Things are looking up for Costa del Sol

For those dreaming of a better life under Spanish skies the news that starting a business in Andalusia is to be made easier couldn’t be more welcome. With unemployment still at a record high across the country, property buyers need to create their own source of income if they wish to live at the Costa del Sol permanently. However, in the past many entrepreneurs fell at the first hurdle because of Spain’s notoriously long-winded bureaucracy.

According to the Spanish Tourism Board around 5.6 million visitors are expected to visit the Costa del Sol’s resorts this summer, which means there is once again the potential to make money with a cafe, bistro or guesthouse. The head of Andalusia’s new Junta, Susana Díaz, had promised at her inauguration that the number of administrative hurdles stopping entrepreneurs from getting a business idea off the ground would be significantly reduced.

Now a decree to cut down the amount of paperwork involved is about to be put into practice, following a cabinet meeting at the end of April. Setting up a business in Andalusia will be made far easier, which means that at least in theory it should be possible to create a new company within 48 hours, according to chief economist José Sánchez Maldonado.

Less Paperwork means more time for Marketing and Sales

The decree is protected by legislation and will either reduce or cut 64 administrative steps while at the same time providing the government with all the data they still require for the supervision and registration of legitimate businesses. If the decree works as planned business owners should find their administrative burden is reduced by 30%.
 
According to the President of the Tourism Board, Elias Bendodo, resorts like Marbella at the Costa del Sol will see 8% more tourists between June and September 2014 compared to last year. Overnight stays in guesthouses, B&Bs and hotels are expected to rise by 9%. However, while the Tourism Board expects a surge of visitors from traditional markets like Britain, Germany, France and Scandinavia, much is still to be done to attract greater numbers from emerging markets and improve domestic tourism.

To promote one’s business, be it a guesthouse, cafe or bar, one needs time – and this is where in the past the administrative burden had particularly hampered smaller businesses.
 
New Powers to Town Councils

The Junta hopes their new ‘declaración de inocuidad’ (declaration of innocuousness) will give town councils the scope they need to waive environmental impact tests, when new businesses are created that clearly would not have any hazardous impact on the environment, pose a nuisance or be a risk to private or public property or danger to public health and safety. This alone should speed up new company formation procedures.
 
In addition, the Junta has promised to assist with registration and public notary costs, which should help particularly small start-ups, where every cent counts.

The new town council powers and decree governing the formation of companies is expected to be fully operational by the end of the year.

Setting up in Business
 
Marbella property buyers often dream of running their own guesthouse or B&B, but unless someone has experience in hotel management this dream can soon turn into a nightmare, not just because of Spanish bureaucracy.
 
Even if the books your solicitor has inspected look good, you should do your own thorough investigation into how well the competition does before you decide to buy what will be your home and business in Marbella.

If your guesthouse is to have its own catering side, sit down in a Marbella cafe and count the number of customers entering per hour at different times of the day. How many members of staff are needed during the busiest shift? These are costs you need to factor in.

How many guests arrive at guesthouses in your chosen area during autumn? How did the guesthouses attract out of season business in the first place? If the answer is that your competitors had to cut room rates to such a level they were merely breaking even, you should consider other options.

You will also need to consider ongoing running costs like staff training, repairs and maintenance, not just taxes, salaries, water and electricity.