Self-employment

A very common solution to employment needs for many people who relocate to the Costa del Sol is to set up their own business, capitalising on skills learned in the UK. It is a growth area and is often encouraged by local government authorities who recognise that new businesses which may end up employing the local population are to be encouraged. If your new business plays a part in encouraging tourism and therefore the influx of more money into the area, you will find local government supportive.

Many individuals who do set up businesses do however tailor their activities to the expatriate market and even here there is no shortage of potentially successful business ideas. Many new ventures are targeted to the leisure or catering market or to property sales or management.

Do your market research

The first step is to conduct the appropriate market research to establish that there is a real need for the business you intend to open in your area. Assuming there is, you must then take the correct legal advice to make sure that your proposals are legal and that you understand all the financial implications.

If you can find an established business, which is being sold as a going concern, and the reason for the sale is genuine this could be a very wise move. You must, however, look very carefully into the reasons for the sale. You need to check that there are no local plans that could seriously affect long-term success and, most important of all, you need to check that there are no outstanding bills. In Spain the bills go with the business and will be automatically transferred to you.

You should also check that all the necessary licences for your proposed venture actually exist if the business requires a licence. These could include the original Opening Licence, the Municipal Licence and Business Licence and the licence for the serving of food if you are proposing to run a restaurant or bar. If you buy existing premises and run them exactly as they were there is less problem with the opening licence but if you change the nature of the business you need a new licence.

If you are proposing to run an operation that is dependent on your professional qualifications you also need to check that these are valid in Spain. Clear all these hurdles and you could well be on your way to a successful future as a self-employed person on the Costa del Sol. Ignore some or all of them and you could be on the way to financial ruin and the end of your dream of a new life in the sun.

So, what sort of businesses do people open on the coast and how successful can they be?

Self-employment options

Bars and restaurants

There are many people who have had a personal dream of running a bar or a restaurant in the sun and they have been featured in many reality television programmes. Some have been very successful but for every successful catering establishment there are probably many more which have ruined their owners financially or personally. The hours, especially in the height of the tourist season, can be very long. Some bars are open until very late in the night. The competition is fierce and if you are dependent mainly on tourist business, there is virtually no customer loyalty. The punters will go to the bar they like best during their holiday but they may never be back again. Next year they will visit another resort probably in another country!

On the coast the average restaurant in the summer months will be open until one or two in the morning and then be open again for lunch the next day, seven days a week. In season you cannot afford to close even for a day since the potential customer may go elsewhere and stick with the other restaurant. You will almost certainly need to employ staff to help you run the business and legally this should involve you in social security payments for your staff unless you employ them illegally.

Catering businesses, which are dependent on the tourist trade, can also suffer if business drops as a result of world events. In 2003 the Iraq War virtually destroyed the Easter trade on the Costa del Sol – no-one was travelling – although it picked up by the summer as a result of late bookings. In 2004 the Madrid bombs and the strong dollar adversely affected tourism in Spain.

There will almost certainly be increasing interference from the EU with new directives on the running of bars and restaurants. This could cost you a lot of money in the future or might even result in your premises being closed. There has been a tradition in Spain of not following all the directives to the letter whereas in the UK they are followed stringently. Sighting of a cockroach near or in a restaurant in the UK would probably result in the place being closed by the Health and Safety inspectors – just think what a client would make of a sighting of a cockroach in your restaurant!

I have experienced cockroaches walking over my feet here in some restaurants.

Guest houses, bed and breakfast and holiday lets

This is another area where many people have had dreams of opening a successful business. Once more a well-run establishment can be a good source of income but it can also be a very rapid way to take you into bankruptcy. If you have sufficient capital to allow you either to buy a well-modernised and successful business without a large mortgage it is worth considering. If the property you buy needs extensive modernisation before you can open it as a guest house you need to be more careful. The renovation work will almost certainly cost more than you bargained for and if you have to borrow the money to do it you then need to be able to recoup that investment by letting the rooms on a very regular basis.

