HAVING YOUR OWN BUSINESS

Spain is traditionally a country of small companies and sole traders. There are nearly two million families running businesses employing about 75 per cent of the working population. The majority of businesses established by foreigners in Spain are linked to leisure and catering industries or to property sales. Why? The answer is twofold: low entry capital cost and providing a service in one’s mother tongue. People choose to be self-employed for the lifestyle and freedom it affords but small businesses in Spain often exist on a shoestring with their owners working extremely long hours, particularly those running bars or restaurants. Many foreigners start businesses in Spain with little research, little business acumen, no knowledge, no capital and no linguistic ability. It is asking for trouble.

The first step is to conduct appropriate market research to establish that there is a real need for a business in the area and secondly to check that all necessary licences for the proposed venture actually exist or can be obtained. These could include the Opening Licence and if appropriate a licence for serving food. The purchase of an existing business, to be run exactly as before, will not require a new opening licence, but if the nature of the business is changed a new one is required.

Obtaining legal advice

Before establishing a business it is important to talk to a number of people to obtain legal advice and to take advantage of any tax benefits or grants. This advice is usually obtained from a lawyer (abogado) or an accountant (asesor fiscal) but there are other sources too.

An excellent source of information is the commercial section of the British Embassy in Spain, known as UK Trade and Investment. They will be happy to help individual business people. This help will usually consist of providing information and contacts and generally directing people towards relevant associations, trade fairs and publications: www.uktradeinvest.gov.uk

A network of Chambers of Commerce in Spain offers a variety of information-based services to the potential entrepreneur. They will be able to give advice on all aspects of business creation, from the types of legal entity that can be formed to the different incentives available locally for business creation. The Chambers will also help to research a market prior to making a business plan. Usually these services are completely free. Some Chambers include a Ventanilla Unica Empresarial, a system of guiding a prospective business person through the processes involved in incorporating and registering a business.

Launched by the Ministry of Public Administrations (www.map.es), the network of Ventanillas Unicas Empresariales (One-Stop Shops for Businesses) has created an integrated system providing future entrepreneurs with information and advice on the formalities required to start up a business. What makes this service so innovative is that all the facilities for setting up a business are provided in a single location, albeit in the Spanish language. Visitors to a Ventanilla Unica go through three separate phases.

• Information and guidance. Entrepreneurs are pointed in the right direction, based on their requirements and provided with basic information on starting a business.

• Advice. A personal advisor then studies a business plan and, following a personal interview, gives an assessment of the project and a range of alternatives. Advisors provide entrepreneurs with information regarding the suitable legal form for their business, labour obligations, private financing and government aid.
• Formalities. Suitable projects are then forwarded to the procedure management centre. Here the officer-in-charge, in close co-operation with representatives of the tax and social security authorities and the regional and local authorities, will co-ordinate all of the procedures needed to set up the business such as obtaining municipal licences, dealing with fiscal obligations, labour and social security obligations.

POPULAR BUSINESSES

Bars, cafes and restaurants

Many people dream of running a bar or a restaurant in the sun. Some have been successful, but for every successful catering establishment there are many more that have ruined their owners. Competition is fierce. The hours, especially in the height of the tourist season, are very long. A normal bar or restaurant in the summer months will be open until the small hours of the morning and then be open again for lunch the next day, seven days a week. In peak season it cannot close for even a day since customers go elsewhere. A catering business also suffers from world events, disasters, climate and the economy.

Computer sales and service

While most people use computers few know what to do when problems arise. We need an English speaking expert to sort it out, someone to help us stop our computer crashing, get our email running smoothly again and somewhere to buy our bits and pieces including user-friendly English language software. Anyone skilled in graphic design can also find a niche for web design and short-run print work – advertising, posters, banners, flyers, programmes, menus, invitations, etc.

Construction work

Painting and decorating, plumbing, building, carpentry and similar skills are in demand from ex-pats who want to use the services of tradesmen to whom they can describe the required task without any language problems. Many offer their services as part of the ‘black economy’ and are paid in cash. However, moving into large contracts will mean dealing with a different customer base – people who want IVA receipts to reduce their liability for income tax.

Estate agents

Opening an estate agency business is easy. Unlike many other European countries the estate agency market in Spain is not governed by regulations. There are many people working in Spain in real estate without any background or qualifications although some are registered through a professional association. A booming property market means a very good standard of living. On the debit side it is a results orientated business, with a hard-sell approach and a despised reputation.

Hairdressing

Good hairdressing and beauty saloons flourish. Women go to a hairdresser on a regular basis, preferably to one where they can at least chat to the operator. Hairdressers with additional beauty treatment have an advantage. Independent, mobile hairdressers can also make a good living. English barbers rarely exist – yet men need to talk as much as women.

Hotels, guesthouses and B&Bs

This is yet another area where people dream of having a successful business in the sun. With a good establishment, in a good location, look at a capital cost of one million euros. Too much? Compromise on location by going to the country and renovating a ruin! This is only one downside. Income in a well modernised premises is only 50€ per night for a double room. The holiday season is short, so the room-occupancy rate is only 25 per cent over the year. Most visitors to the coast will rent an apartment or stay in a budget hotel on a package holiday. Guesthouse and B&B demand is mainly for independent travellers in the inland areas where it would be unusual for guests to stay more than two or three days before moving on. That is unless the location had something really special to offer.

Kennels and catteries

While finding the right premises may be difficult, demand is high. If someone wishes to go on holiday, or back to the UK to visit friends and family – where does the dog or cat go? People who live in Spain welcome a good English run kennel or cattery for their animals, not a Spanish owned one, as they treat their animals differently! Opening a kennel or cattery means a place in the country but a word of caution. Just because a person has bought land in the country it does not give them a right to open a business. Planning permission is necessary.

Property management

This covers property cleaning, pool maintenance and gardening. This is relatively low paid, unskilled and seasonal but if correctly managed can be a successful business.

Satellite television installation

This is one business where there is little Spanish competition – the language barrier in reverse. Demand for English language TV is high – or to be more direct, demand for a SKY package is high. While new urbanisations and apartments have communal satellite receivers, there is a demand from owners of individual properties.

Shops and boutiques

Selling the right product in the right area can be very successful. Examples are a flower shop, an English bookshop, a butcher, a small supermarket with British products and a second-hand furniture shop.

WORKING ON YOUR OWN ACCOUNT

A European Union national

European Union nationals can now work in Spain without any restriction. They can work under the same conditions as Spaniards, the only thing they are required to do is to obtain their residence card.

A non-EU foreigner

Non-EU autonomous workers must have the required residence permit and work permit. Non-EU residents in Spain with a work permit and an employment contract cannot re-establish themselves to work on their own account until they obtain a corresponding work permit.