Business Catering from Home Starting - DOC by eru16792

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									                                                                                      LAST UP DATED 01/02/2007

    Starting a Self Catering Business
                                  This document is a rundown of the main points to consider when
                                  setting up a self-catering business. There is much to consider and
                                  you should take advice from as many sources as possible before you
                                  take the plunge.




STARTING UP
Setting up a new tourism business for first time entrants to the industry can be a daunting prospect. Some
common queries include:
· Will I need to pay business rates? – see the Business Rates section of http://whodoiask.com
    (http://www.whodoiask.com/tax/business-rates.htm)
· What insurance will I need? - see the Insurance section of http://whodoiask.com
    (http://www.whodoiask.com/finance/insurance.htm)
· What is and is not covered in the Furniture and Furnishings (Fire) - (Safety) Regulations 1988?
· How much can I let my property for?
· How should I market my new business? see the Sales & Marketing section of http://whodoiask.com
    (http://www.whodoiask.com/sales/index.htm)
· What are the pros and cons of marketing the property yourself or using a self-catering agency?
· How can I ascertain whether there is a demand for my proposed product?

STARTING
The income from letting a self-catering property can be substantial, and it can be very satisfying. But there are
some pitfalls that you can avoid if you go about the process in a professional manner. The following will help
you to make the maximum rental income from your holiday home, with the minimum of problems.

PREPARATION
1. Deciding on your financial objectives
2. Check the legal aspects
3. Furnishing and equipping your home
4. Preparing information packs
5. Administration
6. Setting up property management arrangements
7. The process of managing your holiday rentals
8. Marketing your holiday home


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PREPARATION
There are some fundamental questions you need to ask yourself before you go ahead with letting your home:
· What are your financial objectives?
· Do you want to maximise the income from your property or just cover the costs.
· How often do you want to be there yourself?
· Do you want to be there on certain set dates, or can you be flexible and only go on weeks when there are
   no bookings.
· Do you want to be there in the peak, summer holiday times (when the rates are highest)?
· What type of person do you want to stay in your home?
· Are you happy to have children, (and is your holiday home suitable?)? Would you be happy for a group of
   men on a golf holiday to stay?
You may have to make some compromises, but you should be clear in advance where you stand on these
issues, as many other decisions flow from them.

LEGAL ASPECTS
Letting self-catering unit/s if undertaken by yourself and you do not employ staff will exempt you from a
considerable amount of legislation. However you must be aware of the following
· Responsibilities to the customer
· advertise in a legal way no exaggerated claims- see the Trade Descriptions section of
    http://whodoiask.com (http://www.whodoiask.com/regulations/trade-descriptions.htm)
· when you accept a booking you have agreed to a legal contract – see the Contracts section of
    http://whodoiask.com (http://www.whodoiask.com/regulations/guests-and-contracts.htm)
· Full insurance to cover Public Liability – see the Insurance section of http://whodoiask.com
    (http://www.whodoiask.com/finance/insurance.htm)
· Safety of all the equipment and furnishings in your unit/s. They must not only be fit for purpose but also
    maintained by an appropriate person. Keep records of when maintenance and checking equipment is
    undertaken – see the Health & Safety section of http://whodoiask.com
    (http://www.whodoiask.com/health/index.htm)

RESPONSIBILITIES TO YOURSELF
· Inland Revenue will only treat income from letting a self-catering unit/s as a business under certain
  conditions. This relates primarily to the number of days annually the unit/s are available for letting – ring
  your Inland Revenue Office before you start letting
· Check with your Local Authority their policy relating to Business Rates
· If a new development (this includes conversions) planning permission, building regulations will have to be
  obtained. Check with you Local Authority
· Insurance – check policy to cover whether you can let to visitors – if not it must be extended to do this.
· If you have a domestic mortgage for the unit – you will need to tell your building society what you are going
  to do.
· Breakdown cover for electrical appliances -Make sure that suppliers understand this is going into a letting
  unit - as many domestic policies will not cover commercial usage.

FURNISHING AND EQUIPPING YOUR HOME
If you want to professionally market your unit/s either by yourself or through a self-catering agency it will need
to be graded by the WAG/Visit Wales (WAG/VISIT WALES). The criteria they use are at present under review
but will have a huge impact on the standards of development of your self –catering unit/s. You can access the
WAG/VISIT WALES proposals at http://www.WAG/Visit Walesonline.gov.uk/ look for Self-Catering
Harmonisation


