August 24, 2016 No Comments

Opening A Bar In Spain – Dream Come True Or Your Worst Nightmare?

Many Brits dream of opening a bar in Spain, but have no idea how to go about it. The fact is that it is not so difficult, as long as you do things legally. However, it is not as simple as setting up the bar and opening the doors and expecting the customers and the money to flow in, which is a popular belief and the downfall of many who have tried.

Failing to make a bar work in Spain is down to a number of factors. First let us look at the most important:

Dream vs. Reality

The dream: You see yourself healthy, tanned and relaxed, sitting on a balmy terrace in a lovely comfortable rattan chair with your bare feet tucked daintily under you. You are listening to your favourite tunes over the music system while sipping a cocktail and chatting with your extremely well-behaved tourist clients who hang on to your every word tentatively; anxious not to miss a single detail about how you moved from hellish Hull to magnificent Malaga. Your partner is inside the bar, whistling merrily as he enjoys a beer while putting away a few glasses and gleefully cashing up the till, placing piles of money in the safe that you will take to the bank in the morning; or rather at midday because just like the locals, you rarely get up before 11 am.

The reality: It is 2 am, and you are scrubbing out the inside of a grease-caked chip fryer. The gas bottle has run out, and until you get a delivery on Friday, which is two days away, you only have cold water and a kettle to help you achieve this task.

Sweat is pouring from your brow, and you wipe it off on your filthy apron, as although it is night time, the kitchen thermometer still reads 35 degrees thanks to the hotplates and other machinery which have only just been turned off after running non-stop at high heat for 18 hours. You have two 5 lb slabs of greasy bacon lying on the counter giving you the evil eye that need to be sliced and packed up ready for the morning shift, and the entire kitchen needs to be wiped down and mopped out. You estimate you might be out by 3:45 am if you are extremely lucky. You live 20-minutes walk away. Your alarm is permanently set to go off at 8:30 am (yes, that’s seven days a week) and you know you have no chance of sleeping before 5 am due to your body’s need to wind down before sleep can take over.

You look up and catch a glimpse of your equally sweaty husband, who is escorting a particularly inebriated compatriot to the exit. It appears your guest forcefully expelled the steak and kidney pie, mushy peas, chips and gravy special for just 5.95€ he consumed earlier, as his T Shirt definitely did not have that pattern on it when you hurriedly delivered the meal to him several hours ago.  As your husband returns to the bar, you cannot help but note he has the look of a crazed homicidal maniac. He pours himself a pint, which he downs in a single gulp, then proceeds to prepare envelopes where he will put all the night’s takings, bar 93€, ready to pay the delivery guys in the morning.

The above scenario is rather tongue in cheek, although not completely a fantasy scenario by any means – confirmable by anyone who has run a bar in Spain!

Location, Location, Location

Apart from the fact the dream and reality are totally different, perhaps the biggest reason bars opened by foreigners in Spain fail is down to the choice of location. If you don’t know a town like the back of your hand, it is so easy to make a huge mistake location-wise when taking on a bar. You might think that a locale located just 20 metres away from the beach, albeit in a side street, will work just fine due the sheer number of people walking along the seafront. The same goes for busy shopping streets…that bar situated just 5 metres down the quaint alley that can be seen clearly from the shopping street has a fabulous position, surely?

No. They don’t. I don’t have the statistics why, but it will be for the same reason you will never see a McDonalds, Burger King, or KFC “just off” the beaten track. These guys know you have to have a certain amount of heavy foot traffic passing RIGHT PAST YOUR DOOR if your business is going to succeed. While I am not suggesting you need to be bang next door to McDonalds to make a business work, you do need to take note of how many people actually walk past the door each day. Being 20 metres away from where the passing foot traffic meanders past, is 18 metres too far in just about any Spanish resort.

Furthermore, if you go to a resort town and find a bar for rent or lease when the season is approaching, you have to ask yourself why it is available. If a good bar with a reasonable rent comes on the market and has not been snapped up by a local, you need to do some serious homework before laying down any cash. More than likely, the same premises have been taken over by numerous tenants who have found out the hard way that the location simply does not work, and therefore locals know better than to touch it. In a similar vein, the locale may not actually be in such a bad location, but the rent asked is simply too high for a landlord to come out with any sort of reasonable profit.

Don’t make the mistake of thinking you will fare better because you are:

Welsh/a Scot/can drink 10 pints of Guinness a night/friendly/love Arsenal/intellectual/hot/make amazing toasties/like kids/want to stay in the EU/insert your own fab feature here…you won’t.

No experience required? Think again…

There is also the issue of Brits arriving in Spain with no prior knowledge of running a bar. If you are a carpenter by trade, or made a good profit running a dry cleaning business in the UK, why on earth put all your hard-earned savings into opening a bar? Running a bar successfully requires advanced people skills and an outgoing personality; if you are not sure you possess these traits you should look at starting the same, or a similar business in Spain to the one you had success with in the UK. Thinking you can make a success with a completely different career change when you are possibly at a stage of your life when you simply do not have the stamina required, is asking for trouble.

