Work where others go on vacation! This saying has almost become a catchphrase. Whether fueled by German TV dropout series or inspired by the increasingly popular “digital nomads” who can work from anywhere in the world while sitting at their notebooks. The dream of many is to move their life abroad and become self-employed.

And those who envision their future abroad and also want to be independent usually do not intend to work in an office, but in a more relaxed and informal environment.

Opening a restaurant, a beach bar or simply a café is therefore at the top of the wish list.

It is usually assumed that the least qualification is required and that anyone can do such a job. All according to the motto: “If you don’t become anything, you become a landlord”.

However, the reality is very different. Not only in Germany. Also in Spain.

If you want to be successful in the catering sector in the long term, you need to pay attention to many things, have a certain talent and skill, and also be able to think commercially.

In a restaurant, for example, it is not just a matter of being able to prepare tasty dishes. This quality must be provided on a permanent basis. The price/performance ratio must be right. And mistakes in purchasing and costing have ruined even the most gifted chef.

The same applies in a figurative sense to the operation of a beach bar and also to a simple bar without any kitchen.

The location, the furnishings, the choice of music, the staff, the pricing policy, any events taking place, etc. all this has to be planned for the long term and cannot be improvised.

This planning must essentially cover the following four areas:

The actual business idea, the legal and economic requirements to achieve the actual implementation, including financing if necessary, the choice of the right premises including furnishings and contract (purchase or lease), and the staff. Even if each of these aspects is given its own numbered heading, they should not be examined in this order. In some cases, the transitions are fluid and each area influences the others. Rather, the aim is to arrive at comprehensible and convincing results in all four areas.

1) The business idea

Just wanting to run a restaurant or bar is not enough. Developing a successful business idea means not only having an idea of what you would like to implement, or what does not yet exist on the market in this form, but also which needs you address and which problems you offer a solution to. What profit margins can be achieved in this way, and how the investment and efforts relate to the profit.

As unromantic and unemotional as it may be, a business plan must be drawn up. Among other things, it must provide answers to the following questions.

• What exactly do I want to offer?
• How does my offer differ from that of the competition?
• Where is there a suitable demand for my offer?
• Would the desired activity be permitted at this location (keywords: noise, opening hours)?

A market study must therefore be carried out. It must then be further examined whether this demand is suitable and what is needed to meet it.

• What do I have to invest in the premises so that I can meet the more far-reaching legal requirements (keywords: noise protection, electrical installation, kitchen equipment, smoke and steam extraction, separate toilets, emergency exits, fire protection)?
• What do I need to invest to make the premises attractive (keyword: decoration, music and lighting system)?
• Can I change the façade if necessary (franchise offers, concept restaurants or bars often have to convey a certain impression from the outside)?
• What can I contribute myself, for which activities do I have to hire third parties?
• Which advertising measures are promising?
• What are the costs of the advertising measures?

Even if a final answer to the financing requirements and possibilities can often only be given once not only the business plan has been drawn up in abstract form but also the first contacts with credit institutions or financiers have been established (unless there are corresponding own funds – but the same need for planning security should also exist), it must already be possible at this stage – i.e. in the planning and drafting phase of the business plan – to show what risks and what potential exist. It must be demonstrated where and how future earnings can be generated. What losses could occur. What investments might be lost (e.g. expenses due to redesigning the premises), etc. What the relationship is between investment, income and expenditure.

2) The legal and economic requirements

As with any business, the question arises as to the appropriate form of company in which self-employment should be exercised.

In the catering industry, the most common forms of business are sole trader, sole trader Sociedad Limitada (Spanish limited liability company) and as Comunidad de Bienes (comparable to the German GbR).

You will find further articles on this website about the different company forms to help you make your decision.

The Sociedad Limitada is particularly recommended for larger companies with numerous employees and possibly several operators or shareholders. With a very low share capital (3,000 euros), manageable administrative costs and the advantages of limited liability, as well as simple decision-making processes that are ultimately regulated or agreed by law, it is as popular as it is tried and tested.

With a small budget, a majority operator will end up with a Comunidad de Bienes. In the case of a single operator, it will be a self-employed businessman(Autónomo).

Depending on whether you want to run a bar or a restaurant, you also need to take into account things that are as obvious as they are easy to master, but which are likely to cause headaches. Especially if you initially overlook them and only find out about them afterwards or at the last minute. Many are more of an administrative nature, but should be clarified at the outset:

A restaurant must have a menu that is easily visible both inside and outside. The menu must be in Spanish as a minimum. Restaurants that are to be classified as luxury restaurants or first or second category restaurants must also have a menu in English and French.

All restaurants must issue invoices for their services. You can find a special article on this topic on our website here.

When installing kitchen appliances, refrigeration systems, cold rooms, air conditioning systems, etc., care must be taken to avoid noise and other disturbances. The relevant technical regulations must be observed in this area. It must also be ensured that the characteristics of the toilets and waste water and waste disposal systems comply with the standards.

In this context, it is often underestimated that all areas of the restaurant must be ventilated either directly or indirectly (by using suitable technical equipment).

The fire protection regulations must also be implemented correctly. This begins with the correct equipment with fire extinguishers and ends with the training and further training of staff. Every employee must know what to do in the event of a fire.

Live musical performances can also take place. As a rule, a maximum of four different musicians are permitted in restaurants. There must be no stage as such and it must be clear that a clear distinction from a theater or concert hall is possible. Otherwise, it could be assumed that the regulations governing theater operations are being circumvented under the guise of a restaurant.

Restaurants are divided into five categories.

There are those with one fork, two forks, three forks, four forks and five forks.

The menu and external signage must indicate which category is involved.

