Certain stumbling blocks or unnecessary expenses can be avoided at the start of the business.

Improve your French

While imperfection in speech can be used, initially, as a commercial ploy it is essential to understand 100 per cent of what is being said and written. Even if you never, attain absolute fluency in your written or language skills, it is important that you can understand what other people write and speak. Writing out cheques correctly is also essential. The first and second lines on cheques are for the amount in words while the following line, commencing ‘A’ is for the payee’s name: not the other way round. For numbers, written (and printed/typed) decimal points become commas, the number 7 should be written with a horizontal line through the stem and dots should be inserted between thousands. For example, a British £5,000.52 becomes £5.000,52.

The project

Don’t rush into something completely new to you just because France is a foreign country. Illogically, you may feel prepared to do things you would not even think of attempting in the UK.

If you do decide to change direction completely be prepared to invest time in a training course.

Setting up the business

Define the idea; check out its feasibility through market research; get the business plan checked over by an accountant; decide on the legal form verifying with a specialist that it suits the project and its potential; ascertain the necessity for any outside finance, grants and/or loans and obtain them; the legal form decided, find the premises and complete registration of the business, with creation of the business’ bank account and capital deposited for limited companies.

Employees

If you do decide to have employees, check that European Union (EU) citizens have a residence permit (carte de séjour) and that other nationalities have the right to live and work in France. Penalties are severe for EU employers – who must of course have their own carte de séjour – employing people who are not entitled to work in France. Note that while Els can employ salaried staff it may be more convenient to sub-contract work (make sure the outside contractor is registered).

Estimates

Don’t miss out essential costs and destroy your profit. Detailed estimates are a legal requirement and help you explain/justify prices. Clear, reasonably priced estimates will obtain orders.

Getting advice

Free specialist trade advice can be obtained from the Chambre de l’Agriculture for farmers and wine-growers, the Chambre des Métiers for artisans and the Chambre de Commerce et Industrie and also from national federations or organisations which cover these and all other categories. Being independent is, in a reasonable measure, an appropriate quality for entrepreneurs, but don’t try to unravel accounting and legal formalities without professional advice.

Drawing up most legal papers and contracts (actes) by notaries are subject to set national fees (émoluments). A notaire should therefore inform you beforehand (ask if the information is not forthcoming) of the fee for any particular acte. It is even more important to know beforehand the notaires fee for any contract or preparation of any official document which is not subject to a set rate. Notaire honoraires for their advice or consultation on matters such as family and property settlements are not subject to set fees. Ask for a costing beforehand implying that instruction for an acte will follow a reasonable honoraire. There are around 8,000 notaries in France for approximately 35,000 communities. It is usual, however, to use a property owner’s notaire when buying a property, but it is not obligatory.

Fees for consulting a solicitor (avocat) may vary from practice to practice even though they may not be negotiable. The price given should include VAT, except if it is a small solicitor’s practice classed as a micro-entreprise. You may even be asked to pay cash for a consultation – you will be provided with an invoice of course – but you don’t have to accept this request. Consult the Yellow Pages or www.pagesjaunes.fr under avocats spécialistes for business solicitors. If possible obtain a recommendation for a solicitor from someone who understands exactly what you want to do.

Get advice from an accountant on how to do the accounts, and, ideally, one who has worked in a tax office, even if the type of business means that you can do the necessary book-keeping yourself. Like using an architect to redesign a property, it will usually save you at least what it costs you.

Don’t let cheques bounce. If a cheque is not honoured within 30 days, no further cheques can be written through any bank in France for five years. The business will be seriously hampered.

Don’t postdate cheques as it’s illegal.

Getting things confirmed

Get any prices, delivery periods, etc. confirmed in writing. A little Anglo-Saxon insistence on this may be necessary. As you’re not French, this can be your excuse.

Getting experience

If you have the opportunity, get some experience of what you propose to do by working beforehand for someone, even if it’s only for a short time. This is particularly useful if your business project is a complete change to what you’ve always done previously. Check that employment contract exclusion clauses do not prevent you doing this.

Getting loans

Lay all your cards on the table when asking for loans and show proof of what other loans have been obtained or are promised. Loans are often dependent on others being obtained.

Getting an overdraft

Don’t apply to your bank for overdraft facilities (droit de décou-vert) at the last moment. Anticipate this contingency well beforehand and ask when your bank balance is healthy.

Insurance

Double-check with someone who is familiar with your business that the multi-risque policy you’re planning to take out does provide all the necessary personal, business and third-party cover.

Marketing and market research

Beware of getting on the band wagon of tendance (passing fashion) products which can die a sudden death. Be prepared to adapt the business, introduce a new, but associated activity or product, sell to a new sector in the market, or have another separate business running alongside if the original plan doesn’t find a sufficiently large market. You should test-market, if possible, before committing yourself.