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Furnishing and decorating your self-catering unit/s must be practical bearing in mind that it will be rented out.
However the quality and thought put into the décor, furnishings and equipment will be appreciated by the
customer and will have a bearing on how much you will be able to charge.
The Furniture and Furnishings Safety Regulations set fire resistance standards for upholstered furniture in
domestic use (new and second-hand). It is now not possible to buy new or second-hand (from a commercial
outlet) which does not comply with these regulations. If in doubt contact the Trading Standards Department of
you Local Authority.
Use good quality, robust furniture and equipment that can be easily cleaned and will not be high maintenance.
Accept that things may get broken, as they do in your own home, so don't put in items that you will fret over if
they do get broken.
Kitchens
These must be fully equipped. A dishwasher is essential as no one wants to wash up on holiday. A microwave,
a washing machine and a dryer can be very useful. Cutlery, glass, china and kitchen utensils are not
expensive, so don't stint them - allow for at least double the maximum number that will stay. Make sure that
pans, coffee pots and teapots are big enough. Worktops should be easy to keep clean, and white floor tiles are
not a good idea.
Bedroom s
Beds and sofa beds must be good quality and comfortable, there should be bedside tables and lamps, at least
one hairdryer and ample hanging and storage space, with good quality clothes hangers. Spend a night in each
bedroom to check it out for yourself.
Linens
Many owners do not supply linen or towels. They may however offer a hire service and this is particularly
important for overseas visitors. Make sure you specify in any in any information about your unit/s whether you
do or do not supply linen/towels.
If you do make sure you have at least two sets of linen for every bed, to allow for same day changeovers.
Also, have a good supply of bathroom towels, tablecloths, kitchen cloths etc.
Furniture and flooring
This should be hard wearing, low maintenance, not easily damaged and easy to clean. Wooden or tiled floors
with rugs are a good idea, together with washable throws for soft furnishing bathrooms should be tiled, or have
cork floors - not carpets.
Other equipment:
You need to have a balance between having enough little personal things like books, vases, and ornaments to
make the place look like a home rather than a hotel room, but do not clutter it with miscellaneous rejects from
your main home. Try to create an atmosphere appropriate to the location of the holiday home.
Your personal item s
Allocate a storage area or cupboard where you can store your own personal items, or things with high or
sentimental value, and keep it locked when you are away. Upmarket properties may consider having a safe.
An inventory
This lists all the items of furniture and equipment in the property. This is needed so that if anything goes
missing from the property during a rental, you have proof that it was there in the first place. WAG/VISIT
WALES include an inventory as part of their Minimum Standards for Self-Catering – download a copy from
http://www.wtbonline.gov.uk/. Click onto Quality and follow the links
Guest Information
You should have a "Guest Information Folder" in the property containing lots of relevant information about the
property and the area whodoiask has a suggested contents list under Bedroom browser click. See the
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bedroom browser section of http://www.whodoaisk.com (http://www.whodoiask.com/customer-care/bedroom-
browser.htm)
Remember to review and amend the guest manual from time to time, as they do get out of date. You should
also consider having one sheet of house rules that is pinned up on a notice board in the kitchen with important
instructions like rubbish disposal, noise rules if necessary and emergency services numbers. The telephone
number of the local contact person should also be prominently displayed.

ADMINISTRATION
Good administration is essential to the smooth running of your rentals. See "Managing your rentals" below. But
you should also be prepared by setting up the following:
Cost records:
Make sure you keep a record and receipts for any costs related to your property so you can offset them
against your income tax. Our advice is to keep receipts for any costs at all - your accountant will be able to tell
you which ones you can claim.
The ACCA www.accaglobal.com (professional association of accountants) or the Institute of Chartered
Accountants www.icaew.co.uk have members throughout Wales who are use to dealing with small tourism
businesses. You can search their web sites to find the nearest accountant to you.
Insurance:
Inform your insurance company that your home will be rented out. They may increase the premiums, or you
might have to take out a special policy, but if you have to make a claim and you have not told them, they have
every right not to pay up. See the insurance section of http://www.whodoiask.com
(http://www.whodoiask.com/finance/insurance.htm)

SETTING UP PROPERTY MANAGEMENT ARRANGEMENTS
The cleaning and maintenance of the property and dealing with the guests on the spot are vital. You must
make sure you have everything arranged in advance for this key aspect of successfully letting your property.
Cleaning and supplies:
It is essential that the property is thoroughly cleaned and all linen (where provided) changed between every
rental. It is also important to make sure that essential supply such as toilet rolls, soap, and kitchen rolls are
available when guests arrive. The kitchen store cupboard should have basics like salt, pepper, sugar and flour.
And it is a nice idea to supply some fresh foods like tea, coffee, milk, fruit and bread. You can also add various
little touches like fresh flowers or a bottle of local wine - anything to make your guests feel welcome. If the
rental is for more than a week, it is a good idea to insist that the property is cleaned and the linen changed
every week, usually at your expense, at a time that is mutually convenient. Then you can keep an eye on your
property, and not have a huge cleaning job at the end of the rental.
Contacts and Maintenance:
You must leave your guests with the telephone number of some one they can contact if there is a problem or
an emergency. This person should also have a list with an electrician, a plumber and a general repair man
who is familiar with the property, and who will be able to come at short notice to make any urgent repairs that
are required during the rental.
Welcome
You can send out keys and maps, or arrange to have them picked up from a local contact, but it is so much
better if there is some one to welcome your guests, show them round, explain how things work. It can avoid all
sorts of problems and questions later. Most complaints start as questions, and if they are dealt with on the
spot, they do not turn into complaints.

