Agri-Tourism

Authors: Aaron Blacka, College of Human Resources; Pierre Couture, College of Human Resources; Charles Coale, Agricultural and Applied Economics); John Dooley, University Outreach; Andy Hankins, Virginia State University; Ann Lastovica, Virginia State University; Brian Mihalik, College of Human Resources; Charlotte Reed, Public Service Programs; and Muzzo Uysal, College of Human Resources

Publication Number 310-003, posted November 2001

Appendix E: Analysis of Start-up Costs for a Bed and Breakfast

One of the first questions is, what are the starting costs of these new activities on my farm? Because each family and each farm differ in size and production and pursue different objectives, this starting cost illustration is limited to a simple example. However, based on this example any farmer should be able to identify the agri-tourism enterprise's objective and estimate the starting costs associated with that goal in mind. The following estimate of start-up costs is based on these assumptions:

Resting on a 100-acre farm, the farmer's house is a two-story house with four upstairs bedrooms (three that are not used) and four additional living areas on the first floor. This farm is located near the Blue Ridge Parkway, on the outskirts of a small town.
The farm contains a dairy, a vineyard, and several barns for small animals. The farm's primary product is milk. Approximately 40% of the land is wooded and the remainder is pasture land. In addition, a small (less than one acre) pond also exists on the property.
This farmer wants to add a new product or service by opening a bed and breakfast in his farmhouse. The costs associated with this new venture are based on the assumption that the farmer will purchase all of his materials new at a home-improvement store like Lowe's or Home Depot.
The starting cost of additional hospitality activities will vary according to the nature and the scale of the activity itself. For example, the labor costs for certain activities like fee fishing, pick-your-own produce, or a vacation home may be less than the labor costs for a pumpkin festival or large group tours. However, renovating a house for overnight guest lodging may require a larger initial capital outlay than group farm tours would.

Start up Cost for a Bed and Breakfast

Description Explanations Cost for one bedroom ($) Total cost for three bedrooms

Bedroom renovation Paint one bedroom
Decorate by adding new flower vase, TV, alarm clock, lamps, towels, bed sheets, quilt, and other room necessities.
New mattress 75
300

400 225
900

1200

Bathroom Renovation of existing bathroom by adding a new door, painting, and changing the blinds and the wallpaper. Change the shower curtain and decorate with new bathroom accessories. 400 400

Kitchen Painting (refresh) 75 75

Kitchen accessories Add new dishes, cutlery, toaster, coffee machine (espresso/cappuccino), table cloths, and other small items. 400 400

Outside porch Paint and add flower pots and porch swings. 300 300

Main entrance Add flowers and stones to walkway. Cost will be for flowers and mulch. 300 300

Parking lot Create a new parking lot with logs and gravel. 100 100

Main gate Install a wooden billboard by the road. Cost of paint, layout, and frame. 200 200

Total $2,250 $4,100

Description	Explanations	Cost for one bedroom ($)	Total cost for three bedrooms
Bedroom renovation	Paint one bedroom Decorate by adding new flower vase, TV, alarm clock, lamps, towels, bed sheets, quilt, and other room necessities. New mattress	75 300 400	225 900 1200
Bathroom	Renovation of existing bathroom by adding a new door, painting, and changing the blinds and the wallpaper. Change the shower curtain and decorate with new bathroom accessories.	400	400
Kitchen	Painting (refresh)	75	75
Kitchen accessories	Add new dishes, cutlery, toaster, coffee machine (espresso/cappuccino), table cloths, and other small items.	400	400
Outside porch	Paint and add flower pots and porch swings.	300	300
Main entrance	Add flowers and stones to walkway. Cost will be for flowers and mulch.	300	300
Parking lot	Create a new parking lot with logs and gravel.	100	100
Main gate	Install a wooden billboard by the road. Cost of paint, layout, and frame.	200	200
Total		$2,250	$4,100

Return to Agri-Tourism