alternative places to stay. Today, bed and breakfasts canbe found almost anywhere and are

even beginning to offer numerous additional services as a wayto draw in customers and capitalize on the

industry. Below is a brief description of the bed andbreakfast (B&B) industry�s history, followed by a look

at the current industry, a business plan,marketing analysis and employee handbook.

The Manor will be owned and operated by MBH Investment Group, LLC. Additional employees will be

hired as needed throughout the year. In order to keep costs low, most of the work will be done by the

owner.

Objectives

1. To open the Oakview Manor as a successful, luxurious bed and breakfast in the BatonRouge area.

Oakview Manor Bed & Breakfast 2

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2. Offer rates competitive with local lodging alternatives in the area, while providing a oneof a kind

experience that will continually bring in returning and new guests.

3. Display an average of 80% occupancy rate during the winter and summer seasons anda 60% rate

during the off seasons during our first year with progressive increases infollowing years.

4. Offer incentives and promotional packages to draw in travelers during the off season.

5. Increase and establish exposure to international markets and baby boomers through

marketing techniques such as social networks, travel and city sites, as well as bed and breakfast

sites.

Who We Sell To

Our mission is to offer travelers a unique, luxurious experience at a local bed and breakfast in the

mountains. Oakview Manor offers guests a “home-like” feel while still providing guests with an

experience unlike those found in the other local accommodations. Highly personalized, we will treat each

guest as if they were a relative in our own home by offering exceptional customer service.

Directed at guests ages 50 and up, Oakview Manor focuses on creating an exciting stay forvisitors. Taking

a cue from the cruise ship industry, Oakview Manor offers guests exciting dayand night activities while

providing them with every amenity needed to satisfy their comfort. Onreturn from their long day on the

slopes, golf course or trails, guests can expect to find set menuhome cooked dinners followed by wine

tasting, canvas and cocktails, music, movie and cardnights and other exciting activities before turning in

to bed.

To increase revenues we intend on collaborating with local attractions to entice guests and

offerpromotional packages and discounts. In the off-season, we expect to maintain occupancy ratesby

offering packages that favor attractions such as hiking, fishing and golfing. By exclusivelydirecting

business at the 50 and over demographic, guests can avoid dealing with small childrenand young adults

and enjoy a relaxing experience. We will also provide guests with any theinformation they need on the

area and attractions.

Amenities include:

� King size beds in each room.

� Complimentary personalized wine glasses, and wash cloths.

� IPod alarm clock/players in each room.

� A common flat screen TV and individual room flat screens as well.

� Library of classic and modern novels for pleasure reading.

� Daily high tea sessions, and assortment of coffee blends.

Oakview Manor Bed & Breakfast 3

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� Daily breakfast and set dinners.

� Free wireless internet.

� Information on local activities, trails and neighboring attractions.

Financial Summary

Financial Highlights

The sales forecast for Oakview Manor is based on optimistic occupancy assumptions for the first year and

years thereafter. Because we are only offering 5 rooms, our occupancy on average will tend to be higher

than the standard median bed and breakfast rate of 44% (Thorsen, 2009).

The bed and breakfast will be opened in December, but does not expect occupancy to pick upuntil

January, during the peak winter season; for this reason, we have estimated occupancy at50%. Moving

forward into the spring and summer seasons, we expect to see a 30% occupancyrate in the spring as it is

considered downtime. Having established some identity in theMammoth Lakes market, we expect to see

occupancy increase to 60% throughout the summerfollowed by rates dropping again to 30% during the

October and November months. As the peakseason resumes in December, we expect 60% occupancy

again. In year two, we estimate 80%occupancy in peak seasons and 40% in off season. Year three expects

90% peak season and 60%off season, followed by 100% occupancy in year four during peak seasons and

60% off seasons.

