Talk me into- or out of- trying to start a business in Ireland

In My Humble Opinion
1

First off, a bit of background (skip to bolded for actual questions).

I dropped out of university in the first year and instead went travelling. I can’t exactly say I regret this, as I had a great few years, and the degree I went for would not have been much use in the employment market. Aside from a student loan (which isn’t very big as I dropped out so early on), I’ve never really been in debt; generally I’m quite careful with money.

I’ve drifted through a few different jobs without really going anywhere, mainly doing fairly physical stuff before I managed to damage my back badly enough to need surgery, and got banned from heavy lifting. It took me a long time to find any work afterwards, and what I wound up getting into (simply because the per hour wage is quite good and they’ll kind of employ anyone with a pulse) is security. This, not to put too fine a point on it, sucks. The company I’m with is slowly haemorraging contracts, so I’m getting less and less work as it goes on. From barely having much spare cash when I started, the last 2 months I’ve not even quite made the rent.

Anyway, just before I started working there, I wound up being given £15000 ($25,000) from my Grandmother’s estate when she died. This was given me as a nest egg for a house or a business, with a promise from my parents to ‘help out’ with more when I did either of those two things. I had to spend about £1000 due to an emergency house move, and have been ‘borrowing’ bits the last few months despite my best efforts not to.

Clearly, my current situation cannot continue. I’ll be chipping away that egg down to nothing unless something changes soon.

I’ve been applying for jobs like crazy for the whole year I’ve been working there. I’ve had quite a few interviews, but no offers. Maybe I just don’t interview well, I don’t know. I’m trying to go for stuff with potential for promotion, or things I would find interesting, as I know I don’t work well if I get too bored. I’m the sort of person who enjoys solving problems, and variety, and I go a bit crazy when faced with monotony or pointless busy work for long. My Dad’s been telling me since age 16 that I’d be a better fit for self-employment than being someone else’s employee.

Despite the fact that I’m clearly not in a situation to buy a house, I keep an eye on the property market; it’s a bit crazy, outside of a few exceedingly dodgy areas, you’re just not getting anything in this country for much less than £100,000 (approx $165,000). A dingy one bedroom flat in a bad area with no parking that opens straight out onto a main road would cost at least £75,000 in my city. A garage would cost about £40,000. This is maybe slightly over national norms, but barely.

Anyway, this year, I visited Ireland for an event, and in passing, happened to notice their house prices in the lovely little town it was in. €35,000 ($45,000) for a 3 bedroom house on the high street?! OK, so it’s in need of a new kitchen, and the wallpaper is falling off, but… for less than a garage? A bit of nosing round when I got back showed that this was not a one off- there are houses all over the country for about €50,000 ($65,000). With acres of land, even! I knew the economy was a bit rough there, but other things seemed about as expensive as the UK.

Since I went travelling, the idea of starting a backpackers has appealed to me- specifically, a nice boutique style one, not a party place. I stayed in loads of these in Australia and (especially) New Zealand. Interesting places, with 20-30 beds, often some way outside of town, they generally attract a slightly older and nicer crowd. One in particular I stayed at (for 3 months) had tipis and yurts instead of bedrooms, and that’s the idea I’d like to go with.

So, I have about 1/4 of the cost of a site, without further parental help (which I’m pretty sure I can get, as Grandpa loaned them a lot to set up their business, and they’ve helped my bro buy a flat). Mum inherited quite a chunk of cash from Grandpa recently, and she does bring up the topic a lot, as they’d like me to stop drifting as well. I’m 31, I should be a grown-up by now.

I’d live to live somewhere rural, and grown my own food, and keep chickens and all that hippy cliché. My family did when I was a kid and my extended family are mostly farmers, so, though I would miss the variety of a city, I’ve not got too unrealistic ideas about the countryside.

If I have an end in sight, I’ll buckle down and go for a minimum wage checkout job or anything else I can get to save as much as I can, but I admit I’d rather just get by on less than do that long term.

I think I have enough experience of being an international backpacker to be confident on that side; I know where to advertise, what I need to have, and what would probably be popular, and I’m used to working with the public.

