How to Start a Bed and Breakfast in Ontario

Table of Contents

Introduction
Getting Started
Regulations
Taxation
Financing
Managing Your Operation
Associations
Next Steps

Introduction

A Bed and Breakfast, commonly known as a B&B, is a business that provides short-term accommodations in a private home or other comparable location and traditionally includes breakfast as part of the service. Accommodations can vary from one establishment to the next, as each building has its own unique characteristics. Locations that might provide B&B accommodations can range from historic buildings and cottages, to houseboats and private homes. The amenities offered by different B&B businesses can also vary. In some cases, you may have private rooms with private bathrooms, or several private rooms with shared bathrooms. B&Bs generally emphasize a high level of personalized customer service and will often be connected to local tourist attractions.

Getting Started

When you start a business there are several things to consider before you can sell your product or service. Most businesses in Ontario need to complete a minimum of three basic steps:

• Find out what licences and regulations apply to your type of business
• Choose a business structure and register or incorporate
• Determine if you will need to collect and remit HST

Our business start-up guide will give you more information on these steps and other basic requirements for starting a business in Ontario.

Read online:
Business Start-Up Guide

Regulations

Your business may need licences and permits from the federal, provincial and municipal levels of government.

In addition to the information you will find in this guide, you can use BizPaL—an online search tool—to find licences and regulations that may affect your business. You can also contact the Business Info Line to speak to someone about starting your business.

Use online:
Permits and Licences Wizard

Contact the Business Info Line:
1-888-745-8888

Municipal Requirements

The local municipal government may classify a B&B under another type of industry. You can contact your local municipality to verify how your business will be classified and what regulations will apply to you (for example a Food Handler license).

Additionally, most municipalities also require a building permit before alterations or new construction begins. It is important to check zoning regulations before signing any binding contracts and to obtain the necessary building permit(s) before beginning alterations or new construction.

Read online:
Association of Municipalities of Ontario

Some common licenses, permits and regulations that may apply to your bed and breakfast include:

Food Safety and Labelling

Your local health unit is the main contact for information on food safety. Local health authorities are responsible for carrying out food service inspections.

You should contact your local health authority and arrange an inspection of the premises/equipment/and processes to make sure your business is complying with provincial and federal legislation.

The following link provides a list of contact information for local health authorities that perform inspections on restaurants and food businesses in Ontario.

Read online:
Local Public Health Contacts

In addition to contacting your local health unit, if you are involved in the production, service or processing of food products, you will need to comply with safety standards and labelling regulations from the Canadian Food Inspection Agency (CFIA) and the Ontario Ministry of Agriculture and Rural Affairs (OMAFRA).

Contact CFIA:
1-800-442-2342
Regulated products and sectors

Contact OMAFRA:
1-877-424-1300
Regulations for the food industry

Smoke-Free Ontario

The Ontario government prohibits smoking in all enclosed workplaces and enclosed public places. Find out what your responsibilities are, what is required for inspections and how to get “No Smoking” signs.

Contact your local Public Health Unit:
Public Health Unit Locations
Smoke-Free Ontario – How the Act Affects You

Read online:
How the Act Affects You - Employers & Employees 
How the Act Affects You - Bars & Restaurants 
How the Act Affects You - Hotels, Motels & Inns 
How the Act Affects You - Enclosed Public Places 
How the Act Affects You - Signs for Stores and Public Places

Building and Fire Codes

As a provider of accommodations you will likely need to meet additional requirements under the Ontario Building Code and the Ontario Fire Code to ensure the safety of your guests. You can contact your local Fire Department and Municipal Building Department to make sure that your business premises meets all local safety requirements.

Read online: 
Hotel Fire Safety Requirements

Music Licence

When your business uses recorded music, you are responsible for obtaining the right licence(s) for that use. The Copyright Board of Canada works with individual copyright collective societies who provide music licensing. Contact the following two organizations for more information.

Legal Questions

If you have legal questions, contact a lawyer who deals with business regulations. The Law Society of Upper Canada's Lawyer Referral Service may be able to assist you in finding a lawyer, based on your needs.

Contact the Law Society of Upper Canada:
1-800-268-8326
Law Society of Upper Canada's Lawyer Referral Service

Taxation

Depending on your location and the type of products or services being offered, federal, provincial and/or municipal business taxes may apply.

Read online:
Taxation Guide

If you sell goods and services in Ontario, you may need a business number to collect and remit the Harmonized Sales Tax (HST). Most businesses that make less than $30,000 in any 12 month period are not required to charge HST; however, you can register voluntarily and claim input tax credits. Speak with the Canada Revenue Agency (CRA) for more information.

Contact CRA:
1-800-959-5525
Canada Revenue Agency – Business

Additional Harmonized Sales Tax (HST) information for bed and breakfast owners in Ontario

The Canada Revenue Agency also provides information on the following HST requirements and rebates that could apply to your business.