Your income will not be terribly high. If you go on the Internet and look at B&B accommodation on the Costa del Sol you might be very surprised to see that even well-modernised premises are only generating an income of €50 to €70 per night for a double room – and that is a premium rate – others are much cheaper. In your first year you need to budget for a relatively low room-occupancy rate – 20 to 30% average occupancy could be realistic. Once your establishment is well-known you might achieve a much higher rate of occupancy. If you build up a very good reputation you might be able to charge higher room-rates because you are nearly always full but you should not bargain on this during the first few years.

There is also a relatively low demand for guesthouse accommodation on the coast itself. Most visitors to the coast are after the sun, sea and sangria and will rent an apartment or stay in a budget hotel or they will be here on a package holiday. Guesthouse demand is mainly in the inland areas for rural tourism generated by independent travellers but if your dream property is situated in an inland village or town it might be very unusual for guests to stay with you for more than two or three days before they move on to another destination. Local government is however very ready to talk to individuals who have plans for rural tourism projects.

Rural tourism

Rural tourism is an important future growth area but it is vital that you do not overstretch yourself in terms of loans to achieve your dream unless you really do your homework and your market research very carefully. Only by doing this will you be able to forecast what your long term return might be and it could be a long-term return. The rural tourism market is not the same market as the traditional market for the sunseeker on the Costa del Sol and to be really successful it will require much more marketing not just from you but also from local government.

A change in mindset is necessary. We know many people who have visited this part of Spain to explore the inland areas and they have loved it but it would be wrong for me to say that this is the first impression that the average person has of the Costa del Sol. It has been generally perceived as a beach resort area or a golfing area.

Holiday rentals

Holiday lets are another area where the dream you have may not actually become a reality. Many people buy ‘investment’ properties with a view to letting them for up to half the year. Indeed, many developers sell new properties with part of the sales pitch being the potential return on rental. Some developers even ‘guarantee’ rental income. How can they do this unless they have the clients who want to rent the property?

This was the situation a few years ago but now the large number of properties under construction could result in oversupply making it difficult to rent your property for the number of weeks you have budgeted for in your initial calculations especially if these calculations involve the paying back of a mortgage. Where we live there are plans to build 6,000 new apartments in the next two years. Assuming these might be bought by people who hope to rent them out during the holiday season this is a huge amount of property to fill with clients. This number of apartments would need over 150,000 rental weeks if the properties were to be let for 26 weeks every year. It is fair to say that if you want to make part of your business in Spain an income from rental properties it would be much more sensible to buy property where a proven track record already exists for return visitors. In other words do not buy new property.

There is also the potential problem that holiday rentals are more lucrative near the coast. When we first moved to Spain we had a rental property, rented out through a major UK company. Our weekly rate was very reasonable and we did receive a lot of business but when I compared bookings of our property (on the coast) to other properties (inland) we had far more bookings.

It is also fair to say that the rental market is also dependent on the choices facing people going on holiday. As I complete this book in 2004 the market seems to be in freefall – since the US is a much more attractive holiday destination as a result of the weak dollar. In 2003 we rented out for 26 weeks. This year, by the end of March, the same apartment had only one confirmed booking – for a week in August!

Nursing homes

There is a long-term business opportunity in Spain for entrepreneurs to set up nursing homes that will be able to accommodate the expat population when they grow older. Many older expats actually sell up and reluctantly return to the cold of the UK. If the right place existed they might be more keen to sell up and move into residential accommodation on the Costa del Sol. After all, as EU pensioners, they qualify for state healthcare so they do not need to go back to the UK to get medical treatment (they will probably have better healthcare in Spain). In fact, recent UK Government publicity suggested that if UK citizens had lived outside the UK for a number of years they might no longer qualify for NHS treatment. For anyone with a medical or nursing qualification and sufficient access to the necessary funding this could be a very good longer-term proposition.

Shops and boutiques

If you sell the right product in the right area there is no question that a small boutique-style shop can be very successful. It helps if you are the only shop offering that product in the immediate vicinity.

