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How to Start a Bed and Breakfast in Ontario

TABLE OF CONTENTS

  1. Introduction
  2. Basics to Getting Started
  3. Regulations
  4. Taxation
  5. Financing
  6. Managing Your Operation
  7. Associations
  8. Next Steps

1. 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.

2. Basics to Getting Started

Before starting a business in Ontario, there are several issues to consider, such as regulations, financing, and taxation. Read our start-up guide to learn the basics.

Read online:
Business Start-Up Guide

3. 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 Bed and Breakfast.

Use online:
BizPaL

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 (e.g., 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

Each municipal government has the authority to issue its own business licenses within its jurisdiction. Since there is no uniformity throughout the country regarding municipal licenses for businesses, you should consult with the appropriate local officials to determine whether your business will be affected by local regulations and licensing requirements. Businesses (including home-based businesses) must also meet the zoning by-laws that control property uses in their municipalities.

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

Food Safety/Labelling

  • Your local health unit is the main contact for information on food safety. Local health authorities are responsible for carrying out restaurant and 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 Legislation

Building and Fire Codes

  • Ontario Building Code and Municipal Building Department
    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 License

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.

  • Society of Composers, Authors and Music Publishers of Canada (SOCAN) Music Licence
    SOCAN is a not-for-profit organization that represents the performance rights of music creators and music publishers. They can help you learn about your obligations and obtaining the required license(s).

    Contact SOCAN:
    1-800-557-6226
    Society of Composers, Authors and Music Publishers of Canada 
     
  • Re: Sound Music Licensing Company
    Re:Sound is the Canadian not-for-profit organization that represents the performance rights of artists and record companies, and provides the legally required license(s) for businesses. You can get help determining what licence(s) will be required, what the licensing process will be and how much it will cost.

    Contact Re:Sound:
    1-877-309-5770
    Re:Sound

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

4. 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 charge and remit the Harmonized Sales Tax (HST). You can speak with the Canada Revenue Agency (CRA) for more information.

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

5. Financing

There are many different ways to finance your business. Canada Business can help you find government financing available for starting a business.

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

Search online:
Find Government Grants, Loans and Financing

Tourism Development Fund

If you are a tourism professional, you may be eligible for financial support for innovation, training, and improving the investment readiness of your business.

Contact the Investment and Development Office: 
416-325-5306 
Tourism Development Fund  

6. 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. You can contact an insurance agent to discuss your options or to develop a plan that is right for you and 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.

Basic insurance:

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

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.

  • ontariotravel.net
    You can register your tourism business with the Ontario Tourism Marketing Partnership Corporation (OTMPC) for listing on ontariotravel.net, the Government of Ontario's official visitors' information site for travel. Your listing is available to consumers visiting the website and through the OTMPC toll free tourist information line. Basic registration is free but enhanced options are subject to a fee.

    Use online:
    OTMPC - New User Registration 
     
  • Regional Tourism Organizations (RTOs)
    If you are starting a bed and breakfast, you may be able to get help developing a competitive and sustainable tourism venture. You can contact your local RTO to discuss your business ideas and coordinate your own projects with other tourist ventures in your region.

    Note: RTOs are independent, industry-led, not-for-profit organizations.

    Read online:
    Regional Tourism Organization 
     
  • Signage 
    If you are an eligible tourism business and sign space exists, you can apply for a Tourism-Oriented Directional Sign (TODS). TODS is a sign placed on Ontario's provincial highways displaying your business name, a generic symbol (or in some cases your corporate logo) and directional information. The signs are used to provide direction to tourists and are not a substitute for advertising.

    The Logo Sign System also pertains to signage for motorist services near highways. These signs have symbols for overnight accommodation, service stations and restaurants.

    The TODS program and the Logo Sign System program are administered by Canadian TODS Limited, a private company, under the supervision of the Ministry Ministries of Tourism and Culture and the Ministry of Transportation of Ontario - MTO.

    Contact Canadian TODS Limited:
    905-851-1322 (Woodbridge) or 1-888-263-9333 
    Tourism-Oriented Directional Signs (TODS) 

    Note: Some regions and municipalities run similar and complimentary signage programs. You may wish to inquire with your city hall about any of these programs.

    Read online: 
    Association of Municipalities of Ontario 
     
  • Resource-based Tourism 
    Resource-based tourism focuses on services that offer activities like fishing, camping, canoeing, hiking, exploring wildlife and plants, visiting parks, conservation areas, and historical and heritage sites, usually on a year-round basis. If you are interested in understanding the issues around sustainable management of your local natural resources and the heritage conservation process, you may be interested in linking your bed and breakfast to this growing segment of the tourism sector.

    Read online: 
    Resource-Based Tourism
    Ministry of Natural Resources - Guidelines and Best Practices for Resource-Based Tourism 
    Ministry of Tourism, Culture and Sport - Ontario Heritage Tool Kit

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 or they can round out your management team 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 accommodations in the industry?
  • What is the total cost of running your bed and breakfast?
  • What is the minimum acceptable profit you need to generate from your business?
  • Is there a case to be made for offering seasonally varied prices in order to attract customers all year round?

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

Read online:
Pricing

Choosing Your 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.

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.

7. 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)

8. Next Steps

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

Additional resources which may help bed and breakfast owners include, but are not limited to:

Statistics

Websites of Interest

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.

Date Modified: 2012-05-16

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