In 2012 our friend, colleague and The B&B Team member affiliate Scott Bushnell, who sadly passed away this year, wrote an article about trust. I would like to revisit and share his inciteful  thoughts on this subject, the importance of trust and transparency between buyer and seller.

“Just yesterday I received a call from an innkeeper with whom I have had a relationship who was considering selling his inn, a 7 room bed and breakfast inn in a nearby state.  Just what we do!  Thanks for the call!   We opened up a dialog about the inn, its size, its location, discussed the process, and then I suggested he send me a copy of his 2010 and 2011 financials.  You would have thought I was asking for his FBC (first born child).  “I just will not get into the hassles of trying to explain my financials and business with ANYBODY.  Just sell my inn!”  He was adamant and fixed in his stubbornness.

My antennae went up like a dog’s ears at suppertime.  After failing to convince him that this is an important step to understanding the revenue and net operating income of the inn (to help establish its value), we closed our conversation that perhaps the best way to sell his property is as a residence through the local MLS system since a buyer would never be able to get a commercial loan on that property without the bank seeing the financials.  He was satisfied with that…I guess.

But the point is trust.  I lost trust with him.  Was he cheating the IRS and did not want to let anybody discover it?  Were his numbers so poor that I would be trying to sell his inn only on its potential?  Does he even have records?  All kinds of distrustful thoughts went through my head.  I hope all them are wrong.  If a seller, perhaps even unwittingly, withholds information from a buyer, trust is jeopardized, and with the limited number of buyers and the huge inventory of inns for sale, buyers will look elsewhere.  Building Buyer/Seller trust is critical.”

Almost 6 years ago and this scenario, unfortunately, still plays out like a broken record! When our team members get calls like the one Scott described we do our best to educate both buyers and sellers, explaining the process and how best to proceed. These relationships must be based on trust. Both parties must understand that we have their best interest in mind from start to finish.

Besides the initial trust that must be established, there is transparency. From another wise soul:

“Lack of transparency results in distrust and a deep sense of insecurity.” Dalai Lama

I think Scott would be amused that I am quoting the Dalai and him together in this blog!

Hiding information, whether it is in your financial records or condition of your inn, will eventually come out into to the open. It is inevitable. Yes, sometimes something may be buried (like an old oil tank) and the seller may not be aware of it. This happened just recently in one of our transactions. But it was discovered and removed with all parties cooperating, result… kumbaya! Trust was established before the tank discovery which made a huge difference.

More from Scott:

“Innkeepers…think about the “surprises” that made YOU angry when you bought your inn.  We’ve all been there.  Think like the buyer of your inn.  What roadblocks can be removed now to build Trust and not jeopardize the chances of a timely and financially rewarding transfer.”

Thanks for Listening and…

Thank you Scott. Your legacy and wise counsel lives on.

Janet Wolf

Guests love your B&B outdoor living spaces. Right? I know it is February and many innkeepers in the northern climes have stored away their outdoor furniture and put their gardens to rest, but it is never too early to start thinking about spring. Touch up paint on the ‘ol rockers and window boxes or… maybe a fresh new design entirely. Read the following and you may get inspired.

Selling Secret #1: The first impression is the only impression No matter how good the interior of your home looks, buyers have already judged your home before they walk through the door. You never have a second chance to make a first impression. It’s important to make people feel warm, welcome and safe as they approach the house. Spruce up your home’s exterior with inexpensive shrubs and brightly colored flowers. You can typically get a 100-percent return on the money you put into your home’s curb appeal. Entryways are also important. You use it as a utility space for your coat and keys. But, when you’re selling, make it welcoming by putting in a small bench, a vase of fresh-cut flowers or even some cookies.

This tip is from HGTV about home sales (there are 10 of them, worth a read) but it is great advise for your B&B as well, whether you are planning to sell or not. Your outdoor living spaces throughout your property are prime areas to add inviting character to your Inn. I like to advise innkeepers to think of their porches, patios and balconies as extra rooms, just like their interior rooms. These spaces should be as comfortable, clean and inviting (and inspiring) as your common rooms and guest bedrooms.