It seems to me that this would fit most of my requirements and wishes for a job and living situation, but could it work?

Skip to here for questions!

So, aside from general ‘is this crazy’ opinions, I do have a few specific questions I’d really appreciate any Irish residents on the boards answering.

If I have 1/4 of the site cost, and went for a low cost set-up ‘fancy tent’ based backpackers, is it reasonable to expect to be able to borrow the rest, even coming from a different country?

Would I likely have trouble getting planning permission? I know Ireland is pushing its tourist industry, as that’s not doing as badly as some other sectors, and I’ve looked up what I’d need to do, but that doesn’t tell me if 10% of applications are accepted or 90%. Do you need planning permission for a tipi?

Would being English (and atheist) be a problem? I know officially it shouldn’t be, and everyone was fine when I was a visitor, but I vividly remember my family’s disasterous attempt to move to Wales as a kid, where we basically got chased out by the locals, who torched the caravan we were staying in (not while we were there) for being English and buying ‘their’ property.

Is the tourist industry as healthy as it looked to me? I guess I was there at peak time. I’m expecting it’d be dead over winter, so I’d be able to shut for several months and go do something else without losing custom, which could either help with money if needed (go get a Christmas job) or just be good (go travel) if there’s money in the kitty.

I’ve not really talked to anyone about the idea yet, it’s all very much in the vague idea stage, so any input is welcome (and might get you a discount bed! :wink: ), thanks!

2

I’m from Dublin, so my knowledge about rural areas is sketchy. I think **An Gadaí **is from a smaller town - he might be more accurate. But from what I know, and bearing in mind that there will be exceptions to all of this:

Banks are really, really tight about lending these days. As you may have heard, they over-lent a few years ago and bollixed the entire economy. We were forced to bail them out and don’t even get me started, but they’re being very cautious these days, specially when it comes to small businesses. You could have a hard time there.

Planning permission is almost impossible to predict. It depends on a variety of factors. High on the list are where you’re trying - some places are more open to the idea of new small businesses than others - who you know and, much of the time, who you bribe. You aren’t related to any of the local councillors, which isn’t good, but you’re planning a tourist site, which is welcome in a lot of places.

Nobody gives a shite whether you’re an atheist. They won’t even know unless you go around announcing it (in which case they’re less likely to condemn you for being an atheist than for showing off); no one’s going to ask you. (Unless you get serious with someone’s son/daughter, in which case the mammy and daddy will probably get nosy about your religion.)

The reaction an English immigrant would get depends on the area. In some rural areas - mainly near the border with Northern Ireland - some people could have a problem with you being English. In other areas, there are loads of English blow-ins and you wouldn’t really stand out. Near Dublin, no one would care.

The tourist industry is one of the healthiest in the country. It’s up something like 10% (can’t remember the exact figure) on last year.

I think probably the best thing you can do is put some time into figuring out where exactly you want to start this business. There’s a lot of variation within Ireland; it’s tempting to assume it’s homogeneous because it’s so small, but that’s not true. Then you can research the specific town - or, even better, go spend a bit of time there talking to the locals. Or go to boards.ie and see if anyone from around there has advice for you.

Good luck!

3

Are there hostel/backpacker trade journals? Seems to me you need to find out the state of the existing backpacker industry. Are tourist flows increasing? Decreasing? Is there a void in the market you can move into? (Chinese-speaking boutique yurts, maybe?) this might influence who you advertise to.

Do you have some interesting bit of local history you can hang a backpackers place around?

With what you said about the locals’ reaction in Wales, seems to me it would be a good idea to try to find a place you can socially integrate with. No idea how difficult that is in Ireland.

4

Thanks** Eclectic Wench**, I didn’t think the atheism thing would be much of an issue, except I got backed into a corner for 20 minutes by some dotty old lady who wanted to complain about the non-Catholic immigrants, and I wasn’t sure if that was a widespread thing or just her.