Contact the Canada Revenue Agency (CRA):
1-800-959-5525

Financing

Canada Business can help you find government financing options for your business. There are programs that apply to businesses across Canada, and others that apply only to businesses in Ontario. Use the Canada Business financing search tool or browse by type of financing.

You can also access Canada Business information through the ONe-Source online financing wizard. The wizard guides you through 3 easy steps to create a personalized list of results for Ontario business financing programs.

Search online:
Canada Business: Government Grants and Financing
ONe-Source Ontario Business Financing Guide

Contact the Business Info Line:
1-888-745-8888

The Ontario Business Program Guide (OBPG)

You can find Ontario-specific assistance for your business including advice, financing options, tax incentive programs and more using the Ontario government’s free online directory of support programs for business.

The OBPG provides:

• An at-a-glance directory designed for quick and easy scanning
• Programs and services for Ontario businesses
• Basic information on programs as well as links you can follow for more detailed information

Search Online:
Ontario Business Program Guide

Managing Your Operation

The success of any business starts by setting goals and managing the ups and downs of daily operations. Here are some key factors to consider when starting a bed and breakfast.

Accommodations Rating Services

An Accommodations Rating Program rates similar accommodations according to how clean, comfortable and safe they are, along with the quality of the facilities and amenities available on site. Participating properties are inspected and rated to ensure they meet consumer expectations. A higher star rating indicates that the facilities, guest services and amenities are more extensive.

If you wish to have your establishment rated, contact your local bed and breakfast association for a listing of Canadian companies who offer this service in your area. (see also Section 7: Associations)

Note: The majority of lodging properties are in the two to three star range; there are only a handful of five-star properties in Canada.

Insurance

Having the correct business insurance can provide peace of mind. Contact an insurance agent to discuss your business insurance options, or to develop a plan that is right for your business.

You may also wish to contact your local chamber of commerce or industry association, as some organizations offer members lower rates on their business insurance.

The following list is included to remind you not to overlook the complex areas of business insurance. It is best, however, to discuss your specific requirements with your insurance agent.

Basic insurance:

• Fire insurance (extended coverage on buildings and contents)
• Liability insurance
• Burglary protection (theft coverage)
• Dishonesty insurance (covers thefts by employees)

Read online:
Insurance for Your Small Business

Marketing/Advertising

Whether you have a small bed and breakfast or a large one, you need to tell people who you are, where you are located and how to contact you. Some methods of advertising include placing ads in local newspapers, on radio, sending out direct mail pieces and brochures and including your business information with any local tourism initiatives in your region. Outdoor signage and word of mouth can also be effective means of advertisement. How well you market your business and interact with your customers can vastly influence your success.

You can also contact a local destination marketing organization or visitor centre to discuss promotion and marketing options that may be available to your business. Some additional options to consider are listed below.

E-Business 

E-business is about using the Internet to provide better customer service, streamline business processes, increase sales, and reduce costs. You can explore the business benefits of using tools like email, online banking solutions, websites, supply chain management software and web-based customer relationship management solutions.

Read online:
Doing Business Online

Professional Services

The use of business support services can be essential to the success of a small business. Professionals can provide knowledge and expertise to ensure your business is operating efficiently.

As an entrepreneur, there are several types of professional business services you can consult:

• Lawyers
• Real estate agents
• Insurance brokers
• Bookkeepers
• Accountants

Basic Bookkeeping

A good record keeping system should be simple to use, easy to understand, reliable, accurate, consistent and designed to provide information on a timely basis.

Note: All staff working with cash should be trained to recognize counterfeit currency.

The legal requirement concerning financial records specifies only that there be a permanent, accurate and complete record of your daily income and expenses. There are many types of record books and bookkeeping systems available. For example:

• Double entry bookkeeping
• Commercial bookkeeping systems
• One-write systems
• Computerized systems
• Single entry bookkeeping

Read online:
Bookkeeping and Accounting

Setting the Right Price

Setting the right price is important in ensuring the success of your business. Here are a few questions you may want to consider:

• What is the current price for your range of services in the industry?
• What is your competition charging?
• What is the total cost of running your business?
• What is the minimum acceptable profit you need to generate from your business?

When determining your fees, make sure you include the cost of your labour, the overhead and the expenses that will be incurred.

In the end, the right price for the service is the price that the consumer is willing to pay. Correct pricing decisions are often key to successful business management.

Read online:
Pricing

Choosing a Location

For most businesses, choosing an appropriate location is critical. Your ideal location will depend on your business needs, zoning restrictions and where your customers and competitors are. Taxes, noise and the local business environment are also important factors to consider when reviewing your options.

If you are considering setting up your business in your home, make sure you know what regulations and restrictions will apply to your home-based business before you start.