Sales by Month

Oakview Manor Bed & Breakfast 4

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Products and Services Products and Services

Oakview Manor offers a “homey, yet luxurious” feel for guests looking for somewhere otherthan a

mundane hotel, motel or condo. We will offer guests breakfast, set dinners, activities, andspa specials. The

idea of the luxury hotel industry depicts an image of expensive prices, numerous staff, and high-end

fixtures. In the hospitality industry, “luxury hotels are showing some signs of life, but they're coming at a

hefty price”. As the current recessions seem to be ending, the desire for luxury hotels is coming back, but

at a discount. Hotels are cutting prices and eliminating services in order to maintain profits. As a

“luxurious” bed and breakfast in the Baton Rouge area,it will be imperative to offer the quality and value

guests expect at affordable prices. While the initial investment will create the luxury atmosphere, it is up

to the owner and any employees to create the upscale service. Marketing to the baby boomer generation,

it is important that services provided be comfortable and up to their expectations. Today “luxury travel

must work hard to deliver magic, surprise and serendipity” (Kournelis, 2010). Creating luxury

accommodations at competitive prices, while retaining that „home� feel will provide guests everything

they want today. The location will give guests the opportunity to create experiences and once in a

lifetime vacations.

Competitors

The major competitors in the area include the condos, hotels, campgrounds, and high-end resorts that

currently dominate the market. A list of the local hotels can be found in exhibit 4. The top three

competitors compared for further analysis were chosen based on their accommodations,amenities and

environment. These include the Bocage Plantation, The Stockade Bed &Breakfast, and Avenue Inn Bed &

Breakfast.

Bocage Plantation Inn

The Bocage Plantation Inn is a local established bed and breakfast in Darrow, Louisiana which is in a

suburb outside of New Orleans. This would be the Oakview Manor�s greatest competitors because it

offers many of the same amenities at competitive prices. They offer a “homey atmosphere, with a full

complimentary breakfast each morning and hors devours in the afternoon” (bocageplantation.com).

Rates are reasonable and are based on a mid week and weekend basis $250.00 plus the 13% transient

occupancy tax. Rooms available are 1 full bedroom. The interior is “New England Colonial style and

provide a private bath and cable television (bocageplantation.com). Summer and winter packages are also

available. There are a total of 5 rooms.

The Stockade Bed & Breakfast

The Stockade Bed & Breakfast is a local luxury inn offering 5 rooms and many similar roomamenities. The

inn offers a number of services as well including, shuttle service, complimentaryski storage, Jacuzzi and

sauna, a billiard room, complimentary breakfast as well as free Wi-Fiand pet friendly rooms. Interior wise,

Oakview Manor Bed & Breakfast 5

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this will be the closest to the Oakview Manor. Several ofthe packages offered include the “early winter

booking, massage therapy, romance package andthe lift and lodging package” (thestockade.com). Rates

range between $135 and $215 during theoff season and $132 and $299 during the peak season.

St Gemme de Beauvais

Finally, the St. Genne de Beauvais is a historic hotel local in Ethel Louisiana and may be oneof the least

expensive in comparison to the Oakview Manor. Offering numerous amenities as well, the St. Gemme de

Beauvais offers free breakfast and Wi-Fi,and has a top-notch lodge feel. Rooms offered include chalets,

suites, kings, double queen and lodge rooms (http://www.stgemmedebeauvais.com). Rates offered can

range anywhere between $100 up to $150.

Oakview Manor Bed & Breakfast 6

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Financial Plan Sales Forecast

Sales Forecast

FY2013 FY2014 FY2015

Unit Sales

Room 1 11 12 12

Room 2 11 12 12

Room 3 11 12 12

Room 4 11 12 12

Price Per Unit

Room 1 $25,246 $25,246 $25,246

Room 2 $25,245 $25,245 $25,245

Room 3 $28,750 $28,750 $28,750

Room 4 $28,750 $28,750 $28,750

Sales

Room 1 $277,706 $302,952 $302,952

Room 2 $277,695 $302,940 $302,940

Room 3 $316,250 $345,000 $345,000

Room 4 $316,250 $345,000 $345,000

Total Sales $1,187,901 $1,295,892 $1,295,892

Direct Cost Per Unit

Room 1 $10,500 $10,500 $10,500

Room 2 $10,500 $10,500 $10,500

Room 3 $10,500 $10,500 $10,500

Room 4 $10,500 $10,500 $10,500

Direct Cost

Room 1 $115,500 $126,000 $126,000

Room 2 $115,500 $126,000 $126,000

Room 3 $115,500 $126,000 $126,000

Room 4 $115,500 $126,000 $126,000

Total Direct Cost $462,000 $504,000 $504,000

Gross Margin $725,901 $791,892 $791,892

Gross Margin % 61% 61% 61%

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Sales by Month

About the Sales Forecast

The bed and breakfast will be opened in December, but does not expect occupancy to pick upuntil

