Starting a business in France by Alan Tyrrell

If you're thinking of stating a business in France - or, indeed, in any country - think hard!

Gites, bed and breakfast, small hotels, shops, cafes and fishing lakes are many people's dream, but you need to know what's involved. There are many things to consider and things rarely go as anticipated.

Let's use gites in France as an example. What's the cost and time needed for planning permission, what's the cost and how much work is involved in turning your barn into gites? Tradesmen in Europe and especially France, rarely turn up on time and this could mean you miss your season. Agree a date and pin them down. You also need to consider the cost of materials, as these can be more expensive than the UK.

How are you going to advertise? Many people fail to consider the cost and time needed to get a business off the ground, or the impact that a slow start has on cash flow. In France many people convert barns into gites, (it is said ‘that five gites exist for every booking made') but don't think about how they are going to attract customers. As competition gets stronger, advertising needs to be sharper.

Advertising isn't a one off cost. A continuous presence is needed in appropriate outlets (i.e places where your target market will look for their holiday destinations) to attract new customers. Advertising is like a cake; you need a mix of ingredients to make it work; miss an ingredient and it will fail to rise. And, having your own website isn't the panacea everyone thinks it is. Websites need to be written properly, and managed professionally to ensure they are accessible to your target audience, which will cost significant money - money that may be more effective used somewhere more appropriate.

But, before all that, where will you live when you arrive, will you buy or rent, until your business is up and running?

You will also need to consider the language and culture of the country, as it can impact strongly and affect your plans. Many people, including multinational companies, fail to consider culture, sometimes to their detriment.

Costs involved in running a business in France can be complicated. Taxes, for example, depend on whether the profit from your business is considered commercial or non-commercial.

Commercial profits (Benefices industriels et commerciaux - BIC): If you gross an annual income below 27,000 Euros, your profit will be taxed under the Micro-BIC regime. This allows you to deduct 52% for expenses, and 48% is subject to tax.

Non commercial profits (Benefices non commerciaux): This regime covers income earned from ‘intellectual activities' - professional people – teacher, doctors etc. A Micro regime exists in this category if annual income is below 27,000 Euros. Here you deduct 37% for expenses, and 63% is taxable.

Micro regimes work on fixed profit. If expenses are greater than the apportioned level allowed, it may be beneficial to work under the ‘real' regime. This allows you to deduct actual expenses for the business. However, under this regime you have to use an accountant to prepare formal accounts for the French tax authorities. This will need to be factored into business costs.

When starting a business in France, you have to pay social charges and healthcare. Under the Micro regime these are payable as soon as you register your business. The standard charge quoted is around 3,500 Euros a year.

These figures are a rough guide to the cost of starting a business in France. You should seek professional guidance from the country of your choice as regulation and figures are changing regularly.

Alan Tyrrell is an experienced copywriter and marketing specialist and has been living in France since 2005. His services are available to small businesses and anyone else seeking help with PR, marketing and copywriting. www.adeptmarketing.co.uk