Read online:
Choosing and Setting Up a Location
Home-Based Business

Furnishings and Equipment 

When furnishing a bed and breakfast, here are some items to consider:

Bedrooms

Generally, each guest room should have a bed, bedside table(s), dresser, mirror, chair(s), window screens and coverings, closet, smoke detector, wastebasket, clock, hangers, locking door and a posted rate card. Extras could include:

• A good quality mattresses
• A full-length mirror
• Desk and desk chair
• Luggage racks
• Writing materials, newspapers, and brochures describing local attractions or a listing of local restaurants

Linen 

• Ensure that you have enough changes of linens to accommodate the number of guests you have, particularly if you send laundry out.
• Use new bedspreads, throw blankets, blankets, sheets, pillow cases and allergy-free pillows.

Bathrooms

• Provide a bath towel, hand towel, face cloth, wrapped soaps and drinking glass (paper cups in shared bathrooms) for each person.
• Install towel racks and good lighting near the bathroom mirror.
• Remove or lock away all personal belongings, medicines, cleaning solutions, toxic or hazardous substances.

Lighting 

• Install wall outlets and lights near beds, mirrors, desks and chairs.
• Pay attention to the importance of lighting - diffuse light evenly throughout the room; avoid harsh overhead lighting and provide reading light on each side of a bed.

Flooring 

• Ensure floors can withstand the traffic of guests coming and going.
• Use rugs or mats that lie flat to prevent skidding or tripping.

Your business will need equipment and furniture, and it is important to decide what you need and how much you want to spend. 

Cost Control

You must have procedures for controlling inventory and costs. Ask people in your industry for information about procedures for:

• Purchasing – Most of the time, purchasing is done over the telephone, by fax or online. Often no contract is signed between the purchaser and the supplier; it is essential that you choose your supplier carefully.
   
• Receiving – Check all deliveries against the Purchasing and Receiving Form, in three ways: quantity, price and quality. Make sure specifications are met. Careful recording will show short shipments, price variations and weight differences.
   
• Budgeting and Projecting – Establish a cash budget and maintain cash flow projections on a continual basis.
   
• Storage – Follow proper temperature guidelines, provided by your local health unit. Rotate your stock to ensure that oldest items are used first before the new stock. Ensure refrigerated and frozen products are quickly placed in a cold storage.

Storage temperature for dry goods (between 10-21oC) and frozen goods (-18oC or less). Rotate your stock to ensure that oldest items are used first before the new stock.

Making a profit is the most important—some might say the only—objective of a business. Profit measures success. It can be defined as: revenues - expenses = profit. So, to increase profits you must raise revenues, lower expenses or both. To make improvements you must know what's really going on financially at all times.

Associations

Although you are not required to join a bed and breakfast association, there can be advantages in becoming a member. In general, bed and breakfast associations will:

• Promote bed and breakfasts as an accommodation choice
• Promote and exchange marketing and promotional ideas among members
• Promote and encourage cooperation on vacancy referrals among members
• Establish and encourage high standards of quality and professionalism
• Represent and advocate on behalf of members

Read online:
Bed and Breakfast Associations

Canada Select

Find out about the association’s Accommodations Rating Program and its online business listing service that is searchable by region, accommodation type and rating.

Read online:
Canada Select

Federation of Ontario Bed and Breakfast Accommodation (FOBBA) 

You can learn about FOBBA’s rating system that classifies the quality of the accommodations offered by its members. You can also access FOBBA’s online listing service and sign up for the newsletter to get information on the bed and breakfast industry in Ontario.

Read online: 
Federation of Ontario Bed and Breakfast Accommodation (FOBBA)

Next Steps

For other information that relates to starting your business, you can read the following guides:

• Business Planning
• Market Research and Statistics
• Starting Your Business
• Grants and Financing
• Taxation Guide
• Employment Regulations Guide: Hiring

Additional resources that may be of interest to you include:

Statistics

• Travel and Tourism
• Current Performance Indicators for Ontario's Tourism Industry 
• Travel Activities and Motivations Survey Online (eTAMS) 
• Tourism Statistics and Reports
• Regional Tourism Profiles
• Statistics Canada - Travel and Tourism Surveys and Statistical Programs
• A Guide to Using Market Research and Marketing Measurement for Successful Tourism Destination Marketing 

Websites of Interest

• Ministry of Tourism, Culture and Sport
• Travel Industry Council of Ontario - (TICO)
• Canadian Tourism Human Resource Council
• Canadian Tourism Commission
• Northern Ontario

You can also find books, magazines and other relevant print material at business service organizations in your community. To locate a Canada Business Ontario (CBO) community partner, contact us through the Business Info Line at 1-888-745-8888.

Need more information?

Click: Canada Business
Call: The Business Info Line, a collaboration between ServiceOntario and Industry Canada, at 1-888-745-8888
Visit: Find a Community Partner Location near you

Disclaimers

Information contained in this document is of a general nature only and is not intended to constitute advice for any specific situation. Users concerned about the reliability of the information should consult directly with the source, or seek legal counsel.

Some of the organizations listed above are not subject to the federal Official Languages Act or the French Language Services Act of Ontario. Their services may not be available in both official languages.