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With mobile phones (advise guests in your information whether reception is available in your area) guests can
call about half an hour before arrival, so it is not necessary to have some one hanging around waiting all day.
If you, as the owner do not meet people yourself, it's a good idea to call and introduce yourself a day or so
after your guests arrive to check that everything is going well.
Goodbyes
If possible arrange for some one to be there when your guests leave, to check that no damage has been done,
to check the inventory and to read gas or electricity meters if necessary and to return the deposit.

OPTIONS FOR MANAGING YOUR HOLIDAY RENTALS
If you live nearby your rental property, you can manage all the aspects of your holiday rentals yourself. Having
read the above, you should not underestimate the amount of work involved! But if you do not have the time, or
the inclination, or you do not live nearby, then there are companies who can help with various aspects of your
holiday rental.
Self-catering agency
You can use an agency to handle everything for you (see later). All you do is receive the money for your
holiday rentals. Obviously the agency will charge for this – an agreed percentage of the rental income, but if
you don't have the time, or the inclination to do it yourself, this may be the best solution for you.
One disadvantage is that the letting agency may insist on having the property fully available for a certain
number of weeks, including the peak season, so you may not be able to use the property yourself, or pop
down on the spur of the moment, (unless it happens to be free) So make sure you agree on the availability in
advance.
Also check exactly what services the agency will provide, will they for example:


                pay to advertise the property both locally and internationally?
                guarantee a minimum level of bookings?
                vet potential guests to make sure they are suitable?
                inspect the property before and after each let and do an inventory     inspection?
                welcome the guests into your property (rather than just leave the key - somewhere)
                and explain how the various major appliances work?
                organise running repairs and maintenance and provide receipts?
                Are their staff on 24-hour call-out in case of emergencies?
What price will the agency charge clients - and what commission they plan to take? Talk to other property
owners in the area to see if they can recommend a good agency or check with the Welsh Association of Self-
Catering Operators (WASCO) http://www.walescottages.org.uk/ who have some agencies as members.
Doing it Yourself
This section is primarily for those who will be managing the whole rental process themselves, but even if you
use a letting agent, you should be aware of how holiday rentals should be managed.
           Booking calendar / availability chart
It is essential to have an efficient booking calendar, if not you could get into the nightmare of double booking!
Decide on your changeover date, and stick with it, or you will be left with a series of part-weeks that you
cannot rent. Remember that holiday rentals bookings, like hotels, are done on a nights not days basis. If
people arrive on a certain date, that night is booked, but the date they leave is not booked.
           Setting up System s
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The whole process can be managed with a set of standard letters. These documents can be stored in your
computer. This means you can send out well-organised, complete, professional documents in seconds. You
just bring up the standard document, type in the relevant dates, and add a personal greeting and maybe a little
specific note at the top.
           Responding to Enquiries
It is important to respond quickly, professionally and enthusiastically to enquiries - especially enquiries from
Internet advertising as Internet users expect quick results. As soon as you get an e-mail inquiry, send a reply
with a confirmation of the availability, answer any specific questions plus the full follow-up pack with further
information, booking and payment conditions, arrival times, etc.
It is perfectly acceptable to ask a few questions about the potential guests, such as the number of people in
the party, and whether there are children, and whether there is a special reason for the holiday. It also
important to find out how they heard about you. Record this information for marketing purposes
           Taking payments
A booking is confirmed when the deposit payment is received. Make sure you update your availability chart! If
the guests live in the same currency area as you, cheques are the simplest way to take payments. For many
small operators the acceptance of credit cards may not be a viable proposition. Check with your main bank
the terms and conditions they would offer you if you were to commence accepting credit cards. It may be worth
checking out an online payment solution through a company like: http://www.paypal.com/ or
http://www.worldpay.com/. If guest live abroad, then bank transfers are also an option - see the Foreign
Currency section of http://Whodoiask.com (http://www.whodoiask.com/finance/foreign-currency.htm).
           Follow-up
Once you have a booking use your standard letters or email if preferred for all the other processes including:
booking deposit received, request for balance, confirmation of booking, directions and arrival instructions, and
follow-ups. It is usual to send directions to the property only after the full payment has been made for the
rental.
           Keeping records
Keep detailed records of all your rentals on a spreadsheet. See Record of bookings for an example of the
information you should keep. Also have a good filing system on your computer, with a separate "folder" with all
the documents for each individual rental.
           Marketing your holiday home
Wales Association of Self-Catering Operators (WASCO) http://www.walescottages.org.uk/ are the main trade
body in Wales representing the self-catering owner. Contact them as they market units on their web site as
well as representing your interests. They also have self-catering agencies in membership who you may wish to
contact to see if they can help market your unit/s.
Also go to the Sales and Marketing section of http://www.whodoiask.com/. The sections there provide much
useful guidance and information
           Deciding how much to charge
This depends on the property, its location and how well it is furnished and equipped. To get an idea of how
much to charge and look at the properties in your area, this will give you an idea of the going rates. Or, if there
are local holiday letting agencies in the area, go and see how much they charge for a property similar to yours,
many are on the Internet.




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