The flower shop

We know of one very successful English-style flower shop close to where we live which is not only successful as a retail business from the premises, but the proprietor also has a lot of business providing floral arrangements for some of the well heeled residents in the surrounding area. She is able to run the shop on her own. She has no staff to worry about and her working hours are reasonable. More importantly she has no competitors in the immediate area and any new competitor would need to be very good to take her business. Another example of the need to do your own thorough market research

An art gallery

Others might think that it could be interesting to run an art gallery. Once more a wonderful idea if you can find the right place to operate your business but if you are in the middle of a holiday area where many of the local population are the owners of second homes, which they let out during the height of the season, the market could be very limited. The owners of these properties are unlikely to be major purchasers of art and most of their visitors have not come to the Costa del Sol to buy paintings. Owners are not going to put expensive pictures on the wall only to have then damaged by people renting the property. If you can find the right area for this type of business it could be successful, particularly if you specialise in the work of local artists or if you are an artist yourself and you can sell your own work. Once more, the most important factor is location, location and location.

An English bookshop

English bookshops are another common business venture on the Costa del Sol. They rarely approach the browsing potential of the large bookshops you would expect to find on many high streets in the UK, but they do provide a lifeline for the expatriate who enjoys reading. Most carry a small stock of the latest English bestsellers alongside the tourist guides and usually a good selection of cookery books and gardening books. Where they do score is in their recycling of paperback books. Many offer a service whereby you can ‘sell’ the books you have read to the bookshop while at the same time you can buy other second-hand books you may not have read. When you have read your purchases you can then recycle them all over again. In essence they operate almost like a paid-for public library.

They are also invaluable as providers of UK-sourced greetings cards and other stationery. I would be surprised if any of the proprietors of these shops were actually getting rich but they do offer a very good service to the expat community and for anyone who loves books it is something worth thinking about.

Interior design

If you have the expertise or a proven track record there are also opportunities here for interior designers. Many properties here do cost a huge amount of money and the buyers of such properties are accustomed to calling in someone to take complete charge of the initial furnishing and decoration. The really wealthy may even ask you back on a regular basis to revamp their home. Once more if you plan to become involved in interior design it could be very useful to have a working knowledge of Spanish so that you can employ and co-ordinate the work of local artisans. If you can do this you will be able to offer a much better service to your clients.

The second-hand furniture shop

This leads me to the final shop which seems to do very well in the coastal area – the second-hand furniture shop. For many people on the coast, redecoration means a complete change of everything, not just the colour of the walls. As a result, many shops have sprung up which resell this unwanted furniture. So long as you have a good eye for quality and are able to negotiate a good price to buy the unwanted goods you should be able to resell it at a reasonable profit to others who want to furnish their new property with good quality, reasonably priced second-hand furniture. Not everyone is rich!

Business and related services

This is a growth area but once more you need to choose your location very carefully. There is no point in opening a secretarial/business service if your chosen area is already well provided for. Choose the area carefully and you could find that there will be a constant demand for fax, photocopying and possibly also Internet/e-mail related services. Not everyone has the appropriate facilities in their own home but in today’s electronic-driven world such services are necessary.

Design and printing

If you are also skilled in designing or in using the appropriate computer programmes you should also find a demand for short-run print work – advertising flyers, programmes, menus, invitations and so on. With the new generation of colour printers and colour photocopiers it is not even necessary to have access to a printing press in order to produce very professional-looking documents. Your clients will love what you have created and you will be making a living.

Computer services

Computers are, of course, one key area where there is a real need on the Costa del Sol for expert assistance. Most people now use computers but very few know what to do if problems are experienced. We all need an expert to sort it out. We need someone to help us get our e-mail running smoothly and, if needed, to provide us with new hardware or software which is English-language friendly. Yes, you can buy the hardware or the appropriate programmes in the big electrical stores in Spain but the main language of the new programmes will be Spanish, which may not be a great help to you.

If you are an IT consultant the daily rate will not be as high as that you could charge back in the UK but it could still provide a potentially good income and there is unlikely to be a shortage of work. You may even find that the work simply appears through word of mouth recommendation because your services are vital to many local inhabitants.

If you are an IT expert with additional expertise in the designing and setting up of Web sites you should also find no problem in getting work. More and more people want their own Web site for business reasons and most people at the moment need to employ someone else to set it up and get it onto the Web.

Estate agency and property management

I have never met so many estate agents in my life. So many people here seem to dabble in the buying and selling of property. The high rate of commission is what probably interests the dabblers. With a minimum 5% commission rate and the chance that it will be paid from the ‘black’ money element of the sale – and therefore paid in cash – it is a very tempting area to get into and so many do.