Need inspiration? Pinterest is a great place to search for it. The B&B Team has three Pinterest boards devoted to B&B outdoor living  inspirational ideas.

• Porches
• Outdoor Kitchens
• B&B outdoor Living & Gardens

Some examples of success  may also inspire. Brian and Charlie purchased the Old Manse Inn in Brewster on Cape Cod three years ago. Since their purchase they have not only upgraded the guest rooms and common rooms but also their outdoor living spaces. The private deck off their Lewis Bay Light Suite is a great example of that comfortable and inviting outdoor space guests love to experience. Talked to Brian recently and he told me since the redo this room went from 25% occupancy to 38%. Success!

Guests not only want to experience the outdoors but want to see it before they book. You know what’s coming next don’t you? Good professional photography. In our visual media world of today, this is not just a recommendation but a necessity!

One of my favorite porch photographs from Christian Giannelli, the Irish Hollow Inn in Galena IL. Now this is an outdoor living room with character!

Whether it is adding new updated patio furniture, a fire pit on the back lawn or a secret garden oasis, get inspired and start making memories in your outdoor living spaces. It’s sure to extend the ‘welcome’ along with the value of your B&B.

Thanks for Listening,

Janet Wolf

February is for lovers…such a familiar line for every bed and breakfast that offers a Valentine’s Day special for the entire month or for the Valentine’s Day weekend. Chocolate covered strawberries, champagne and red roses and that special breakfast. Romance and s__ that’s what you sell! But what about love? I find this a good time of year to reflect on love. What and who we love.

I love old things. Old things that have been loved. I love finding old books. We have a small collection that is cherished. I especially love the books that have something left in them by the original owner. Like the original book of Bambi by Austrian author Felix Salten translated into English in 1928 I found in one of our favorite used book stores.  Among its pages was a newspaper article about the young doe located in the Maine woods that became the model for Disney’s animated Bambi.

I love old houses. Our Inn was a 1813 ship captains home. I know that many of you own or aspire to own old homes that  now welcome guests in their most recent renewed life as bed and breakfasts. Many of these houses have in their past been abandoned and left empty and unloved.  But once they are bought and transformed into bed and breakfasts, the atmosphere becomes lighter, the rooms become fresh and welcoming and the love is apparent and well received by all who enter. The challenge to innkeepers is how to keep that love alive!  All of us at the  The B&B Team visit Inns from time to time that have ‘lost that loving feeling’. It may sound corny but you know what I mean. Something is missing and has left the building. We find it may take some outside eyes to help innkeepers find and rekindle their passion and ‘bring back that loving feeling’. The B&B Team and our ‘Inn Tune-Up’ program loves to play cupid. Take a look at what we offer that may help you bring the spark  back to your relationship with your Inn and your business.

So what do you love? Your family, your husband, wife or partner (old or not!). Love you Rick! Your pets, your cherished collections. Do you love your bed and breakfast/Inn and the business of running it? Hopefully the answer is still yes. The love you feel shows in everything you do in your daily care for your property. It will also show in the value of your Inn. Once you come around to the time to sell, to let go, you want your property to be at its best. You want the next caretaker of your cherished Inn to feel the love and the value you have lovingly created. So keep that love alive. Don’t lose that loving feeling!

Quick side story. We had a guest once ask us if we could ‘guarantee romance’ with his stay at our Inn. Rick answered, “Nope, can’t do that, we can give you a nice room, great bed and all the amenities, the rest is up to you pal!

Thanks for Listening,

Janet Wolf

My antennae went up like a dog’s ears at suppertime.  After failing to convince him that this is an important step to understanding the revenue and net operating income of the inn (to help establish its value), we closed our conversation that perhaps the best way to sell his property is as a residence through the local MLS system since a buyer would never be able to get a commercial loan on that property without the bank seeing the financials.  He was satisfied with that…I guess.