I do know a reasonable amount about how areas differ in Ireland- I have an Irish friend who talks a lot about all the areas where her family live (most of Ireland, pretty much!). If you’re wondering why I’m not asking her this, you underestimate the ‘talks a lot’ bit of that sentence. She’s lovely, but I tend to not ask her questions unless I have half a day free.

My family run a tourist attraction (not in Wales), and I’m not underestimating the importance of research and location, but I don’t want to dedicate too much time to research if there’s no chance.

Sunspace, so far as I’ve been able to find, there isn’t much organisation between Irish backpackers though there are quite a few of them, including some, but not that many, unusual ones. I haven’t been able to find anything similar to what I’d like- so either it ain’t there, or they’re awful at advertising. What I can find for accommodation statistics shows a small rise in numbers every year for the last 5 years.

5

Nah, you just got a mad aul one :-D. They’re out there, same way they are anywhere else.

The issue of being English is actually a lot more complex than I made it sound. It’s true that in many/most places no one will care that you’re English per se, but it does mean you get a lot less leeway than someone from, say, Portugal. If you come in with even the slightest vibe of entitlement/arrogance/superiority/showing the benighted paddies how it should be done/amusement at the quaint natives/anything that could come across as colonialism, you are fucked.

6

Can you really buy a house in Ireland for 65K? What are the monthly taxes like?

Can you send me a link to one of these websites please?

7

Try www.myhome.ie. Prices vary enormously by location, but I took a quick glance at Longford, for example, and one of the first few houses was 29K. A lot of the cheapest houses are going to be on half-developed horrible ghost estates.

There’s a 1% tax on purchase, but after that property taxes are annual, not monthly. The property tax just came in and is the subject of huge amounts of outrage. At the moment I think it’s 0.15%.

8

I have no answers, but some questions:

  • would you be offering both rooms and camping space?
  • breakfast or not? Once you start looking at sites, places where your guests can go get food will be a plus. Parking space, public transportation (inc. trains, long-distance buses) can also be important.
  • when preparing your calculations, remember to factor in all the costs of setting up a house. In the words of my brother, who was shocked by how much it was costing to get his home set up: “you don’t just need furniture and bedclothes and lamps, you also need pots and pans and a broom and a mop and a bucket for the mop and it’s not just any bucket for the mop and…”
  • will you need a car?
  • advertising. How? Again, costs. Speaking with people who own small hotels or BnBs, many of them have both a relatively skimpy website and listings in travel sites; if they only have one, it’s the listings. Different sites have different pricing schemes, and the same pics can be used for the listing and the website if any.
  • if you don’t set up the whole place at once, which rooms would need to be ready first?
9

Don’t rule out Madagascar so quick.

10

You have £15000, and you want to move to Ireland, buy some property and open a hostel? As Darryl Kerrigan once said, “Yer dreamin”.

Question for you, do you think there aren’t already a lot of hostels and camping sites here already? Because there are, you ain’t bringing anything new.

If I have 1/4 of the site cost, and went for a low cost set-up ‘fancy tent’ based backpackers, is it reasonable to expect to be able to borrow the rest, even coming from a different country?

  • You don’t have 1/4 of the startup costs needed, and you will find it exceedingly difficult to borrow the remainder locally.

Would I likely have trouble getting planning permission?

  • Yes, planning permission remains one of those areas where its important “who you know”.

Would being English (and atheist) be a problem?

  • Only if you make it a problem. Don’t bother ever mentioning that you are atheist, nobody gives a shit and will just wonder why you even decided to mention it.

Is the tourist industry as healthy as it looked to me? I guess I was there at peak time. I’m expecting it’d be dead over winter, so I’d be able to shut for several months and go do something else without losing custom, which could either help with money if needed (go get a Christmas job) or just be good (go travel) if there’s money in the kitty.

  • That period in the first year where you shut down for several months will probably shut your business down for good. Just sayin.
11

Thanks for the reply, even if it’s not exactly positive!