At the moment there is no legal bar to anyone getting involved but there is always the longer-term possibility that the Spanish regulations will be tightened up and estate agents will require to be licensed. If your long-term career is to be based on this type of work you will need to keep abreast of EU regulations. We have also heard reports that the developers pay even higher rates of commission to those agents who sell the new properties. There is money to be made in real estate on the Costa del Sol at the moment until the rules are tightened up. This is, after all, the equivalent of California in the thirties!!

Another area that is very much in demand due to the large number of second homes on the coast and the large number of holiday lettings is property management. Absentee owners are very keen to appoint key holders who will check their properties on a regular basis for security reasons, organise cleaning and changes of laundry and be on hand to welcome visitors and provide a key collection service.

The basic service is not difficult to organise and, at first sight, appears to be a very easy way to earn an income. After all, charges for the basic service can range from £300 to £500 per year per property. Look after the keys for 20 properties and you could potentially be looking at £10,000 income, which is almost enough to live on here. But it is not easy money. If these 20 properties are all being let successfully you could potentially have 20 turnarounds to organise on a summer Saturday between ‘10.00 and 16.00 hr.’ If the cleaners go sick (which happens) or there are other problems it could be a nightmare. In addition, if there are flight delays the new arrivals may not arrive until after midnight and having paid good money for the rental of the property, they expect to be welcomed and given access. They may also lock themselves out and ring you at two in the morning trying to get back into their apartment. Believe me, we tried this as a potential business opportunity and gave it up. There was just too much aggro.

Cleaning services

Allied to property management there are business opportunities here for individuals who would like to set up a property cleaning business. We know many people locally who are desperate to find good, reliable, honest cleaners to look after their properties in their absence or to prepare them for their arrival.

To run this type of business successfully it could be an advantage to speak Spanish since the most reliable cleaners would be the locals. That is not to say that expats do not make good cleaners but many choose to go back to visit friends in the UK during the height of the summer when it is hot and that is just the time when you, running your new business here, will have the greatest demand for the services of your company. Such a business would not be as lucrative as overall property management since you would only be taking a commission on the hourly earnings of your team of cleaners.

Run in conjunction with a property management business it could be a good way to earn a living but it is not an easy way to be very successful on the Costa del Sol in terms of the financial return.

Painting and decorating

As mentioned earlier there are also many opportunities for the various building trades to find work on the Costa del Sol. We know people who started off with one commission for painting and decorating who accepted it simply because they were bored and wanted something to occupy their minds. The first commission led to more work and before they knew it they were fully employed and actually turning work away.

Hairdressing

Increasingly, new English-run hairdressing salons are opening up on the Costa del Sol and it is an absolutely ideal business to get into. When people go to the hairdresser they like to be able to chat. If they go to a Spanish salon this might be very difficult whereas an English-run salon is perfect – the language for communication is English. There is also the fact that you will have a very large – almost captive – market. There are many women here who are retired, with time on their hands – what better thing to do than to have their hair done once a week, especially since it costs a lot less than it would in most parts of the UK.

The individual salons are becoming more and more sophisticated, offering not just hairdressing but the entire range of beauty treatments which any city centre salon would offer in the UK, albeit at lower prices. The products used are the same as the customer would have been accustomed to since the beauty market is multinational. The brand names are familiar!

It is also interesting that many of these businesses do not follow the established Spanish pattern of closing during the siesta period. This is not an attempt to change the Spanish way of life.

It is a prime example of good, hard-headed business sense since there are potential customers who actually have that siesta time for themselves and it is an excellent opportunity to have their hair done rather than to have a leisurely lunch.

Once more, if you have the right training and background a hairdressing salon could be a very good business opportunity on the Costa del Sol. It might even be an opportunity to have a good business for yourself without actually employing others as staff. If the salon is big enough you could ‘rent’ a chair to other hairdressers who would officially be self-employed just as you are and who would be responsible for their own tax affairs and social security issues. After all, each person will build up their own group of loyal clients. This is quite common practice in salons in the UK and I am certain that it is moving here.

Language services

If you can get by in Spanish or if you are fluent in the language there are opportunities to teach English as a foreign language. There is a huge demand for English lessons but unless you can communicate easily with the student you could have problems.

