|Businesses, Bars, Restaurants for Sale in Tenerife and useful setting up Tips.|
Tenerife provides plenty of the right ingredients for a successful business. With a few tips, sufficient capital, sensible planning and hard work, most people can develop a business into a solid, profitable operation. Consider some of the features that should work well for you -
Tenerife business ventures have every chance of succeeding if you take heed of the lessons learned
by those who have gone before you. Once you have made the decision to operate, the temptation to
rush into something can be hard to resist - especially when being pressured into buying quickly
in order to 'not miss this opportunity'.
Most things in Tenerife proceed at a very leisurely pace, this applies to bureaucratic organisations
in particular, so rushing around is unlikely to significantly further your cause.
Businesses trade without Opening Licences !! Everyone will tell you this is normal in Tenerife. This is true, but doing so does not set any legal precedent, or imply that the business will eventually be granted, or even influence the granting of a licence - more on this below. Use a Gestor.
It all takes time !!
Obtaining and processing the necessary documentation to actually check out, transfer ownership and establish a new fully legalised management takes a period of time, over which no individual has particular control. If you are under pressure to effect a transfer of ownership immediately or 'lose the opportunity' then lose the opportunity.
We have sold and/or effected transfer or set-up of a wide range of businesses, including Bars, Restaurants, Retail Outlets, Motor and Market Traders, Radio Stations, etc. We love to see people 'succeed' in their endeavours, so don't let all of this advice and the warnings put you off - they are designed to highlight problem areas and help you realise your ambitions with the minimum of hardship. So use a Gestor.
Tip 2. Getting 'Stitched Up'.
There are many examples of being duped to greater and lesser extents. To keep this short, I have summarised the commonest examples below. You should always minimise your risks of this happening - else the financial and emotional hardship will quickly degrade your enthusiasm and enterprise.
In Tenerife, if you are not buying the freehold of the premises or Unit ('Local' in Spanish, pronounced Low Karl), then you will probably be paying a buying price called the 'Trespasso'. The Trespasso will be for the goodwill, internal fittings, plant and stock of the business. You will then rent the premises from a landlord, who will also require a deposit. These are all critical areas, and often where problems can arise.
Now go through my checklist below, noting all of the items. Some are relevant to renting premises only, or to existing business rather than new ventures, but they all eventually cause hardship.
Tip 3. Planning
If you don't have access to a computer and spreadsheet, do it manually. Try to predict every single expense you can, and then determine both the total capital outlay and what the monthly costs or outgoings will be. Obtain a figure for cost of sales and you can then work out what levels of monthly sales you will need to cover the monthly outgoings. You can then decide whether the level of sales required is a realistic possibility, easily expected. If you are happy with the basic arithmetic, then proceed to write down a complete business plan. Making early contact with an accountant can actually be very useful. The accountant will know, or find out, critical 'rules of thumb' figures for your chosen market sector, thus making planning easier. For example, the average 'cost of sales' for bars in Tenerife is about 40%. Thus, for a turnover of say 9,000 Euro's (comprised of beer, spirits, tobacco, crisps etc) your will have paid your suppliers 3,600 Euro's. This leaves a gross profit of 5,400 Euro's, from which you will be deducting outgoings such as those shown in the table. Email me if you need any assistance in finding the correct local figures for planning purposes or want to contact one of our accountants.
Tip 4. Legalities
Bear in mind that with the exception of a 'Residencia/Work Permit' (required by many foreigners) all of the other legalities must be complied with by everyone - not just you. Many people think that the bureaucracy is geared to just make life difficult for them, the truth is - we all live with it, Canarians, Spaniards, Brits, everyone. Most documents are necessary (in most of the world) to demonstrate that you -
Tip 5. Professionals
Don't be shy of consulting good professionals or paying reasonable professional fees. I will only ever
recommend that you use Canarian/Spanish Lawyers/Accountants/Gestors. 'International Lawyers' and other
'International practices' are wholly unsuitable, and rarely know the intracacies and implications
of the various 'Canarian variants' of Spanish law.
Most of them are a gold mine of information and only to pleased to give sound advice. Remember, they have seen it all before, many a dream shattered, and, many a fortune made. Don't use a lawyer to fight a court case, use him to 'avoid' a court case, by consulting with him early when a problem arises. Ensure that any documentation associated with your business (from the rental contract through to your terms of business with your clients) has been correctly worded and is legally effective in protecting your interests. A good accounting service will always save you money, more so in Tenerife than most places. We advise clients to use a specific professional based on the 'problem overview' the client gives us, steering them to competent people we know are experienced in frequently dealing with that particular problem. If you are unsure who to use, feel free to email Eurosol and I will suggest a professional appropriate to your problem.
Tip 6. Capital
Use your capital wisely and remember my previous words regarding high trespasso's. It is pointless spending almost all of your capital on purchasing the business, if you cannot sustain the incoming set-up costs and possible low initial turnover. Some funding for the first few months trading is essential, try to predict every bill you will receive and other eventualities in your business plan.
Tip 7. Good Service
Whether you are beginning an enterprise you have no previous experience in, or continuing your own profession, you must do it well. Do not start something beyond your capabilities (either rapidly increase your capabilities look into something else). Verbal recommendations in Tenerife can make or break a business - forget the FAST BUCK, long term this never works. No matter who you are providing a service to, whether it be tourism directly, or the local business/residential population, offer a good service at fair prices and word will spread. If you are patient and steadfast you will succeed.
I don't need to wish you good luck, because planning, research, and a bit of determination work better every time.