B&B Break Even Analysis Calculator – FREE ONLINE TOOL

As a B&B owner, knowing your break-even point has a big impact on running your business well.

This guide shows you how to use our B&B Break-Even Analysis Calculator to figure out how many room nights you need to book to pay for your costs.

How It Works

Step 1: Work Out Your Monthly Fixed Costs

In the “Monthly Fixed Costs (£)” box put in the total of your fixed costs for a normal month. These are costs that stay the same no matter how many rooms you fill. Include:

• Money you pay for your house or rent
• What you shell out for insurance
• Bills for power, water, and stuff (guess if they change a lot)
• What you pay your regular workers
• Internet and TV costs
• Taxes on your property (split by 12 to get monthly amount)
• Paying back money you borrowed
• Cash spent on ads (if you do it every month)

Let’s say all this stuff costs you £3,000 each month. Just put 3000 in that box.

Step 2: Figure Out How Much You Charge for a Room Each Night

In the “Average Room Rate per Night (£)” spot, put how much you charge for a room each night. This should be the full price guests pay, with VAT if that’s a thing. Think about:

• If you’ve got different kinds of rooms, work out an average based on how many of each type you have.
• Take into account any changes during the year by figuring out a yearly average if there are big differences from season to season.

For example, if your normal nightly price is £85, put 85 in this box.

Step 3: Figure Out Your Changing Cost per Room Each Night

In the “Changing Cost per Room Each Night (£)” box put in the money you spend for every room that’s used each night. This should cover:

Here’s what you need to include:

• Stuff to clean and people to do it
• Food for breakfast and how much it costs to make
• Bathroom stuff for guests
• Washing sheets and towels
• Any free things you give to guests
• Extra costs for each room (like water and power)

For instance, if it runs you £20 to get a room ready and make breakfast, put 20 in that box.

Step 4: Pick Your VAT Rate

From the “VAT Rate” menu, choose the right VAT rate for your B&B:

• 20% (Standard): If you’re signed up for VAT and charge the usual rate
• 5% (Reduced): Not for B&Bs, but it’s here to cover all bases
• 0% (Zero): If you’re not signed up for VAT or you’re under the VAT limit

Most little B&Bs will pick 0% unless they’ve chosen to sign up for VAT on purpose.

Step 5: Work Out and Make Sense of Results

Hit the “Work Out Break-Even Point” button. The tool will crunch your numbers and show you what’s what.

Getting Your Head Around the Results

The tool will tell you:

1. Monthly Break-Even Point in Room Nights: This shows how many room nights you gotta sell each month to cover all your costs.
2. Total Revenue Needed (inc. VAT): This is the cash you need to bring in, with VAT included, to break even.
3. Total Revenue Needed (ex. VAT): This is the money you need to make, without VAT, to break even.
4. Equivalent Rooms per Night: This tells you how many rooms you need to fill each night, on average, to hit your break-even point.

Example

Let’s imagine you’re running a small B&B with these numbers:

• Monthly fixed costs: £3,000
• Average room rate: £85 a night
• Variable cost per room: £20 a night
• Not VAT registered

You’d put in:

• Monthly Fixed Costs: 3000
• Average Room Rate per Night: 85
• Variable Cost per Room per Night: 20
• VAT Rate: 0% (Zero)

The calculator might say you need to sell about 46 room nights each month to break even, which is about £3,923 in money coming in. This means you’d have to fill about 1.5 rooms every night, if you’re looking at a 30-day month.

How to Use This Info

• With 3 rooms, you need to keep at least 51% of them full to cover your costs (1.54 divided by 3 equals 51%).
• Try out different prices for your rooms to see how it changes your break-even point.
• This helps you set the lowest number of rooms you need to fill or decide if you should change your prices.
• Do the math for different times of the year if your expenses or room rates change a lot throughout the year.

Keep in mind just covering your costs is the bare minimum. Try to do better than that to make money and save up some cash for your B&B.

When you use this calculator often and figure out your break-even point, you can make smart choices about prices, marketing, and keeping costs down. This helps make sure your B&B stays healthy.