But the point is trust.  I lost trust with him.  Was he cheating the IRS and did not want to let anybody discover it?  Were his numbers so poor that I would be trying to sell his inn only on its potential?  Does he even have records?  All kinds of distrustful thoughts went through my head.  I hope all them are wrong.  If a seller, perhaps even unwittingly, withholds information from a buyer, trust is jeopardized, and with the limited number of buyers and the huge inventory of inns for sale, buyers will look elsewhere.  Building Buyer/Seller trust is critical.  So how is it done?

Like a good Boy Scout…Be Prepared!

• Having complete and accurate records (including taxes…they will be scrutinized during a buyer’s due diligence period)
• Track occupancy by month from year to year.  A buyer wants to see the seasonal nature of the inn (especially to understand what happens in the slow season).
• Have a complete Inclusion/Exclusion list of the furniture and fixtures will transfer with the property and what will go with the sellers.
• For a smaller inn, have a property condition disclosure (available from any real estate agent) prepared.  This is required in many states anyway.
• For larger inns, consider a Seller’s Inspection completed BEFORE a buyer’s inspector finds any defects (and they WILL find the problems!),  This inspection demonstrates full disclosure of the condition of the inn, provides a report accuracy defense in the event the buyer’s inspector overinflates the seriousness of a deficiency, and leads to a corrective plan to defuse emotions and begin negotiations.
• Keep your gift certificate log current
• Open and honest conversations about marketing, buyer’s opportunities, and full disclosure.

When Marilyn and I were looking for our inn long ago (the Dead Sea was only sick back then), the owner of one of our candidate inns pulled me aside and said “Don’t worry about the numbers, Scott.  I put two kids through college on this inn!”.  We left never to return.  If he was willing to cheat the IRS, he was willing to cheat us.

Innkeepers…think about the “surprises” that made YOU angry when you bought your inn.  We’ve all been there.  Think like the buyer of your inn.  What roadblocks can be removed now to build Trust and not jeopardize the chances of a timely and financially rewarding transfer.

Anybody have any trust surprises when you bought your inn?  We would love to hear about them and what could have been done differently.   Scott

]]> https://bbteam.com/blog/ma-and-ar-bbs-for-sale/ Fri, 18 Feb 2011 12:57:47 +0000 https://bbteam.com/?p=2010 Two Select Registry® bed & breakfasts for sale, one in Arkansas and the other in Massachusetts, offer contrasts in style while demonstrating striking similarities.

In Stockbridge, Massachusetts (recall the James Taylor line, “…from Stockbridge to Boston”), The Inn at Stockbridge is a beautiful, historic 15 room bed and breakfast inn that offers its guests a variety of beautifully appointed guest rooms in three buildings. Enjoying a location that takes full advantage of the Berkshire Mountains, the original colonial style home on almost 12 acres was built in 1906 and boasts 7 guest rooms, spectacular common rooms with porches and terraces, and superb owner’s quarters. Two additional buildings, the “Barn” and the “Cottage House” each have 4 over-sized luxury rooms. Whimsical sculptures dot the yard and add a special uniqueness to each guest’s arrival.

At The Inn at Stockbridge, quality amenities and service, which are the hallmarks of Select Registry inns, are what make it very much like another B&B halfway across the country in Hot Springs, Arkansas.

Hilltop Manor Bed & Breakfast has five guest rooms which, in their own way, couldn’t be more different from those at the Inn at Stockbridge. Owned by a young couple who have brought a contemporary flair to their 7,000+ square foot Craftsman style B&B built in 1890, Hilltop Manor offers 1,000 thread count sheets, large flat screen TV’s, and iPod docks in every room. Sitting on over 5 acres on the edge of Hot Springs and surrounded by National Forest, the B&B can tell the tale of famous Prohibition Era gangsters partying into the night and perhaps escaping into the woods during the frequent police raids. Creative packages provide each visitor the opportunity to customize their stay.