Plus, sticking to a business where you have expertise is likely to afford you far less stress, more money, and much more free time than you could hope to enjoy if you take on a bar.

Lets also take a look at some practical points you will need to consider.

If you don’t speak the language, it is imperative that you have someone who does to help you. If you do not have friends who can fill this spot, you will need to sign up with an English-speaking gestor, which is a professional who is familiar with the laws and regulations in Spain. A gestor is a cross between a British solicitor and accountant; they will take care of the necessary paperwork on your behalf, including licenses and permissions. (Look for their offices, called ‘Gestoria’) Once the bar is open they will also take care of tax returns, employee contracts, etc. However they should not be confused with lawyers (abogados) that are necessary for other legal matters such as purchasing premises or taking on a leasehold.

You are advised to make many trips to your chosen resort before you even think about leaving the UK for good, to familiarise yourself with the area, noting the type of tourism, the length of season, the climate, etc, to be sure you choose the right town for your expectations.

Features or benefits or complications? Take a thorough look at the local!

Are you physically able to run the bar you have your eye on without taking on staff which will be an important drain on resources? Do you have the strength to lug a 50-litre barrel from one side of the bar to the other in 30 seconds flat when the bar is busy when the barrel goes?

Look at issues like getting the place open and closed – a bar with a terrace with space for 14 tables might seem marvelous, but have you thought about how much work this will take setting it up in the morning and securing it at night? You might think you and your partner could run the business by yourselves, but chances are you have underestimated exactly how much heavy lifting and work it really entails. And those pull-down shutters are great for keeping thieves at bay, but have you tried lifting one? They can be extremely heavy and if you have a bad back for example, you haven’t got a chance. These are small details, but you need to make sure you know exactly what you are getting into physically before taking on any bar business in Spain.

To summarise, here is a list of the pros and cons of opening a bar in Spain:

CONS:

1. Long hours of hard work; most bars need to open in the morning until the early hours to turn a decent profit.

2. You will be trying to make money from people who are often worse for wear – this is not easy work.

3. Legal fees for licensing and permissions are high.

4. Every employee with a full year’s contract automatically becomes a “fixed contract employee” meaning that if fired, or you have to lay them off for financial reasons, they are eligible for severance pay for every full year worked.

5. Employers pay a larger part of employees’ contributions than the employees themselves.

6. In low season there may be no business and many bars are forced to close in winter.

7. Self employed people are not entitled to unemployment benefits should things go wrong or if seasons are short.

8. If you don’t speak the language, integrating will take a while and the Spanish may understandably avoid your bar.

9. Running a bar in a resort is not as glamorous as it may appear. You probably will have very little time for socialising, for the beach, or indeed, even for sleeping!

10. Your relationship may suffer. If you open a bar as a couple, be aware that living and working together can be a huge challenge; one that puts even the strongest relationship to the test. Many couples find themselves working the bar on opposite shifts, only seeing each other briefly as one leaves and the other arrives (and will often argue on how the other is managing the business on passing).

PROS:

1. The levels of tourism in Spain are currently healthy; in a tourist resort you do have the potential to get clients, and therefore earn a decent living.

2. The weather is generally much better in Spain than the UK, and getting up with a long day ahead of you is somewhat easier when it is not pouring or freezing cold outside.

3. Your clientele will usually be in high spirits as they are on holiday, so you don’t generally have to contend with miserable faces.

4. The cost of living in Spain is lower than the UK, so you can live well for less.

5. In high season, there is a lot of money to be made providing you chose a good location.

6. Most resorts have a settled expat community, who are willing to give a new bar in the area a try.

7. Once you get working, you will be forced to learn at least the basics of the language. So you’ll find it easier to join in with the locals than non-working expats.

8. The Spanish health service (seguridad social) is excellent.

9. At present while the UK still remains within the EU, contributions are included from each country in which you have worked, and will go towards your pension.

10. Most banks have at least one English speaker and also you can request correspondence and online banking to be in English (You are advised to keep your UK account open too).

11. It will be fun! While we have highlighted the downside to opening a bar in Spain, there is no doubt you will have many unforgettable moments thanks to the many characters you are likely to meet, and the daft situations you encounter will keep you laughing for many years to come.

In short, if you are not afraid of hard work and a challenge, have enough capital to live on until you get established and start to see profits, and providing you pick a good location, you shouldn’t have problems. But if you are risking all to start anew, are not much of an extrovert, then you need to be extremely careful about where you go and your choice of locale, and would be better considering your existing talents as a way of making money in Spain instead of opening a bar.

Thinking of opening a bar in Spain? Be sure to enlist the help of experts; any outlay here will definitely save you money in the long term.


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