Business Plan

[Carole K]

We are considering giving up two well paid, steady jobs and selling up and moving to France to run a chambres d'hotes. Risky business many people keep telling me but the dream remains!

I'm trying to write a business plan and I'm trying to estimate how much general living expenses cost....all the usual social security, mutuelle, electricity, car etc etc 

We would probably be looking at a six bedroomed house possibly with a gite or two.

I've read a number of books and whilst there is general information nothing is very specific. Can anybody help?I realise that many will want to keep this info private but any sort of help would be greatly appreciated.

I've also read that we should count on 10% occupancy in the first year and then on 30% for a reasonable business and up to 50% for a good business. Does this sound reasonable?

Hoping that somebody can help.

 

Carole

[Mpprh]

Hi

Probably best to find a management consultant with experience in your field / area to prepare the business plan.

But you need to split your bookings into seasons : low / medium / high and then estimate occupancy. And here (Languedoc) the season is surprisingly short. Outside school holidays it depends on marketing other activities than family holidays.

Of course, Spa towns and Ski resorts can benefit from much higher occupancy year round.

Others find it more difficult.

 

Peter

 

[Quillan]

The estimated income from a CDH and Gites would normally be calculated by a French accountant as being the weekly rate of all property/rooms X 10. In other words they assume you will be fully occupied for a period of 10 weeks per year, that does not mean consequative. I heard from a client the other day who stayed with us that they have been told 8 weeks now because supply of beds has out stripped demand. Personally I have found the original figure (10) to be more near the mark and we have gone over this in the second and third year.

If you both work at present, earn good money and plan to pack it all in and do this your life style is going to change a lot. You will become poor, in fact without a second job very poor. I found it very hard going from a £140k a year job with a new car or two every year to a €20k job and a car thats three years old. Mind you I supliment my income by selling her and my bodies but being a couple of wrinklies we don't get many takers .

Anyway good luck.

P.S. I don't think they konw what a business plan is in France.

[mascamps.com]

How well you do in the first year depends on whether or not you take over an existing business. If it's from a standing start, 10% wouldn't be too far off for the first year.

In theory, you should be able to get to 60% in due course as that's typical for hotels (there aren't any comparable figures for CdH businesses). However, that would take 3 to 5 years at minimum.

As a very broad brush figure, 500€ for each of gas, electricity and water wouldn't be too far away from reality. Social security charges depend on whether you're married, number of kids and overall income so it's difficult to put a figure on that. The social security people send you a bill for 3000€ when you start up which is based on estimate of what you're "supposed" to earn so I guess that's not a bad figure to run with. Add another 500€ for health insurance and perhaps 1000€ for pension contributions.

In France they normally have "financial projections" in which you just make up the figures because they don't ask for any business plan explaining where the figures came from. If I'd known this, I would have doubled the income on our financial projections and thereby reassured the bank no end

Personally, I would prepare the business plan myself as it's something that you need to understand. Get a consultant to prepare the "official" plan for the bank perhaps but have your own "real" plan too. We look at ours now and again to ensure that we're broadly on track and doing the stuff that we said we'd do as it's quite easy to forget to do something that you reckoned would be essential.

 

Arnold