Planning ahead

Financing your business in Spain

Planning ahead

If you’re making a living in Spain, in whatever capacity, you will need to familiarise yourself with all kinds of financial matters, so that you remain firmly in control of your new working life.

When you’ve reached the appropriate stage in your research, you should put together a business plan and take it along to a professional who’s familiar with the economic trends in the area you’re interested in and can advise you about the local business environment and any opportunities for obtaining financial support for your venture.

There are legal firms that offer a service in your home country and in Spain and specialise in advising on business ideas and financial plans. They can speak your language, they know Spain and its legal system and can help you to present your business plan in a form acceptable to Spanish banks and financial institutions. You will find advertisements for legal advisers who offer this type of service in Spanish lifestyle magazines. These are packed with useful information, articles and relevant advertisements, some of which also appear on their websites. Two of the longer-established magazines are Living Spain ( ), which has a reader’s enquiry service.

Common mistakes

The most common mistake people make when they arrive in Spain with plans for a new life is to be unrealistic about what they can achieve and overoptimistic in their financial projections. It’s highly unlikely that your business will make substantial amounts of money from day one. At this early stage, make sure your financial projections are pessimistic rather than optimistic. If the bug has bitten you hard, it may be tempting to brush aside those nagging little potential problem areas, hoping they will go away. If you don’t want your dream to turn into a nightmare, don’t be tempted to do this! Make sure that your business plan allows plenty of money to survive on until you can earn some of your own.

Some people suggest having resources to last a year, others as much as two or three years. Many foreigners find that the worst point for them comes at around 18 months to two years after their arrival. The novelty has well and truly worn off, business is slow, money is running out fast, and they don’t feel they can stomach any more Spanish bureaucracy.

At this point it’s very tempting to give it all up and go home, especially if you have a family with you. It only takes one of them to be homesick or unhappy and your business problems seem to be magnified a thousand times. Make sure you haven’t burnt all your bridges and sold all your assets in your home country. If your finances will run to it, keep a small property there so that you can go back and ‘regroup’ if you need to.

Nothing is easy

As a foreigner, you will find it doubly hard to make a success of your business – and not just because of the language barrier. Unfortunately, it’s all too common to hear of foreigners whose big ideas have turned to dust and who have disappeared overnight, in some cases owing money right, left and centre.

However genuine the reasons for this, it doesn’t engender trust from customers, suppliers and other businesses. Understandably, Spaniards and other foreigners alike have a healthy suspicion of new arrivals. It’s often the reason you’re given a wide berth until you’ve proved you’re here to stay. Part of the long hard road to success depends on your ability to prove that you have staying power and commitment within the business community here in Spain. Only you can decide whether it’s better financially (and for your sanity!) to cut your losses and go home or to stick it out. Much will depend on how good a start you get with your business and much of that will depend on finances.

This article is an extract from Making a Living in Spain. Click here to get a copy now.

Further reading

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