Spain is still officially in recession, with registered unemployment at almost twenty per cent. With the painful hangover from the property boom party still lingering on and our European neighbours not investing here as before during the growth years, isn’t this the worst possible time to create a start-up business? Five business entrepreneurs tell us their experiences.

Starting out

“I had to do something, I had no choice, as the slow down in the property market meant business for my interior design was significantly affected,” explained Laura Charles, of Reviva Weddings. “I am not very good at doing nothing so when I had my youngest daughter it allowed me time out to rethink everything and inspired me to start up my Reviva Weddings business, which was always my ambition.” Laura is now a successful, modern day ‘fairy godmother’ realising the dreams of brides from across Europe with magical weddings here in Spain.

The recession was also a catalyst for Babak Alimoradian to change direction. He once worked in Marbella’s dynamic real estate sector, but with business slowing, it was time to think about something new. “The recession brought me a significant cut in earnings, and more free time to think and I realised that it was time to venture into a new business. I decided to follow my passion for outdoor adventure sports, and taking advantage of the great things Andalucía has to offer, like its amazing natural environment and climate, so I created Team Xtreme.” So the dark shadow of economic contraction actually inspired Babak to do what he loves for a living, so now he is a ‘purveyor of adventure’ to corporate and private clients from across Europe.

The story of Nina King, owner of the Oasis Dental Clinic in central Marbella, echoes this trend. “There were many factors to consider with the timing of the start of my business and I needed to make decisions which took them all into account. Yet at the end of the day, circumstances meant I needed to make the next move, recession or no recession!” Nina, born and educated in the UK, has now reached her goal of running her own dental clinic, and as an independent, professional ‘smile doctor’ she is meeting the public’s increasing desire to have a healthy, good looking set of gnashers.

Umesh Dhanji, director of Stylish Places to Stay, believes one of the secrets of success in a slow market is having a diverse customer base for your product or service. “Our upscale hotel booking and concierge service targets international clients, so we are less vulnerable to domestic market conditions. Doing business on an international level, with Spain as just one of our key markets, is making sense for us.” The ‘hotel guru’ believes Marbella is one of the best places for an international business, with great infrastructure, an international airport and a lifestyle and cost of living that are very favourable.

Challenges

Interestingly, when asked about challenges of setting up a business here in Spain, none of our entrepreneurs cited lack of finance or business loans as a major obstacle, in contrast to the belief of political leaders across the world that the banks’ reluctance to invest in new businesses is holding back recovery. In fact, the greatest number of comments about challenges actually referred to Spain’s notorious culture of ‘red tape’.

Nina King is maybe used to the laid back culture of her Caribbean background, but even her patience was tested many times when setting up her dental practice. “There is so much paperwork to comply with here! I think the regional government needs to look into streamlining processes and speeding up progress so that it is easier and less costly for business people to be compliant.” Babak Alimoradian concurred, “Yes, you need to be ready for a lot of bureaucracy to get your business off the ground. But persevere, as it’s worth it”. Laura Charles was disappointed at the amount of paperwork required to apply for any type of business support, and continued, “As a working mum it would be great if the regional government could offer help with nursery and childminding costs as I am sure getting us mums into business brings in more revenue to the government than the associated costs of helping us start out”.

Umesh Dhanji added, “There is also a significant burden put on new businesses that want to employ staff. The costs and risks really make one think twice before hiring.”

Silver lining

The recessionary cloud can have a silver lining. Although the economy has made it tough for businesses, some believe the crisis hasn’t been all bad. Ross Hinshelwood of Vergola Spain commented, “As the market has become more competitive, those business people that lacked professionalism or a truly winning product or service have gone; the market won’t support them. In my mind the business community here is now leaner and smarter for it”. Ross’ entrepreneurial spirit is in his blood; he’s a businessman who believes innovation is the key to success in a tough market. His unique terrace roofing system, created in Australia, is selling well as there are no competitors in this niche market. Being a ‘market marker’ has meant the recession has not proved to be damaging. “I am meeting major domestic and international players who are so much more open now to new concepts, innovation and niche products. Before the slow down, it would have been much harder for me to set up these meetings and close deals.” Laura Charles agrees, “Now is the time to target niche markets, as I’ve now found that people are so much more receptive to a new, creative professional. Also, building relationships with wedding planners overseas as well as local venues and suppliers is much easier now, as everyone is open to news ways to increase business.”

Umesh Dhanji believes, “the recession has had its benefits for our service as our trade customers are much more receptive to new marketing channels in these challenging times. We’re winning high level clients that I wasn’t expected to, so early on.”

Babak Alimoradian added, “In my mind, a recession is a good time to start a business; costs are much lower and also you know that you are not really missing out on a buoyant market during your set-up time. It gives you an opportunity to set up properly in order to be ready to reap the rewards when things start picking up again.” He continued, “I am currently in an office provided to me by CADE, the business support organisation of the Junta de Andalucía, which gives grants and free offices to new start-up businesses. I would never have got free or subsidised commercial space in the boom years, yet the Junta recognises that Team Xtreme is promoting Andalucía and its natural assets to an international audience.”

Nina King has spacious premises in the heart of Marbella for her new dental clinic, something that a few years ago would not have been within the reach of start-ups. She confirmed, “I’ve been able to take advantage of incentives and offers with commercial space. I’ve also invested in the state-of-the-art dentistry equipment too, so I’ve planned for the future, when business is set to increase”.

So, for these risk takers it looks like investment in the future, even in these challenging times, is paying off. By focusing on quality, service and innovation, commerce can emerge from a recession in a stronger position than before; so it isn’t such a bad time to be in business after all.

Business Start up ‘Top Tips’

Advice from our entrepreneurs

Be original and innovative.

Enjoy your work – customers can tell!

Marketing, marketing and more marketing!

Keep overheads low.

Be reliable and focus on service.

Build credibility.

Learn Spanish.

Take a long term view.

Persevere with the paperwork!

Have finance in place.