We Spent Our Redundancy On a B&B: A Case Study

Many people think that semi-retirement to a B&B in a beautiful area would be their idea of heaven, but often the reality does not stack up to the dream. To a large extent it depends on the sort of people that you are and the way that you approach the B&B, as a hobby or a business.

We spoke to a couple who spend their redundancy money chasing their dream, buying a B&B in the Lake District.

Time on Their Hands

John and Margaret Dace* lived in Glasgow, Margaret a busy teacher and John working shifts as an engineer in the shipyards. Their two children had moved out of the family home, one to America with her husband and the other to do a management degree in Paris.

"We still felt young and active, said John. "We'd had the kids while we were in our early twenties and we were a bit shocked at having more money to spare and, more to the point, lots of spare time."

Finding the Right Size of Business

"As we were beginning to think about what we should be doing with that time," said Margaret, "John was offered redundancy from the shipyard. This was in the late 1980s, and John had been there for all of his working life, so there was a significant sum of money involved. We'd been in the same house since our son had been born, so we only had seven years left on the mortgage."

"We paid that off and started looking around for places where we could buy a medium-sized B&B in a busy tourist market," John continued, "we had often gone to the Lake District for holidays and long weekends with the dog, so that seemed a natural choice. It's not that far away from Glasgow, when we came here it was a two-and a half-hour drive on a good day and now that the Cumberland Gap's been finished it's more like two hours."

"This means that we can visit friends and relatives in Glasgow quite easily or they can come to see us," John said, although Margaret chipped in with "it has to be in the off season though."

Pressures of a Tourist B&B

"Yes," John agreed, "that's one of the downsides, we have to be here and available all the time, seven days a week and for most of the year. So as well as taking breaks or having people visit us here when the B&B is empty, we close immediately after the Christmas holidays though, and take four weeks off."

Margaret explained: "that's two weeks to catch up on any redecoration or other work, and two weeks on a holiday that's nowhere near any family or friends!"

Economics of the Business

They had to take out a small mortgage when they first bought the B&B, which was a going concern in the centre of Keswick. It was in a network of Edwardian streets where nearly all of the houses have been converted to guest house or B&B accommodation. They took the mortgage on a deliberately short ten year period to make them focus on making the business a success.

"In fact we paid it off in eight years, which was an enormous relief," said Margaret, "Keswick is very busy throughout all the holiday periods, including the half terms, but we still do good business outside those times. We get lot of older customers who want to enjoy it when it's quieter."

Taking Time Out from the B&B

"Although it can be irritating to have to be on call all the time," said John "our accommodation is separate from the six guest bedrooms so it's controlled to some extent.

"We deliberately went for the B&B option, rather than a hotel," said Margaret, "so that we could get the days off. People expect to be out of a B&B by 9am, or earlier with the serious walkers, and to sort themselves out for an evening meal. So generally from nine to five our time is our own. We usually get to go out for long walks with our friends and their dogs two or three times a week."

So on the whole it's worked out for you, we asked? The answer, from both John and Margaret, was a resounding "YES!"

* names have been changed