Friday, December 1, 2006

Starting a business in Spain

Our team opened a cafe two and a half years ago in Santiago. From time to time I get e-mails or phone calls from ministries or individuals not native to Spain who ask me about starting a business in Spain. Today I thought I would highlight some of the most important things that we have learned.

1) This is the most important thing I can say to anyone considering starting a small business in Spain. Before doing anything you should retain a Gestor. This is a position that does not really exist (to my knowledge) in the USA. In this office not only do they provide you with a lawyer who is an expert in business law, but they generally have a staff of accountants, and for lack of a better name "errand runners". Before we had a good gestor I spent most of my free time during the week when I was not working, running from one government office to another. A gestor is a go-between for the business and any government office that you need to communicate with. In the long run they will save you a lot of time and money and frustration.

2) Employees are very expensive. First of all, if you sign a contract with someone for a year, after vacations and bonuses you will pay them for approx. 14-15 months worth of work. Minimum wage is different for different people. It depends on the type of job, age, gender, and a variety of other variables (for example: it is cheaper to hire a girl under 20 than say a guy at 32).

3) Don't be afraid if everything is not perfect. It is almost impossible for a small business to navigate all of the legal paper-work needed to open in a timely fashion. Most small business owners open while still petitioning for licensing. If you are working with a gestor they can let you know what risks are worth taking and what are not.

4)Look for subvenciones, or subsidies that the government provides for various types of businesses. There are tons of subvenciones available if you know where to look and who to ask.

5) Join an association that works in your sector. Associations normally charge a nominal fee and give you important information regarding changing laws in your field as well as training and discounts on certain items.

6) Ask lots of questions to friends who have a business like the one you want to start. Here are the big three for a cafe: 1) How much do you pay in rent? 2) How many square meters is your cafe? 3) What would you make on a typical winter/summer day? The answers may vary from location to location and cafe to cafe, but if you can get a small sampling of your area you can tell if the place that you are looking at is within the normal price range.

7) It only counts if it is in writing and both parties sign it. (an official looking stamp does not hurt either) 'Nuff said?

8) Assume your gestor expects you to have an innate understanding of Spanish business laws and practices and ask a lot of questions based on that assumption.

9) Patience is a virtue. When you find a location that you like take it slow and make sure that it will serve all of your needs. Be picky and particular and make sure it is place that you can be for a long time.