While both of these B&B’s are incredibly different, they share a lot in common. They are both members of Select Registry®; they are both upscale lodging establishments that offer their guests a high-end lodging experience; both cater to the needs of their guests in a very personalized way; both enjoy a country setting with convenient access to in-town amenities like restaurants, museums, and entertainment; both are very profitable businesses; and both are represented for sale by The B&B Team®.

Hilltop Manor Bed & Breakfast is available for $995,000, and The Inn at Stockbridge is offered for $2,750,000. Different? Yes. Great value? Double yes! It’s one of the reasons why we at The B&B Team® love what we do because we work with some of the best inns in the country!

In the case of  the Lincolnville Beach (Maine) Oceanfront Inn and Restaurant, its location is superb, but the fact that this offering is comprised of 3 (another trinity!) separate parcels of land make this offering even more enticing and attractive to a buyer, investor or…?

This offering represents the Best of Coastal Maine! There aren’t many commercial offerings today with 400 feet of true water frontage. Positioned between the ocean and Coastal Route 1, this is a one of a kind property featuring 1.2+/- acres of prime oceanfront land. The 3 separate parcels of land, 4 buildings, 250 feet of high visibility US Route 1 frontage and ocean breezes is available today for the discerning Investor, Developer, Restaurateur or Innkeeper.

This is a true Oceanfront commercial property with the location x 3 in the charming mid coast Maine village of Lincolnville Beach on Penobscot Bay. The mid coast of Maine is known as the ‘Jewel of the Maine Coast’ and Lincolnville as the ‘Heart of the Maine Coast’, a great description for a grand location and exceptional opportunity. Think of another oceanfront property once upon a time…of a fellow named Peter Minuit who once looked upon the ‘island of Manhattes’…and may have thought…’location, location, location’.

Maybe this opportunity is your opportunity to enjoy the great real estate trinity of location x 3 and parcels x 3!

Rick Wolf

Competitive athletes share an above-average understanding of the human body and how it works. They rely upon this understanding to prepare for their events by knowing how to stay healthy, increase their strength, and hone their skills to come out a winner. The athlete learns that her body is not just skin and muscle, but dozens of organs that must work together perfectly. She relies upon her own abilities as well as the expertise of doctors, trainers, nutritionists, coaches, referees, and enthusiastic fans. That athlete is you, the innkeeper.

The decision to sell your inn is rather like deciding to take up competitive running, except that in this race, the dash for the finish line must be in tandem with your competitor, the buyer, who is more a running partner than opponent, though it may not always seem that way. It’s called “win-win” racing!

Once the decision is made, you must decide if sprinting, cross country, or a marathon is your preferred race. Like the runner whose finish line is a ribbon across the track, the finish line in the inn sale race is simple: the transfer of ownership from one person or entity to another. If you were running a race, you’d need to think about distance, grade, curves, course surface, timing and pacing, conditioning, and the competition. In selling an inn there is the property itself; the furniture, fixtures, and equipment; there are pricing and marketing, showings to prospective purchasers, offer and acceptance, contracts and side agreements, inspections, loan applications and approvals, income and inventory verifications, and, finally, an exchange of money and title. What happens when one of them fails? Like the human body, can the sale become stressed, ill, or even die? For anyone who has experienced a troublesome or lost sale, the answer is obvious.

After deciding to race (sell), the next step might be to consult a doctor (inn broker or consultant) for a physical to assess the overall health of the business and to help establish a price. Your trainer (again, the broker) can then advise on what conditioning you need before running (preparing the property, inventory, financial records, etc.). Lastly, your coach (hmm, who could that be?) will show you how to make it to the finish line without serious injury (a closed sale at an acceptable price). That broker may also have to act as referee along the way. This is your team.

After making the commitment to sell, listening to the doctor’s advice on pricing is critical. Pricing is very prone to illness, as people without experience often try to perform one of the most critical operations of the entire sale process. Instead of starting off their race in good trim, stretched, and warmed up, they begin with a price that, far too often, if not obese, is at least overweight. Just as poor diet and lack of exercise can lead to health problems and poor performance, an inflated price sets the stage for a prolonged illness, er, inn sale. You might end up in a grueling marathon when all you wanted was a quick sprint or a nice cross country jog.

