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Executive Summary


    • Olivia and Stan Jordan propose the opening of a new bed and breakfast inn in the historic town of Rocheport, Missouri. In order to stand out among other bed and breakfasts (B&Bs) in the area, the Jordans plan to make the Rocheport B&B the best and most luxurious while remaining competitive in terms of rates. They are able to do this based on the fact that they will do most of the remodeling work themselves, as well as all of the maintenance and service necessary for operation of the business. Olivia has a B.S. in culinary arts and thus is capable of producing outstanding meals, which is an extremely important aspect of a B&B. Stan has been a building contractor for 20 years and has the knowledge and skills to do most of the remodeling work as well as any ongoing maintenance. The Jordans aim is to provide a new place of rest and relaxation for residents from around the state and beyond.


  • Business Overview

    • A bed and breakfast inn is a small lodging establishment, usually a private home, that offers private bedrooms for rent; owners supply breakfast to their guests on the morning of their stay. B&Bs normally offer rooms with private bathrooms and/or a suite of rooms that share a bathroom. Breakfast is usually served in a dining room or the guests’ rooms, and quality and presentation of the food is one of the key factors that distinguish the best B&Bs. Decor is also important; many B&Bs are historic buildings and incorporate Victorian or other historical decor and furnishings. Most owners live in the residence and manage the business themselves, although some may hire outside workers to clean the guest rooms. B&B owners must be friendly and willing to host a variety of people in their homes on an ongoing basis. Leisure travel dominates this sector of the inn-keeping business, attracting in particular guests who enjoy the cultural, historic, and unique aspects of B&Bs.


The Company


  • Products and Services

    • The Rocheport Bed & Breakfast is located in Rocheport, Missouri, on the Missouri River. The home was built in 1915 and is listed on the National Register of Historic Places. With some moderate remodeling, the Rocheport B&B will become a four-bedroom inn. Each guest room will have its own private bathroom, and breakfast will be served in the main-level dining room or on the large, shaded, wood deck at the back of the house, depending on weather conditions.

       

      The goal of the Rocheport B&B is to provide a quiet, relaxing, and enjoyable place to stay for guests looking for a romantic weekend away, a place to relax after a long day of shopping or on the trail, or just some "down time" away from the hustle and bustle of everyday life. The inn is within walking distance of several restaurants and the Katy Trail. The Katy Trail, originally part of the Missouri-Kansas-Texas rail line, is the longest state park in the country and a very popular destination for bicyclists as well as hikers. Rocheport is also home to Les Bourgeois Winery and several unique shops and antique stores.


  • Unique Features/Niche

    • The Rocheport B&B will stand out as the most accommodating and luxurious B&B in Rocheport. In addition to the standard B&B fare for upscale inns, such as exquisite decor, king-sized beds, luxurious bedding, private baths with showers, Wi-Fi, TV/DVD, radio/CD player, and refrigerator with complimentary beverages, the Jordans’ inn will also provide the following amenities: a complimentary bottle of wine at arrival; homemade chocolate chip cookies in the afternoon; 24-hour coffee and tea; spa robes for all guests; free bike rental; a large library of both books and DVDs; and free shuttle services to village attractions. In addition, the inn will feature a multi-level wooden deck off the back of the house with tables, cushioned chairs, and a fire pit; an eight-person hot tub located on the bottom-level deck; and a two-person hammock under maple trees in the backyard. Every detail in the accommodations and surroundings, from the crystal chandeliers in the bedrooms to the c.1870 walnut table with seating for 10 in the dining room, will reflect the highest quality.

      In the B&B industry, the quality of the hosts is also vital to an inn’s success. Olivia and Stan both have an outgoing nature, never-ending energy, and a flare for conversation—characteristics that are critical to making guests feel instantly at ease and welcome.


  • Pricing

    • Room rates at the Rocheport B&B will be on par with the average rate charged by the other inns in the village. For Amber House, rates run from $149 to $239; for School House, $149 to $260; and for Yates House, $169 to $269.

