SELLING A B&B

coffee-1284041_1920A Bed & Breakfast, better known as a “B&B” is a quintessential part of a city like Port Elizabeth, South Africa.

A B&B is first and foremost a business, which is conducted from a home, which has municipal approval to conduct this type of business. It is not necessary, that the property from which the business is conducted be owned by the owner of the property, however many municipalities have strict laws which affect B&B’s.

It is not uncommon to see estate agents listing B&B’s principally because it is reasoned that the business is apparently focussed on the property and estate agents sell the property, so give it to an agent to sell.

It may, however, be noted that a B&B is a business first which is integrated into the property. An agent would have to:

  • understand financials to understand the health of the business;
  • HR to understand the employment situations of the employees;
  • understand contract law to determine the purchaser’s obligations to service providers;
  • have an insight into occupancy levels, seasonal trends, and profiling the clients of the current and future clients of the B&B;
  • understanding the tourism dynamics;
  • being able to establish a cross section of the type of clients and earning potential to establish trends;
  • understand the legislative frame where the B&B operates and its degree of compliance;
  • Basic tax concepts;
  • et cetera.

In short, not only must the candidate to market and sell the B&B understand business, law, compliance, risk, and have an understanding of basic tax concepts but he or she must have a dedicated panel of experts to assist.

There will always be a lone voice making the point that surely all an agent does is act very much like a hunting dog who finds the prey for the attorney who will weave his or her magic and everything will be fine. There will always be those who argue this point.Noel Burch the

Noel Burch introduced the levels of how people acquired knowledge and in this model, the very first level is where a person does not know what they do not know. Burch coined the phrase “unconscious incompetence”, which captures the position of someone who finds themselves in a position where they are not adequately experienced or equipped to understand what needs to be done. At this point, it is not uncommon for people to “wing it”.  I am not saying this is the position with all estate agents but it is vital to ensure that the agent you choose not only has practical experience but also verifiable knowledge in these key areas.

How do I address client’s concerns about my ability to sell a B&B?

Legal:

  • I hold a B.Proc degree (Four-year law degree);
  • Admitted as an attorney (1999); notary (2001); and conveyancer (2002) – ceased practice in 2014 (now on the roll of non-practising attorneys);
  • I practiced general law, attended on labour matters; and business sales;
  • Apart from general legal experience I am specialised in property matters as a conveyancer;
  • It also places me in an ideal position to assess risk;
  • I have an understanding of contract law; and
  • Liaise on a higher level with the legal, insurance and financial experts.

Financial:

  • I studied accounting at university, along with financial and management accounting, while studying towards an MBA.
  • My experience has allowed me to identify trends in accounts data and management accounts which highlight the benefits a buyer would be looking for.
  • Understanding the income of the business, not only assists in selling it quicker but also for a better price.
  • Understanding the multi-year financials of the B&B also assists in determining its valuation as a business.

Marketing

  • What I enjoyed most in my MBA studies was the Marketing and Strategy modules and these I apply to not only identify the present strengths of a B&B but also new ways of making the business more profitable;
  • The correct marketing strategy is also key when viewing the business holistically as opposed to just brick and mortar.
  • The complete understanding of the comprehensive whole of what the business actually is and its current position allows for proactive corrective steps to be taken before the business is brought to market.

Experience as an estate agent:

  • I first qualified as an estate agent in 2002 when I wrote the EAAB exam and earned the CEA designation.
  • Subsequently, I have written, passed, and been awarded both the Professional Practitioner; Real Estate (PPRE) and Master Practitioner: Real Estate (MPRE) qualifications;
  • I have experience dealing with residential and commercial real estate;
  • My skill as a negotiator have been honed both as a deal maker and as a closer since my early days a young attorney and more specifically as a property broker.

If you are thinking of selling or acquiring a B&B in Port Elizabeth, South Africa – give me and my team a call we would love to help you.

 

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