I’m aware there are already hostels and campgrounds there (I’m not sure where campgrounds come in to it, that’s quite a different market- if a possible extra, if there was space), but there are not many that are more than a basic dorm room. Internationally, there is a growing trend for backpackers that are a bit different, rather than the traditional no-frills squeeze as many as you can into a room places, and it’s international visitors that are the main target market. So… It would actually be something a bit new. I’ve stayed at somewhere around 70 backpackers in 8 countries and worked in several; this is the bit I’m actually pretty confident about.

I’m not sure what my parents would be able to lend me- I’d need a decent plan before I’d go ask them, but at the very least it’d be as much as the original amount.

I’m not sure why you’d think shutting for the dead months would close a hostel- it’s an extremely common thing for small accommodation sites to do in the UK’s tourist areas, as it can easily cost more than you take to keep a place open for one person a night (and who wants to go glorified camping in December?). Do you have some particular reason to believe Ireland would be very different in that?

Nava, it’s be just the tipis/yurts, at least to start. They have the big advantage that they’re way cheaper than an actual building, so the main costs would be a toilet/shower block and a kitchen/common room.

Obviously bring near public transport would be a big plus. A site big enough would probably not be in an actual town though, so yes, I’d need a car to offer a pick up service from public transport. As a hostel, food other than tea/coffee would not be expected, just cooking facilities. I’ve stayed in some very rural hostels, and it does tend to work out. Some places they offered trips to town, some sold some basics on site, others just let guests work it out for themselves. This is why it’s hostel pricing, not hotel- but I know myself well enough to know that, while I’d be quite capable of designing somewhere interesting and keeping it maintained, I don’t have the 5* hotel mindset.

12

May I make some comments?(Please don’t get angry with me)

You sound like you are enthusiastic o run your own business —but totally unprepared.
The only qualifications you list are “I have enough experience of being an international backpacker to be confident ; I know where to advertise, what I need to have, and what would probably be popular, and I’m used to working with the public.”

But you have zero experience starting and running a business…
Let me just explain one, very small , set of problems --and expenses–that you will run into: getting the planning permission for builiding your guest-house/hostel/tent/yurt resort.

First, you have to find a piece of property which is already designated for use as a tourist business. (you say that you are acquainted with prices in the real estate market—but you can’t just buy any plot of land…If a property is legally classified, say, for private residential use, do not expect that you will be allowed to build a business on it.

Now that you’ve found the property, you have to buy it.( Where I live, you can’t apply for a building permit without first owning the property.) So you have to pay a huge amount of money up front, a year or two before you might start earing any money.

Now you have a piece of land, but not much money left in your pocket. And your problems are just beginning…
You have to design your hostel…

You have to hire a land surveyor to measure your property and provide you a detailed map on which you can start to plan your dream.COST maybe $1000 (or 1000 Euros, or 1000 pounds- what difference does it make?–my price estimates are very,very rough!) .
Now you need an architect to draw the plans for your hostel and present them to the planning commission (or zoning board, or city council, or whatever it is called in your area). The architect will draw preliminary designs of the buildings, location of the toilets, the storage sheds,etc (or the tents, yurts, picnic shelters), the parking spaces, the access drive, etc. COST : maybe $5000 (or euros)
Now you need engineers, who will add to the archtiect’s design.
A piping engineer who will show the connections from your toilets to the city sewer COST: maybe $1000. An electrical engineer to show the connections to the city electric grid. COST: maybe $1000).
A traffic engineer to show that the access drive and parking spots don’t interfere with traffic flow on the main road. COST: maybe $1000

Now, you have a set of plans (what used to be called “blueprints”).With these plans, you can go open a file at the local municipality, and ask for your building permit. They wil take the set of plans, put them on a shelf until their engineering deparment checks them. COST for opening a file reqesting a builidng permit: Maybe $1000.(just for the filing fee. But there may be special building taxes to pay,so the COST might be $10,000)

So far, you have spent several months looking for a property, buying it, meeting with the architects and engineers…and you have probably spent ALL your money.
And the municipality hasn’t even looked at your plans!

