10 Steps to Starting Your Small Business in France

Your business plan should clearly express what type of business it is, including your aims, objectives, goals and targets. This will be the working document that you can show to your bank, your accountant and to any possible investors, and as well as sharing with future colleagues. It will also serve as your own point of reference for your business, particularly during your annual reviews.

A good business plan should include:

• Your mission statement. This should explain your business goals and identify your business’s Unique Selling Point (USP).
• An analysis of the current market and competition, including your plan for attracting potential customers, meeting the market demand, and marketing your business.
• A presentation of your own skills and experience, showcasing your ability to implement your proposed plan.
• A detailed financial budget including start-up costs and investment capital, a monthly budget, and a forecast of projected profits.

Read our article on Making a Business Plan for Your Small Business in France.

If your business concept is original or has the potential to be copied then be sure to patent it. This should be done at the planning stage, before you start sharing your business plan with everyone.

If you want to protect your own business name or logo you must register it as a trademark. If the business will be a company, you can check online for free whether or not your company name is already in use.

The Institut National de la Propriete Industrielle (INPI) is the place to register business names, logos, and patents.

At the same time, you should also look at registering your website domain name and it’s a good idea to check availability early on. To register your French business domain name contact online the Association française pour le nommage Internet en coopération (AFNIC).

Deciding where your business will be located is a crucial first step, and wherever it is, your first port of call should be to the local Mairie (Town Hall). It is essential to establish a good relationship with the local town hall and to establish whether or not they will welcome your business to the area. If possible, try to set up a meeting with the Maire (mayor) directly.

Whether in a big city or a tiny rural village, the Mairie holds a lot of clout in France. If the Maire does not want your business in the commune, then it “probably ain’t going to happen!” so he or she is an important ally to win over.

Your next port of call should be your local Chambre de Commerce. At the Chambre de Commerce, you will pay a small fee, but they will help you and point you in the right direction regarding any qualifications that may be needed by the French authorities for you to run your enterprise. They will give you help to register your business, provide information about the type and status of your business, and tell you what licenses you may or may not need. Advisors at the Chambre de Commerce will be able to give you a good indication of how viable your business idea is.

While you’re there, be sure to sign up for your Chambre de Commerce’s mailing list, which will keep you informed about training opportunities and workshops in your area of business.

The type of business structure you choose will have a big effect on the taxes you pay, the kind of accounts you need to keep, and your legal and financial responsibilities and liabilities. A sole-trader business with a small turnover might find it beneficial to set up as a micro-entrepreneur (auto-entrepreneur), the simplest option in regards to accounting and tax/social charges. Alternatively, you might opt to register your business as a sole trader (enterprise individuelle or EI) or a company (société), such as an EURL, SARL, SA, and SAS.

The Chambre de Commerce can help advise you on the limitations and legalities of each option. An accountant can also help you decide what status might work best for your small business.

Finding a good and reputable accountant is essential if you want to keep up with your accounts. In France, where the tax and legal system is notoriously complex and multi-layered, it’s especially important to have an experienced accountant on your team and ideally one that specialises in your type of business. If your French language skills are not up to par, then one where staff are bi-lingual will be of great help.

Hiring an accountant might seem like a big expense, but it will save you money in the long run. If you are a business novice, the accountant will help you to understand such areas as TVA/VAT, Gross Profit and Net Profit, and liability. An accountant will also help you offset certain expenditure and claim money back. They will also have their pulse on any changes in the law that may affect your enterprise.

Paying taxes is a crucial part of any business and it’s important that you understand the different taxes and social charges you will be liable for before you set up your business. The fiscal year in France runs from 1 January to 31 December and there are four trimesters of revenue that need to be declared. You will be liable to pay income tax and social charges on your earnings, which will be deducted from your French business account after filing your declarations.

There may also be additional taxes to pay such as TVA (VAT) or business-specific taxes such as the Taxe de Sejour (Tourist Tax), required by all hotels, guesthouses, and gites.

While micro-entrepreneurs benefit from a simplified tax system and may feel confident making their declarations independently, most other businesses will want to seek the advice of an accountant.

You must have a dedicated business bank account for your French Business that is separate from your personal and savings accounts. This is where you will deposit the start-up capital for your business and all transactions relating to your business must go through this account. It is typical for business owners to be allocated an advisor when you open a business account and this will be your key contact at the bank, so forging a good relationship is important. If speaking French is an issue, you might want to choose a bank in France with bilingual staff or an English-speaking helpline.

Ensuring that you have the correct and appropriate insurance is critical for any business. In France, certain insurances (such as third-party liability insurance) may be mandatory depending on your business. You will want to ensure that your business and business properties are insured and you may also want to take out life insurance, indemnity insurance, and income protection policies. Your bank or mutuelle should be able to advise you on what’s available.

No one wants to think about the worst-case scenario, but in the wake of the Covid-19 pandemic, it’s more important than ever to make a contingency plan for your business. It’s much better to think about this from the outset than to be left with difficulties if and when something doesn’t go to plan.

This could be ensuring you have a financial safety net to fall back on or making smart investments with your profits to ensure an extra source of income. There is also some truth in the old maxim “don’t put all your eggs into one basket”. The flexibility to diversify or shift focus according to market trends and/or unforeseen events could be the difference between your business being a short-term success or a long-term profit-maker.

Whether you’re working as an English teacher, setting up a business, or taking a CDI (permanent job) at a French company, FrenchEntrée is here to help you settle into your new life in France. Our Essential Reading articles cover all the bases, from writing your French CV or setting up as an Auto-entrepreneur to running a gite business or navigating the French workplace.