Buying an Existing B & B

Better to buy an existing B & B?

If not then you need consider the alternative, setting up from scratch. Whichever route you take make sure you research all possibilities beforehand.

If you buy an existing business you will hopefully remove a lot of the starting afresh aggravation. It's likely that most of what is in place will be fine with little or no work required to get you up and running from day one.

Of course, changes are likely to be needed so look carefully at what is included and what you will want to change. It may be as simple as a quick coat of paint or it may require structural work to bring it up to your own standards. Remember, that guests today expect things like ensuite facilities so be wary of buying a property without these as you will need to add them at your cost, property layout and building regulations permitting.

Consider also bookings that may be in place already - it can be much easier for you if you don't have to worry about taking reservations from day one.

Look also at the financial statements, if any exist, for the business.

Many people will try to add "goodwill" into the value of a business. Goodwill is regarded as an intangible asset - there is nothing tangible to show for it. Unless you are buying your ideal business goodwill should be discounted. Effectively it disappears when the sellers leave the property, you have to build your own as you start the business. 

Perhaps the most important question you need to ask is "Why is the business being sold?".

If the current owners are retiring then the sale may seem reasonable.

If it appears the business is not profitable, for whatever reason, warning bells should start ringing. Of course, you may feel you can resolve any issues, but take care before making a commitment.

Whether you decide to take on an existing venture or start afresh make sure that you take professional advice before making a decision.

Consider the pros and cons of each and act accordingly.