Starting a business in France

It’s a sad fact that many start-ups fail – David Hammond explains how he became one of the success stories...

Good Friday 2003. My wife, Lynne, and I arrived in Burgundy to begin the next phase of our life. We knew that we had to build a business to earn a living and we planned to run small tours to the independent, family winemakers of Burgundy.If anyone had told us then that by mid-2009 our business, Burgundy Discovery, would receive maximum scores on Trip Advisor, we would be highly respected by Burgundy winemakers and we would be fully booked on many days for weeks in advance, we would have thought that they had consumed a glass too many of Burgundy’s finest! We are profitable, earning an acceptable living while running a highly enjoyable business.Throughout France there are hundreds of highly successful businesses run by those who have decided to emigrate to this wonderful land – sadly, there are also many who have failed along the way.There is no magic formula for business success in France – or anywhere for that matter – but there are a few golden rules that will increase the chances of enjoying life here to the full.1) Do your researchWhen we arrived, we had already done a lot of research into our idea, making regular visits over the preceding year and sounding out people in the Burgundy wine industry as to its viability. So, golden rule number one is to research the viability of your idea – not just on the internet but on the ground too. While the web is essential to everyday business, it simply cannot replace first-hand research. You need to get to know the area, competition, likely working relationships and scope of the potential market.2) Learn FrenchThis, of course, assumes you actually know how to talk to people. Strangely, new arrivals seem surprised that most French people have limited English and actually prefer to converse in their native tongue. Golden rule two is, therefore, to speak French well enough to have a relevant business conversation. If not, the chances of success will be reduced. Gain a good grasp of the language well before you arrive. Watch French films and read Frenchlanguage newspapers. These all help to build your language skills on top of essential French tuition.3) Know your productBy Easter 2003, we had defined our product and briefed a design agency to create our business identity, website and brochure. We had tested the format of a typical day on our wine tours and knew the visual identity and language we wanted to use in our marketing material. Most importantly of all, we had defined our business plan. In simple terms, this is what you are going to do. Unless you can articulate this easily, what hope has a potential customer? Which brings us to golden rule three – be clear about your product. This doesn’t mean being obstinate; your product or service will change and evolve over time but you must be clear about what you do from day one.4) Know your strengthsWe were now permanent residents in France and our business was, from a marketing standpoint, nearly ready to launch. We were ready to leap into the so-called minefield of French bureaucracy. Our first port of call was to our local mairie to present our business idea, in French, and seek the mayor’s input and feedback. This is always a good move as it introduces you to the local community and shows that you, as a newcomer, are willing to accept advice from the locals.This discussion led us to make one of our best decisions: to employ an accountant to advise on the best business structure and register our business with the appropriate organisations. Although it cost about €1,000, it enabled us to get on with launching our business rather than chasing after documentation; golden rule four is to know your strengths and use valuable time wisely to get your business ready for launch.5) Do your sumsJust over three months after arriving in Burgundy, our business was officially launched. We had a French-registered business, visiting French winemakers with guests. That year was slow in business terms. We were nowhere on the search engine listings, our brochure was not in many hotels and we had no track record or reputation. So 2003 was much as expected. We knew it would take at least a year and possibly two before we would turn a profit. It is imperative to have sufficient funds to see you through the start-up period and, in a seasonal business like ours, that meant nearly two years. Golden rule five is be prudent. Prepare financially for a significant period before you make money.6) Be ready to adaptAround late 2004, strange things started to happen. Enquiries for our tours increased significantly, especially from the USA. We found that, at last, we were getting onto the first page of the search engines, and our work in developing the key words embedded in our website was paying off. Golden rule six is prepared to be surprised and act on it. When we set up the business, we assumed most guests would be English and we structured our marketing accordingly. Wrong! Today, 65% of our guests are from the USA, we are featured frequently in USA wine articles and receive a large number of referrals from American guests.7) Price it rightAs 2004 concluded and 2005 began, we realised we were working very hard but not getting the return we had hoped for. We thought about the price of our tour, compared to the cost for an American visitor to travel to, and stay in, Burgundy. We were selling ourselves short and we decided to increase our prices significantly. The result? Business boomed and guests started to give feedback that they thought our tours excellent value for money. At the same time, we segmented our tours adding a more expensive option. Golden rule seven is to never under-value your offer. You can use price as a marketing tool, which should increase your profitability without a corresponding increase in workload, in our case, per tour.8) Never compromise on qualitySo here we are in 2009, in the middle of the world’s worst recession for decades. We are delighted that our profits are, at the time of writing, up on 2008 – itself a record year. Why? Quality is paramount in what we do. We believe we are only as good as our last wine tour. And thus, golden rule eight is never, ever compromise on quality.Every day is different in the vineyards – the blue sky yet freezing frosts of winter, the budding vines of spring, the bulging grapes of summer and the glorious colours of autumn. And we never know what our guests will be like. Invariably they are wonderful, interesting people who are seeking to learn and have fun on our tours. And so, last but not least, our ninth golden rule has to be to enjoy the moment, it’s why we’re here after all.What next? We’ve been running our business now for nearly seven seasons and it is time to take stock, as all businesses must do. We are looking at the options to franchise or maybe sell Burgundy Discovery. Perhaps Burgundy Discovery could be part of your future life in France?David and Lynne Hammond - www.burgundydiscovery.com