After a couple weeks of sitting on the shelf, somebody in the city engineers dept opens your file, and asks for changes…Your buildings are too close to the property line, or your parking spaces are inadequate, or they want to see a more detailed plan of your landscaping, to verify that the rainwater will flow to the sides of the property, and not overwhelm the drains in the street.
So you go back to your friendly architect and engineer, who draw you new plans.

(oh, by the way, the printed plans unfold over 2 meters of paper, and the cost of photocopying them will add another $500 to your costs)

Now your plans are ready to be certified by the municipality. And you are in luck! The next planning commission meeting is only 3 weeks from today. So you wait anxiously, and sure, enough, they approve your plan. Except , of course, that they must also offer your neighbors and the general public a chance to review and object to the changes you will be making in the neighborhood… So your approved plans are put on file for 30 days, while you pay for a small notice in your local newspaper “to whom it may concern, regarding the issuance of a building permit on plot number xxx…”. And sure enough, one of your neighbors suddenly wakes up and objects. He files the objection, and you lose another couple months and thousands of $, waiting for the minicipal planning commission to meet on it, and them make changes as required.
So far, it’s taken you half a year or more, and tens of thousands of dollars (or euros, or pounds), and you have only a few pieces of paper. And meanwhile, you have been paying property taxes on the plot of land which you own but are not using.

Now, after the paperwork is done, you can begin making your dream come true.
You go back to the architect and get more detailed drawings of the buildings–showing the measurements of every window frame, every door,specifying the type of paint, etc, etc. COST : maybe $15,000.
And you need a structural engineer to design the concrete foundations underneath the architect’s design.COST : maybe $5000.
And now, you after you have detailed drawings, you can go take bids from construction contractors to build your dream. COST of building : Tens of thousands of dollars.

The construction process will take several months, and you don’t know if it will be finished before the summer tourist season. If not, you will lose another half year before you have any stream of income.
Also, aside from the huge expenses, you will need money for yourself to live on for at least a year–a year of hard, almost full-time work, creating your new business…
Then, you can start advertising and hoping that your unknown hostel will attract new tourists…and that those tourists will pay enough to cover the tens of thousands that you have spent so far ,and provide enough profit for you to feed yourself.

(on edit–while I was typing all this, I see from the post above that you are not planning a large building, just a few tents. So you can save a few thousand on the achtitects fees…but most of the other costs I mentioned will still be true.) Be careful, and good luck!

13

Sorry, but I have stayed in more hostels in more countries than you have. :slight_smile:

I’m also very active in meeting international tourists and organising events that require hostel stays in Ireland (Through a number of meetup groups I organise). For 99% of these trips the reason we are staying in a hostel is price. End of story.

You have also completely glossed over the location of your hostel when it fact it is the single most important decision you have to make. I get the impression you intend to find a cheap site and put a hostel there, but is that cheap site close to any good tourist or activity centres? It better be.

So thats £30000 then? You still don’t have near enough start up capital.

I’m very aware of how the off season works and Ireland is little different to other countries in that regard. My point was that it is the* first* off-season that will sink you because you are badly underestimating your startup capital and your cash reserves. Established businesses can survive closing for the winter, but you as a startup with no cash reserve will not be able to service your debts in that off season.

Its a nice idea, and if you already owned a house close to a rural tourist trap I would suggest operating it as a side business. But it simply isn’t a viable option if you have to buy property and start from scratch in a new country before you even open the doors. You haven’t enough money to survive the initial expense and the first year of low sales.

14

I’m really not unaware of the difficulties in starting a business; my parents stated a zoo from scratch in the UK. They submit a few planning applications for new enclosures a year, and I know what’s involved (less than in the US, apparently- you guys need to submit paint colour? Really?). My op was long enough without going into all the details, and really, what I want to know is would it possibly be approved in the end or just be immediately rejected as being from the wrong person.

And by the way, I have found commercial sites (eg, one that had had planning permission for a garden centre) in the $50,000 range. It’s not just houses.

Incidently, the zoo did not break even for more than 6 years, and neither of my parents took a day off for over a year. I really do know how hard it can be to start a business.