If you speak fluent Spanish the world of interpreting and translation is open to you. In fact with the growing number of international conferences which are now held on the Costa del Sol an ability to translate between English and any other European language could be a door-opener to well-paid work. Equally you could offer your services as a translator to the local authorities. Much of their literature is now published in Spanish and in English and they need someone to translate the original into conversational and ‘proper’ English.

Journalism

If you have a journalistic background, then local English newspapers and magazines could be a source of work. You may not be offered a staff position but they are always looking for articles on a freelance basis and if you contribute often enough, who knows, a full time position might arise.

Gardening

Gardening, both routine and landscape, is much in demand either for private residential work or for the many new developments that are being built. It would be foolish for me to say that you will walk into a major contract to landscape a new development of apartments but if you have the qualifications and a track record and you are good at networking there are possibilities in this area. If you have an impressive portfolio of work done in the UK or qualifications in garden design from some of the internationally recognised UK centres of excellence such as Kew or the Royal Horticultural Society this could open doors for you. The only potential short-term problem could be to learn which plants grow well here and tailor your ideas and designs to this.

There is also a demand for gardeners to look after established gardens. The work is not particularly highly paid since there are many local inhabitants who are already doing this but often they are not really gardeners – they are jobbing handymen – and if someone has invested a lot of time and money on a spectacular garden they might be prepared to pay a little bit more for a gardener who really knows how to look after it and who will make it look even better as the months and years progress. If you have such skills, there is a market for them here.

Satellite television engineers

Many expats have made a good living from satellite television installation. It is not a difficult business to organise but one word of caution needs to be made. Developments built before satellite television was available have been a prime source of business because they do not have a communal receiver. Many of these apartments now have a satellite dish so that potential business has already gone.

Many new developments now have communal satellite receivers and the community bans the installation of private satellite dishes so it is possible that there will be less demand for new installations in the future. There will still be a demand from owners of new villas but the number of villas built compared to the number of apartments is much lower. This may not be a major growth area in the future.

Kennels and catteries

With experience in this area there is a major business opportunity on the Costa del Sol. All you need to do is to find the right premises where you can accommodate the animals and open for business. But one word of caution – just because you have bought a property in the country with land does not give you the right to open the business. Planning permission might restrict the use of the land to agriculture only. Check the restrictions on the land before you buy.

There is not a major tradition among the local population to keep dogs and cats purely as companions but there is a strong tradition in those who come here to live to bring their pets with them. They then have a problem if they want to go back to the UK to visit friends and family – where does the dog or cat go? With the new pet passport scheme they can take their animals back to the UK but this can prove to be very expensive. To fly them back costs a lot. To drive back is equally difficult. It is a two- to three-day drive and on the way the traveller will need to find overnight accommodation which welcomes animals. Many people who live here would welcome good kennel or cattery accommodation for their animals.

This potential business area is not yet totally developed but I believe it has great potential for the future.

Working from home

This is a major business opportunity for anyone from the UK who wants to relocate their family and live on the Costa del Sol. With improvements in communication through mobile phones and e-mail the right business can be run from a distance without the client even knowing that you are living in the sun of the Costa del Sol. ISDN telephone lines are now available in Spain so you can be online 24 hours a day. Mobile phone services are now the equal of anywhere in Europe.

The only negative could be the potential need to visit clients in other parts of the world. If your clients are based in the UK, there would be no problem. There are very good airline connections between Malaga and most major cities in the UK using the major carriers or the so-called low-cost carriers, but should you need to visit clients in other countries, even in Europe, you could have real problems. Most international travel from Malaga would need to be routed through Madrid or Barcelona and this increases the travelling time – time is money. Fares could be very high – in other words, typical European full-price, short-haul fares. When I first lived here I continued to do consultancy work in the industry that I had left. I had a client in Vienna, and a trip from Malaga to Vienna would then have cost me between £1,500 and £2,500 depending on the carrier. This charge would have been included in the bill so, needless to say, my client did not want me to visit Vienna for a meeting.

Having made these criticisms there are many businesses that can be run from a distance, particularly consultancies. If you have expertise that falls into this category you have a real opportunity to live well in the sun.