       

      The Rocheport B&B will offer four guest rooms, two with the amenities described under "Unique Features/Niche," at a rate of $169 per night, and two with these amenities plus a gas fireplace and a two-person Jacuzzi tub, at a rate of $259. Rates are reduced by $20 on all weekdays except Friday.


Industry Analysis


  • Industry Analysis

    • B&Bs represent a $3.4 billion industry, according to the Professional Association of Innkeepers International (PAII), and the industry is still growing. Whereas there were only 1,000 B&Bs in the United States serving about 1 million guests in 1990, by 2008 there were more than 20,000 serving over 50 million guests annually. According to a May 5, 2009, Time magazine article, "Americans have a wide array of lodgings to choose from when they take a vacation...Yet more and more people are flocking to bed-and-breakfast inns." As life becomes more complicated and Americans continue to search for ways to "get away from it all," B&Bs will continue to gain in popularity.


  • Market Analysis

    • The market for the Rocheport B&B consists of couples and individuals in the nearby town of Columbia, Missouri (population 94,000), as well as surrounding areas. Because Rocheport is located in the middle of the state, the metro areas of St. Louis (population 2.8 million) and Kansas City (population 2 million), both of which are a two-hour drive from Rocheport, are also considered important markets.

       

      According to a Michigan State University study, most visitors to B&Bs are middle-aged, well-educated professionals in moderately high income brackets. About two-thirds of guests are couples. Eighty-two percent of the people surveyed indicated they were married, and about half had children at home. Newlyweds and empty-nesters accounted for a smaller portion of B&B guests.


  • Competition

    • Although there are three other B&Bs in Rocheport—Yates House B&B, School House B&B, and Amber House B&B—there are plenty of customers to go around, so to speak. The existing B&Bs are often hard to reserve, especially in the summer, due to high demand. Rocheport B&B may pick up those visitors who cannot get a reservation elsewhere, and then once the guests experience the service and accommodations the Jordans offer, it is highly likely that these people will come back as returning guests. Also, the fact that the Rocheport B&B is the village’s newest inn should draw travelers who are interested in sampling a new place or who are attracted to new experiences and ventures.


Marketing Outline & Sales Strategy


  • Business Strategy

    • To the Jordans, people who stay at the Rocheport B&B are houseguests, not customers. The Jordans’ motivation to operate a B&B is based on their desire to meet new people and provide travelers and guests with a unique and enjoyable experience, as well as to use their skills and talents in a positive way. It is this philosophy that will make the Rocheport B&B a success. In this business, those who are in it for the money will not be successful, as they do not have the underlying enthusiasm or drive to provide what is essential to any good B&B: an interest in people and a willingness and desire to serve them well. However, those who do have this passion for interacting and serving other people—such as the Jordans—will accomplish and exceed their business goals as a result of their underlying motivations.


  • Growth Strategy

    • The most effective form of advertising for B&Bs, according to PAII, is word of mouth. The idea is that once guests experience the Rocheport B&B, they will tell others about it, and new business will be generated. In addition, online reviews have become a key factor in the industry. At such sites as BedandBreakfast.com, users rate inns they have visited based on guest rooms, service, value, cleanliness, and dining. A 2009 ComCore study showed that 25 percent of B&B guests surveyed viewed online reviews before deciding which B&B to visit, and 75 percent of those stated that the reviews significantly impacted their decision.

       

      As the Jordans welcome more guests, their reputation as an excellent B&B in the Rocheport area will grow, due to both word-of-mouth promotion and positive online reviews. Such "free" marketing will bring new guests to their inn, and the Jordans can continue to build their client base. According to Harold Alexander of the University of Minnesota Extension as well as many others, "It’s not unusual for guests to return again and again to favorite bed and breakfast...and develop long-lasting friendships with the owners."


  • Advertising and Promotion

    • When they are ready to open the inn, the Jordans will send a press release to local media regarding their new business and what it will offer. They will also run a quarter-page ad in the popular local monthly magazine Inside Columbia, which caters to the same market as the Rocheport B&B. Other forms of advertising will brochures, which will be distributed and placed in tourist information racks in key locations along Interstate 70 (which runs past Rocheport) and listings on web sites such as BBIM, mentioned under "Professional and Advisory Support," as well as similar web sites that provide free listing opportunities.


