Is your Bed and Breakfast business paying you less than the minimum wage?

I read some research at the weekend which got me wondering exactly how much are we being paid to do all that we do in our B&B businesses.

Did you know that the average annual turnover for a European B&B is just 18,000 euros?  And that over half of those B&B businesses are making less than 10,000 a year.   So that got me thinking and here’s what I found…

If we’re doing all the cleaning, all the washing and the ironing, and all the bed-making, plus cooking breakfasts and  meeting and greeting, then it’s highly likely that we’re paying ourselves less than 9 euros an hour, which is less than the minimum wage here in France.

And for those with logical brains, and are asking “how did she work that out?” here’s what I did:

Imagine we have 3 rooms (average is 3.2 average), and that we’re open for 9 months or 36 weeks during the year.  That means that we have 36 (weeks) x 7 days = 252 x 3 (rooms) which makes 756 rooms available in any given year.

And if we’re charging 74 euros per room (the average amount) then our potential income is 55944 euros, if we’re fully booked every night.

However, if our gross income is just 10,000 a year, then we’ve only sold 135 rooms.

Let’s say we’re making 60% gross profit, after we’ve taken off all the costs involved, such as ingredients for breakfast, extra electricity, extra water and heating, wear and tear and replacements, we’d be left with 6000 euros for ourselves.

If we allow an hour per room for the cleaning, and I know you may be able to get a room done in half an hour, but sometimes it does take longer  (135 hours).  Then we add on the washing and ironing time, at say half an hour per room (71.5 hours).  Add  the amount of time it takes to prepare, cook, serve and clear up after breakfast (1 hour per room = 135 hours).  Meeting and greeting the guests and chatting and helping them to find what they need in your area could probably account for another hour per room (135 hours)  plus another hour per room for the time we’re waiting around (135) then I don’t think it’s too wide of the mark to say that we could be making just 9.8 euros per hour.

And what if there were two of us?

It’s a sobering thought isn’t it?  It certainly made me sit up and take notice when I worked this out in my own B&B business just a few years ago.  It was really just a hobby, an ever-demanding hobby, and I didn’t want to live my life making just 9 euros per hour, regardless of how much I enjoyed it.  Whichever way I cut it, 10,000 euros a year isn’t very much at all compared to the work involved.

If you want to change your B&B from a demanding hobby into a proper business that pays you what you’re worth, then I’d love for you to join me on a FREE Webinar happening online on Monday 27th February at 7pm GMT.  You can find all the details HERE.

I’m looking forward to helping you.

Yvonne x

 

 

 

6 Responses to “Is your Bed and Breakfast business paying you less than the minimum wage?”

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  1. ntathu allen says:

    Sobering thought when you break it all done. Thanks for insight. Its so easy to undersell self without realising exactly what we are worth. Take care and thx

  2. Yvonne

    In my experience as an accountant over the years, this is all too common. The accountant who bought my practice found a way of showing one of the clients he took over from me who was also a friend, a chef, that despite gross income being close to £80,000 a year, his effective net rate of pay was less than minimum wage. It’s all about us taking for granted what we put into our businesses, our need to be perfectionists, under-estimating what our time is worth or omitting to include it as a cost of sale at all, lack of self-worth. Oh, how long have you got? The list is of contributory factors is sadly as long as the proverbial piece of string.
    Thanks for the timely reminder to self-employed readers. We could all stand to keep timesheets so we cannot fool ourselves about precisely how much time we are at the coalface.

  3. Mmm, food for thought Yvonne. I’d be really interested to know how you overcome that, other than filling your B&B. All those things you mention feel as though they’re integral to running a B&B. What can you cut down on?
    Allison

  4. Bart says:

    Great article, Yvonne. The facts you present are sobering indeed. I do agree that a lot, if not most, B&B’s have a significant amount of untapped potential. Good luck with your webinar.

  5. Brilliant, Yvonne. This post immediately made me think, ‘wow, this woman’s switched on’. Some pretty nifty maths in there and very practical helpful advice. best, Sally