Negotiating

Drive hard bargains for prices and payment terms with suppliers, but don’t be impossible and don’t renege on what has been agreed. The French are used to driving hard bargains.

Objectives

Objectives should be realistically attainable and not idealistic. On a daily basis allow time for seeking out new business, hiving off administrative and accounting work as much as possible, but not forgetting to make sure it’s done properly.

Opening hours for shops

Keep to the general opening and closing at midday hours if you are a shop in a high-street shopping area, particularly if you want to keep up with competitors who may belong to the same trade federation. High-street hairdressers are nearly always closed on Mondays. Perhaps take premises in a centre commercial if you want to remain open throughout the whole day.

However, estate agents are an exception. If you are qualified to start an agence immobilière consider advertising weekend house visiting and office opening hours. It will give you a competitive edge. A lot of estate agents don’t work over the weekends and be prepared to stick to weekend working if you start off with it. You should also remain open on weekdays.

Partners

While partnerships provide necessary complementary skills for entrepreneurs who would not be able to start and run their businesses by themselves, it is estimated that up to 15 per cent of businesses fail because partners fall out or cannot effectively work together. Having a partner will certainly help rather than hinder applications for finance from banks and other private sources. An ideal partner in France would be one with hands-on French accountancy knowledge and good administrative experience leaving the entrepreneur time to create new products and ideas, market the business and develop new and existing customers.

Not being able to agree on major decisions concerning the company’s direction or progress is one thing but actually being able to work together on a daily basis is another. Although over 800,000 businesses in France are husband and wife teams, a couple moving to France who have previously worked independently in separate jobs may find that running a bed and breakfast business together does not work out.

To protect a spouse’s interest in the event that a family business may have to be wound up it is advisable to make them a salaried employee (see Chapter 11 for details).

Don’t take on a partner purely because of the financial assistance they will bring to the company, and avoid 50/50 capital shares which may lead to no go situations.

Premises

Rental amounts for premises or pas de porte amounts linked to leases may be negotiable. Property for sale prices should always be treated as possibly negotiable.

Finding suitably situated premises may take time if location is all important, especially if you are not living in France before staring the business. You should allow enough time to search for suitable premises.

Procedures

Tick off all items as they are completed in the Procedures chapter. If you are not yet living in France, things will usually take longer than if you were in the country. Any registration paperwork must be immaculate. You should ensure that you allow for the time factor in your plans.

Purchasing equipment

Don’t be penny-wise with essential equipment and business vehicles – always pay for quality. Breakdowns are not recommended when reliability and respecting delivery deadlines are vital, especially at the start of the business. Smoothly transacted business will produce welcome cash, lead to more from the same source and recommendations to other potential customers.

Registration

Ensure that you have obtained your business registration number or certified proof that it’s on the way. Without it you won’t be able to open a business trading account and obtain a business cheque book.

Regulations

There are strict regulations governing environment protection, hygiene, pricing products and services, descriptions on packaging and the packaging material itself, what you can and cannot say in publicity messages, international trade requirements, different licences for selling alcohol (with or without accompanying food), etc. Office premises being converted to a restaurant, for example, will need to meet several new requirements. Make sure the business is en règie (conforms to requirements) and check if any new regulations are in the offing which should be taken into account. There is no point in having stock impounded or withdrawn from the market just when you are starting out. The following authorities will confirm regulations in force:

DDASS: direction départementale des affaires sanitaires et sociales (hygiene in areas frequented by the public).

SDIS: service départementale d’incendie et de secours (fire and safety).

DSV: direction départementale des services vétérinaries (food and animal hygiene).

DDCRF: direction départementale de la concurrence de la consommation et de la répression desfraudes (product descriptions, labelling and various other regulations).

Selling

Don’t retail anything below cost price unless you have obtained prefectoral permission, or unless it is during the official winter and summer ‘Soldes’ (Sales) periods.

Specialisation

This usually pays, but don’t create something too far ahead of its time or too Anglo-Saxon for French tastes, that nobody understands or will take a long time to understand before they want to buy it.

Teething problems

Inevitably there will be teething problems. Follow the business plan, without panicking, remembering that it has been thoroughly checked and created with an accountant, anticipating at the same time the possible need for modifications, to develop new strategies and obtain extra finance if there is a major increase in product demand or market changes.

Keep tabs on the cash-flow position, and don’t confuse healthy cash-flow with healthy profits. Cut costs immediately if there are cash-flow problems. If the problems are serious don’t hesitate to dismiss staff, respecting the correct procedure (see Chapter 11) before they affect the very survival of the business.

The weather

Anticipate a possible changing-weather factor if agricultural produce, plantations, orchards, etc., are entirely dependent upon a stable, predictable climate. The weather is becoming increasingly unpredictable, particularly in the South-Western parts of France with either too much rain or not enough.