January, during the peak winter season; for this reason, we have estimated occupancy at50%. Moving

forward into the spring and summer seasons, we expect to see a 30% occupancy rate in the spring as it is

considered downtime. Having established some identity in theMammoth Lakes market, we expect to see

occupancy increase to 60% throughout the summer followed by rates dropping again to 30% during the

October and November months. As the peak season resumes in December, we expect 60% occupancy

again. In year two, we estimate 80%occupancy in peak seasons and 40% in off season. Year three expects

90% peak season and 60%off season, followed by 100% occupancy in year four during peak seasons and

60% off seasons.

Personnel Plan

Personnel Table

FY2013 FY2014 FY2015

Desk Manager $32,084 $36,050 $37,132

Housekeeper $12,320 $13,440 $13,440

Total $44,404 $49,490 $50,572

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About the Personnel Plan

The personnel forecast reflects modest raises for the one Desk Manager staff each year. It is expected that

lower-level staff may turn over, but the positions will be systematized to an extent that this does not

disrupt the business. There will be a contract housekeeping maid part-time

Budget

Budget Table

FY2013 FY2014 FY2015

Expenses

Salary $44,404 $49,490 $50,572

Employee Related Expenses $1,605 $1,803 $1,857

Marketing & Promotion $450 $0 $0

Utilities $2,750 $3,000 $3,000

Office Supplies & Equipment $2,650 $1,200 $1,200

Insurance $650 $650 $650

Lawncare $1,650 $1,800 $1,800

Total Expenses $54,159 $57,943 $59,079

Expenses by Month

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About the Budget

Marketing expenses will be higher in the first year to announce the opening of the firm and will drop

after that. Most expenses will show small increases each year as the business will remain in the same

location over the first three years. The mortgage payment will change when the property is refinanced at

3.5% rate rather than 12% from private investor in the first 6-12 months.

Startup Costs

Start up cost will include buying a computer and printer all with new furnishing for the home decor. The

home will need considerable renovation to be brought forward as a modern Interior. The Exterior will

remain as a stately Plantation Style Home.

Profit and Loss Statement

Profit and Loss Statement

FY2013 FY2014 FY2015

Revenue $1,187,901 $1,295,892 $1,295,892

Direct Cost $462,000 $504,000 $504,000

Gross Margin $725,901 $791,892 $791,892

Gross Margin % 61% 61% 61%

Expenses

Salary $44,404 $49,490 $50,572

Employee Related Expenses $1,605 $1,803 $1,857

Marketing & Promotion $450 $0 $0

Utilities $2,750 $3,000 $3,000

Office Supplies & Equipment $2,650 $1,200 $1,200

Insurance $650 $650 $650

Lawncare $1,650 $1,800 $1,800

Total Expenses $54,159 $57,943 $59,079

Operating Income $671,742 $733,949 $732,813

Income Taxes $60,457 $66,055 $65,953

Net Profit $611,285 $667,894 $666,860

Net Profit / Sales 51% 52% 51%

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Gross Margin by Year

Net Profit (or Loss) by Year

About the Profit and Loss Statement

The company generates a profit as sales revenue gets above the break-even line. A push on sales will be

very important in generating bottom line profits and refinancing the initial mortgage will adjust the

payment considerable in the 2nd year.

Executive Summary
Who We Are
What We Sell
Who We Sell To
Financial Summary
Financial Highlights
Sales by Month
Products and Services
Products and Services
Competitors
Financial Plan
Sales Forecast
Sales Forecast
Sales by Month
About the Sales Forecast
Personnel Plan
Personnel Table
About the Personnel Plan
Budget
Budget Table
Expenses by Month
About the Budget
Startup Costs
Profit and Loss Statement
Profit and Loss Statement
Gross Margin by Year
Net Profit (or Loss) by Year
About the Profit and Loss Statement
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