’Bucketybuck, with respect, travelling for an event and travelling for the sake of having a nice holiday are two very different things. If you’re on a tight itinerary and just passing through, of course you probably just care about cheap and convenient, but that’s not the case if you’re taking a week to explore an area. Sure, you still want cheap and handy, but interesting and fun also become priorities. I’ve stayed in backpackers miles from the nearest village that were popular enough that you had to book weeks in advance for a single bunk. Places with a climbing wall you had to use to get to the top bunk (I slept on the bottom), places that offered juggling workshops… All sorts of stuff. Different and a little more than basic is viable, in the right location.

I don’t know where the right location would be, which is why I’m sounding vague- I’ve not seen that much of the country, and it’s hard to get a good idea online of where would be good. This is initial scouting around, not a concrete plan.

15

As far as growth areas go - The west of Ireland could be one of the outdoor sports capitals of Europe, but there’s severe land access issues that have always prevented this from happening - maybe this will change in the future - I don’t really know.
Right now the surfing is world class, because the farmers haven’t yet worked out how to fence off the ocean. So there’s a network of surf bunk-houses over there for that community. Most serious surfers I know would rather kip in a cave on the beach (seriously) than shell out for anywhere upmarket, but presumably there’s a middle class contingent who might go for it.

I believe planning permission in rural Ireland was as bent as a nine bob note in the 70s / 80s, hence the plethora of cottages that be-speckle the Donegal coastline, and there’s been a lot of push-back since to straighten things out. This did not extend to the building industry that tanked the economy, mind, but I think it would to an individual looking to build a yurt camp somewhere they have no ties to whatsoever.

Overall it’s not sounding like a go-er to me, to put it mildly - you sound like you’re itching to get something going, which is great, but this isn’t it.

16

Filbert, wherever these commercial sites you’re finding for $50,000 are, I suspect they’re somewhere few, if any tourists would want to visit. It’d be worth getting data, perhaps from Fáilte Ireland, on visitor numbers by region because I suspect the lion’s share of tourists visit Dublin, Cork, Galway, north coast above Belfast and the western seaboard and, apart from if there are genealogical draws, ignore swathes of the country. I also imagine that competition is most fierce in those areas.

I don’t know anything about the specific industry (other than that tourists are often operating on really tight budgets) but having experience working in family business I will say that operating costs such as rent, rates, wages, PRSI etc. can make it difficult to make ends meet, even if you find a potentially lucrative niche. I also think Bucketybuck is correct in that you don’t have enough capital. The cost of living here, even in rural areas, can be pretty high and local economies in various parts are pretty depressed so there might not be options for you to do nixers* in downtime.

Not sure if anyone has mentioned already but also consider the Irish climate. Much of the country is inundated with rain much of the time, though it is not clear to me how much this acts to dampen visitor numbers.

Anyway, without saying not to give it a go, I’d suggest you do your homework. Find out as much as you can about the industry and region you want to operate in, find out what similar ventures there are. Even, if possible, contact people doing similar set ups in a different region and solicit their advice. These guys, for example, appear to be doing something along the lines of what you are aiming for.

*Part time, extra, informal work

17

This will evidently vary by country, but in Spain you would need one (1) architect or engineer to be your “designer”. He’d manage the subcontracting to other branches. And the land is surveyed within one milimeter of its life.

18

Put together a business plan with cash flow projections out 5 years. Think of everything and try to be conservative with your assumptions. If the plan is cash flow positive, then you might have a shot.

19

Thanks guys.

I did look at visitor numbers by area, but it’s hard to work out what exactly that means (I mean, I grew up in Cumbria in the UK- one of the areas with masses of tourists, but I know that doesn’t mean you could start a hotel in Barrow-in-Furness and expect anyone to show up. It’s a dump, albeit a dump near lots of lovely spots.

I’m not thinking of rushing into this; again, I know my parents saved for about 15 years before even looking at sites (though the Wales disaster did slow it all down), though a zoo is a much bigger undertaking.

I shall have to just have another holiday there and have a better look round- my Uncle (who has an Irish background though he never went there before about 3 years ago) came back from his second trip having bought a holiday house. I have been invited to stay, maybe I should.