Let’s assume that the innkeeper has done all the right things, is in good shape, knows the length of the race and how to train for it, and the inn is now for sale at the right price. Heart and lungs are good, brain is in synch. Now comes the time to train (market the property), toning the muscles to look buff (making repairs), taking professional pictures to show off in the best light, and packaging the presentation in one of those spandex suits (comprehensive prospectus). After all, when a prospective buyer takes in all that visual stimulus, you want him to come knocking. But here’s the next area of potential weakness.

Can you really go running with everyone who shows up at your door, prospectus in hand, wanting to preview the track? Is your prospective running partner in your league, or is he maybe a bit too thin to make the cut? In other words, do you know if he can afford your inn? Many inn sales experience leg cramps when, after negotiating a contract and expectations are high on both sides, the buyer is unable to complete the course, usually because he cannot get a loan. How frustrating it is to have the finish line in sight, only to trip on a rough spot at the last minute that, if you’d prepped the course ahead of time, could have been avoided. This disappointment often has a deleterious effect on the heart (crestfallen) and the knees (badly scraped). The remedy is pre-qualification. Unless you are comfortable asking your fellow runner (buyer) if he wore enough deodorant (has enough cash) to avoid being smelly after the race (we’ll just leave that one alone), prequalification is often best performed by the referee, who is used to making tough calls and knows it is part of the job. Got to love those referees!

But there’s more! The buyer is qualified and the seller has accepted a reasonable offer. You’re half way around the course when suddenly the buyer stops in his tracks. In a real foot race this would be good, but in this race, you need the buyer to finish with you. Everything seemed to be fine, but the buyer says that he’d like to have that rough patch of track smoothed over (roof repaired, water heater replaced, west wall repainted, etc.). There are some things you are willing to do, but basically you feel the course should be left as is. You’ve been running it for a long time (it’s never been a problem up to now) and the buyer can do all the smoothing he wants AFTER THE RACE!!! This particular situation can have an effect on the stomach and intestines (churning) and the blood pressure (elevated). Often times your doctor can perform a hasty problemectomy so that everyone continuing on the course will be satisfied and able to compete safely. Go, go, go!

What’s this? Now the officials are saying that you’ve cut a corner illegally; that for five years you’ve been operating with six rooms and the rules say you can only have four! The buyer cries foul and wants you disqualified from the race (he wants out completely), or at least penalized (you should reduce the price). If you did, in fact, cheat, the buyer is justified. This is often manifested in the heart (pounding irregularly) and the sweat glands (waking up in a cold one). However, your doctor says that you’re going to be all right if you can show that you didn’t really cheat but only looked like you’d cut a corner. After a hiatus involving several trips to city hall (and lots of deep breathing) you show the officials that those six rooms really are allowed (or perhaps you agree to a modification that will allow five rooms, which the buyer accepts), and you’re back on track. This is very good for the brain and mind (intense feelings of relief bordering on euphoria).

Coming into the home stretch both runners are tracking each other at a comfortable pace. The fans (your grandchildren in Albuquerque) are rooting you on; the referees are satisfied that all runners have complied with the terms; the judges (lenders) have signed off on the home stretch (the loan); the trainers have seen to it that your leg cramp no longer hurts; and, hand-in-hand (it’s just a figure of speech, folks!) with your buyer you cross the finish line exhausted but smiling. The baton has been passed. You are officially crowned “Former Innkeeper” and your running partner can now drop “Aspiring” from his title and add “Proud.”

A casual observer will see two healthy, smiling, breathless and sweating bodies. Only the runners and their teams will know all the pulled muscles and bruises it took to get there. You will always remember that the team of doctor, trainer, coach, and referee was with you every step of the way. Knowing that all those roles have been executed once again, your professional inn broker can now smile and go home for dinner.