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Written by Ann Hobbs
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Start With A Level Head
If you want to start a business then your head must rule your enthusiasm. There is no point thinking that just because you have a skill you simply have to print a few cards and customers will start flocking to your door. It won’t happen!
Now I can hear many of you saying ‘well that’s obvious’ but when your eagerness to get started takes control ‘the obvious’ can become overshadowed.
If all you want is an interest and a little income as an added bonus then fine, but if you are looking to make a living from your efforts then dispassionate groundwork must be done to see if it is viable.
Buying a Going Concern
When looking for any business whether it is a bar, restaurant, gift shop or a franchise operation check the length of the lease. If the term left is small find out if you can negotiate a new contract. You don’t want to hand over a large premium for a five year lease on the hope that at the end of it the landlord will renew. No matter what is said or promised you can never be sure that any good intentions now will be valid further down the road. Get it in writing. Landlords have been known to wait until a business is up and running successfully and then cancel the lease and leave tenants homeless and with no capital to start again.
Ask to see the IVA returns and get a copy of past years trading as well as what is happening now. Make sure you get information in printed format from the accounting system used then take it to an accountant that has nothing to do with the area. This will give you a truly independent feel for the business. Of course issues such as foot fall and future potential must also be taken into account as well as the question ‘why is the business being sold?’
A new venture
It takes a lot longer than most people think to establish a new business. The most common mistake is the expectation that any surrounding English population will provide enough clients to generate the cashflow you want.
In reality, most of the expat population is spread over a wide area and that means you may have to travel long distances to get work. The areas that do have a large UK density also have lots of small businesses vying for any work available, so competition will be strong.
Again research as to viability before you start laying out money or committing yourself to premises or equipment. Think about what is currently available and how can you bring added value to customers. How different are you and can you show that you are able to provide a better product or service?
Your advertising is paramount. You will need to put in masses of time to get the business known locally. Talk to other businesses that may be complementary as well as potential customers.
Even though word of mouth recommendation is the best form of praise, you must be continuously visible, that is why advertising is important. It is a well known premise that if a business is slowing; more should be spent on advertising and less money in other areas. Any advertising campaign should be well thought out, do not go for the cheapest or for the most expensive. Consider carefully if printing off 10,000 A5 flyers is really going to work for you or would the money be better spent on a boxed advert in the local newspaper.
And don’t forget that it will take time, probably months before you see any return from your efforts.
Whether it is a going concern, franchise or a brand new venture, you will need to keep the rose tinted glasses in their case and use a hard headed approach to the future. Take legal advice, use a good accountant to review any figures you have and view future figures with prudence. Do not sign anything until you have all the information you need.
And finally, it is not as gruesome as it sounds; there is always room for new opportunities. Businesses have a life cycle and people move on. If you have the right product and start on a sound footing there is plenty of room for you to achieve whatever you want to in Spain.
If you have any queries arising from this article or any Money Matters queries contact Ann on 661003324, email
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