Advice on Starting up a Self-catering Business

Starting a new self-catering business is an exciting venture but of course like starting any business it can be a time of worry and stress. We have compiled some information and advice based on our personal experience of owning holiday cottages, and running Which Cottage, which we hope will be of use and help to you. In this litigious age we do need to add a disclaimer to say that you mustn’t rely on any of this information to base your business on, and should check the legal or regulatory positions as they could have changed. It’s just our own view but we think it is good advice!

If you have any top tips to share with those starting to rent out a holiday cottage then please email anne@whichcottage.co.uk and we would be delighted to add them to this page.

WHAT TO PROVIDE

There are so many things to consider when starting your self-catering business that it’s hard to know where to start! It has become a very competitive market in recent years and those renting holiday cottages are becoming more discerning so it is best to equip and furnish your cottage to the highest standards. Of course there is always a market for a simple and rustic cottage in a remote area so you will need to decide where you want to pitch your holiday property and furnish it accordingly.

Adding little extra touches also helps create the right impression - such as a welcome pack (perhaps some local produce for breakfast, milk in the fridge etc), flowers, dvds, books, lots of up-to-date tourist guides, games for adults and children etc. Personal touches in the rooms also help to create a good atmosphere and make your guests feel welcomed and valued. Do provide a visitors' book so people can leave their comments and tips - you will then have lots of testimonials to use in your advertising and it can provide good information for future visitors.

An open fire (or wood-burning stove) is something that is frequently looked for in holiday cottages so it is a good idea to provide this if possible - and don’t forget to have it laid for the first night, and provide a full log basket! Put in your welcome notes where guests can buy more logs if you aren’t providing them.

Broadband is another thing that people are increasingly looking for so if possible then it would be well worth the cost to provide this - free to visitors of course!

Quality cottages are those that get repeat bookings, so making your holiday cottage into one that guests want to return to (often again and again) should be your aim.

ALLOWING PETS OR NOT?

Whether to allow pets or not can be a controversial point and again, you will have to decide yourself whether to accept them. Many people taking a self-catering holiday in the UK do so so that they can take their dog on holiday with them - by not allowing pets you will be greatly cutting down on your potential market. That said, there are others who are looking for self-catering accommodation which doesn’t allow pets as they are allergic to the hairs. To maximise your market it is best to allow pets – many people charge extra for dogs but this can alienate people (and seem greedy) and we would suggest that you don’t charge a supplement for them. It is perfectly acceptable to say they mustn’t go on the furniture, into bedrooms etc though. Providing that you supply a vacuum cleaner most people will give a quick hoover round before they go and so you shouldn’t have any additional cleaning costs after having dogs to stay. There are always exceptions though, but often a property is left cleanest after dogs have stayed as people are worried about leaving hairs and spend a lot of time hoovering before they go!

TOURIST BOARD ACCREDITATION?

Each region of the UK has their own tourist board and if you apply to be rated then they will come and inspect your property and award you anything from one to five stars. If you are aiming for a 5 star property (the criteria is exact and precise so make sure you get full details from the tourist board) then it would certainly add to your rental market and will be well worth the cost. Whether it is worth the cost to get three or four stars is debatable. There are some renters who will be reassured to see a tourist board logo but for many it is meaningless as they think it is based more on distance between the beds rather then the standard of the art on the walls - and they care more about the later! Tourist boards also run the Green Tourism Business Scheme and if you are aiming on running an eco-friendly, green holiday cottage then it is well worth considering joining this - for more information go to www.green-business.co.uk.

PRACTICALITIES

Perhaps the most important person in your business is your cleaner! Whether that is you, an individual or a company they need to be excellent. Of course if you don't live near your holiday property then finding the right person to meet the guests and deal with any problems is vital too - or you might decide just to leave a key hidden and guests can let themselves in but it is important to have a local person to help your guests if something goes wrong. Good welcome notes are important so guests know everything which will help them enjoy their holiday - from where the good shops are, to how to operate the dishwasher.

PRICING

The best way to decide where to pitch your pricing is to look at similar-sized properties in your area and use that as a guide. Of course if you have superior facilities or location then that would command a higher price. There is a lot of competition in the market so you don't want to over-price it as if it is too expensive then people will just look elsewhere, however fabulous it is.

TAKING BOOKINGS

If you are marketing your holiday cottage yourself and not using an agency, then you will be responsible for all aspects of dealing with the enquiries to collecting the money. The main thing is to deal with enquiries as soon as possible, as people searching on the internet do expect a very quick reply - and often will have enquired to several cottages - now might be the time to buy a blackberry/iphone! Make your reply personal - of course most of it will be a standard email that you store on your computer but make sure you tweak it so your are replying to any questions asked.

When you accept a booking then it is usual (and wise!) practice to take a deposit - you can decide the amount yourself but 25% would be a guideline. You then ask for the full payment say 6 weeks before the booking commences. If people cancel their booking you are of course entitled to keep their deposit if you said it was non-refundable but most owners would return the deposit if they then re-let the week. Some cottages (particularly large properties) take a good-housekeeping deposit which is returned after guests have left - you deduct money from this if there are breakages or damage to the property. Good-housekeeping deposits do put some people off as they suspect that they won't get all their money back for some trivial reason so they are less likely to book your cottage if you ask for one. Remember that once you have accepted a booking then you have agreed to a legal contract.

RULES AND REGULATIONS

The rules and regulations for renting out a self-catering cottage aren't onerous and are mainly common sense but it is obviously essential that you follow them to ensure the safety of your visitors and to remain within the law. The main ones are that furniture needs to comply with the fire regulations on fire resistance standards for upholstered furniture - all new furniture of course complies with this but if you are furnishing your property with furniture that you already have, then it is essential that you check that they comply; gas appliances and flues should be safety checked annually by a registered installer; you should carry out a fire safety assessment; and electrical appliances must be safe. All of this is in fact this good advice to follow for your own home too!

INSURANCE

This is another vital thing to sort out! You will need public liability insurance as well as building and contents insurance. There are specialist policies available for self-catering properties - some will also cover you for loss of income if disaster befalls your property. Shop around till you find the right policy - an insurance broker can be very helpful with this.

TAX

Of course you will have to pay tax on your revenue and for up-to-date information it is best to contact the Inland Revenue or an accountant. We would suggest that you see an accountant prior to setting up the business so you are fully informed and can make the right decisions based on their advice. Make sure you keep every possible receipt anyway! If there are tax changes proposed which will affect the self-catering industry then we have information on them here - view Accountant's tax update

As you will see there is a lot to consider when setting up a self-catering business but it can be a very profitable and enjoyable business if you get it right! If you want to add your self-catering property to the 'Whichcottage' portfolio please email:

anne@whichcottage.co.uk

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