How to Start & Run a B&B BandBED2eBook-1 | Page 19

Example Budget
Budgets can be as sophisticated and complex as you like, but we are keeping to the
essentials here. Your budget should contain all your key financial assumptions, related
to each other in the format of a simple “profit and loss account”. It might look like this:
Annual budget for Rose Cottage B&B
Assumptions:
Room price per night (average for year):
Number of rooms:
Occupancy rate (average for year):
Direct costs* (average per room per night):
Proportion of house used by paying guests**:
£65
three
55%
£9
36%
*The total costs you incur per night per room, eg breakfast ingredients, laundry, toiletries, newspapers, cleaning
materials etc.
**By floor area (ie floor area of guest areas, divided by total floor area of the building).
Using the above assumptions, your annual budget may look something like this:
Forecast revenue (income, or “sales turnover”):
£65 x 3 rooms x 365 days x 55% =
Less direct costs:
365 x 3 x 55% = 602 room-nights @ £9 =
Gross profit:
£39,146
£ 5,420
_______
£33,726
Expenditure (ie “overheads”):
Gas, electricity, water, insurance & council tax::
£4,250 x 36% =
Telephone for B&B business use:
Printing, stationery and postage:
Advertising and marketing:
Subscription to local tourism website:
Total expenditure:
FORECAST NET PROFIT:
£ 1,530
£ 225
£ 100
£ 1,300
£
40
_______
£ 3,195
_______
£30,531
(86% of turnover)