  • Cost

    • All of the marketing methods are low cost or free and have been proven effective for this type of business. Total upfront costs include the ad in Inside Columbia ($585) and 500 standard brochures ($125). Ongoing costs will occur when brochures need to be reprinted or updated but 500 copies are expected to last three years or longer.

       


  • Customers

    • As mentioned under "Market Analysis," most visitors to B&Bs are middle-aged, well educated, and work in a professional field earning moderately high incomes. Because Columbia is the nearest large town, it will be the focus of marketing efforts. The following statistics regarding the Columbia population are relevant:

      ·         Individuals between the ages of 35 and 54—24%

      ·         Couples with children under the age of 18—27%

      ·         Households with incomes of $50,000 or more—40%

      In addition, Columbia is home to two private four-year colleges and the state’s flagship university, as well as three large hospitals. In 2008 Forbes magazine rated Columbia 11th on its list of Smartest Cities in America, based on the education levels of Columbia-area residents. Columbia also has the highest number of doctors per capita than any other city in the United States besides Rochester, Minnesota, where the Mayo Clinic is located. Such facts illustrate the kind of education and income levels that are typical of B&B visitors.

       

      Columbia is not the only market, however, and the Rocheport B&B will welcome guests from around the United States as well as other countries.


  • Facility and Location

    • The Rocheport B&B is located at 213 First Street in Rocheport, Missouri. The location is zoned as commercial. The Jordans own the adjoining empty lot, which will be used for guest parking.

      The location of the inn is ideal in that it is on the Katy Trail and the Missouri River and is within walking distance of shops and restaurants. Rocheport itself is an excellent location because it is only 2 miles off Interstate 70 and is in the middle of the state, allowing easy access from Kansas City and St. Louis, as well as providing a convenient place for people who are traveling I-70.

       

      Currently the home consists of six bedrooms (two main level and four upper level) and two and a half bathrooms (one and a half main level and one upper level). The Jordans will occupy one of the main-floor bedrooms and the adjoining bathroom. The other main-floor bedroom will be furnished for guests. Remodeling on the main floor will consist of turning the half-bath into a full bath, with Jacuzzi tub, and adjoining it with the guest bedroom. Three of the bedrooms on the upper level will be furnished for guests, and one of the bedrooms will be converted into two bathrooms. The remaining bathroom upstairs will be remodeled to accommodate a two-person tub. Total cost of renovations is estimated to be $50,000.


  • Legal Environment

    • The following two worksheets detail start-up costs and expected profits for the first three years. Loan payment is calculated based on a 7 percent fixed-rate commercial loan. First-year expected sales and food costs are based on the national average occupancy rates at B&Bs (40%); second- and third-year figures are based on an expected annual growth rate of about 10 percent. Expenses are calculated to increase by approximately 5 percent per year in addition to the increases incurred by accommodating more guests.


Management & Organization


  • Personnel

    • Olivia and Stan Jordan will manage the business on a day-to-day basis. Stan will perform all routine maintenance on the house and grounds, and Olivia will do all the cooking and cleaning. With Olivia’s degree and experience with cooking, she will be able to plan and create extraordinary and creative breakfasts, which is a vital part of the B&B experience.


  • Professional and Advisory Support

    • The Jordans plan to join Bed & Breakfast Inns of Missouri (BBIM), which hosts an annual conference, provides a weekly state-specific newsletter on happenings in the industry, and manages an online forum of others in the business. Member inns can use the BBIM logo on marketing materials, showing that they have been inspected and approved by a reputable agency. The inspection and application fee is $100. BBIM also provides opportunities for free online marketing, including a listing on the BBIM site, which includes a link to the individual inn’s web site and a variety of ways to search for inns, such as location, specialty, or route; gift certificates that are good only at BBIM inns; and a frequent guest program.



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