Whether the “award” of more or fewer forks is really important to you is a completely different question. Nowadays, completely different aspects determine the standing and reputation of a restaurant. However, if you are keen to adorn yourself with the appropriate label, you should know that there are rules to follow that initially have nothing to do with the actual quality of the food.

Five forks, for example, is the luxury category. To get into this category, you need, among other things, a separate guest and staff entrance, a checkroom, a waiting room, a telephone connection, air conditioning, hot water in the toilets, toilets separated by gender, an elevator if there is more than one floor, a cold room or cold storage room, an extensive wine list, etc.

Those who make do with a fork only need to have a separate kitchen from the dining room and stainless steel cutlery.

There is a similar classification for cafés.

Apart from this rather administrative classification, the future operator of a catering business must have a Spanish tax number.

For foreigners, the tax number is called “NIE”. This is the abbreviation for Número de Identificación de Extranjeros. In other words, an identification number for foreigners.

The number is issued by the Ministry of the Interior. This means that you can regularly apply for it from the National Police or the immigration authorities.

Before starting a business activity, you must register with the Spanish tax office and indicate that you will be carrying out an economic activity.

When you start working, you must also register with the social security system. By making monthly payments to the so-called Seguridad Social, you gain access to public medical care and at the same time pay into the Spanish pension fund.

If you want to hire someone, you must also report this to social insurance. As an employer, you will then receive a special employer ID, which ensures that you comply with the social security obligations that the employer has towards its employees.

A so-called visitor’s book can be signed at the Ministry of Labor and Social Security. This can now also be done electronically. If the authorities inspect your catering business to check whether you are fulfilling your obligations towards social insurance and your employees, notes can be made here.

If the premises need to be adapted and renovation or even construction work needs to be carried out for this purpose, a small(licencia de obra menor) or large building permit(licencia de obra mayor) must be applied for beforehand. For larger construction projects, it may be necessary to have a project drawn up by an architect.

An operating license must then be obtained from the municipality. With this so-called “licencia de actividad”, the municipality certifies that your intended business can be set up at this location. This means that, based on the existing building regulations and the project you have submitted, it is stated that such a project can be approved or will be approved at this location.

If you have the operating license, you must obtain an opening license after implementing all measures and fulfilling the conditions. This so-called “licencia de apertura” is issued as soon as the municipality has established that the project you have planned has been implemented exactly as agreed or intended. The project you initially presented, which received the operating permit in the first step, actually has the intended characteristics, which is why it can now be opened to the public by means of an opening permit.

Before the opening can take place, the local labor inspectorate(Consejería de Trabajo y Formación) must be notified so that they are aware that the workplaces are being commissioned.

In many municipalities and in all Autonomous Communities, there are registers for catering establishments in which they must be entered to enable a general overview and quality control. The catering sector is part of the leisure and tourism sector, which is why there is an increased interest in being able to check the correct functioning in a general way. In this context, specific complaint sheets are issued and, in many areas, inspection books are also issued for checks by the tourism authorities.

3) The financing

Apart from your own savings, some interesting subsidies can be obtained through clever planning. This applies not only to assistance for the self-employed but also to benefits for employing certain people. It makes sense to obtain comprehensive information here too in order to keep the financing requirements as low as possible.

If you can see how much outside capital you still need, the business plan can be completed and finalized accordingly. The search for financing from banks or public lending institutions can begin. However, make sure that you have already considered the following savings opportunities, for example:

• It can take months for any necessary conversion work to be completed and the opening license to be obtained. It is not unusual for this to take six months. Try to agree with the landlord that you do not have to pay any rent until all permits have been obtained.
• You can also expect small amounts of support from your future breweries and suppliers in Spain. Whether chairs and tables, bar stools, awnings, taps or tableware, you can obtain many of these items from them at low cost or free of charge. After all, your success will also be their success.
• Many furniture stores or interior designers are prepared to finance your investment. Instead of putting up the full amount, there is a good chance that you can pay off the purchase price interest-free over 24 months. In this way, you save on financing costs and can spread your equity over a longer period of time, thus retaining a certain amount of liquidity and the corresponding flexibility and freedom.

Remember, however, that in hindsight, most self-employed people admit to having overestimated their costs. For this reason, a common recommendation is to include a reserve of 30% of the total costs in addition to the planned costs, or to set them aside.

4) The restaurant

It is important to consider whether the premises should be rented or purchased.

In some cases, location is everything, and a very limited offer conditions your choices. If there is only one available restaurant on your must-visit beach promenade and it is only for sale or can only be rented, you will have to base your calculations on the circumstances.

Otherwise, as always, it is important to weigh up the pros and cons. Renting the right property not only represents a lower investment, and therefore a lower risk. Should you lose interest in your business despite its success, a lower investment not only means a lower risk but also much greater freedom. This is also the case with buying your own home. If you buy a house in the country, you can’t walk away as easily as someone who has signed a 12-month rental contract.

On the other hand, it is not uncommon for the initially friendly landlord to discover a business model for himself due to your efforts that he would like to continue without you. The tenancy is terminated on flimsy grounds. Or the tenancy is surprisingly not continued. Or you make it difficult for the tenant to continue his business in order to provoke a termination on his part. Of course, Spanish tenancy law also provides rules to prevent this, and the landlord may be liable to pay compensation to the tenant. However, it is better to foresee such situations in the contract, as the purely legal regulations are sometimes unsatisfactory and not suitable to fully cover any damage that the tenant may suffer.

4) The staff

As soon as the business concept is in place, it is important to consider what personnel requirements exist. What can you take on yourself as the operator, and where do you need to bring in external expertise or manpower?

To get an idea of the personnel costs, we recommend that you read the corresponding article.

As with any other business model, the same applies here: The worst mistakes can be avoided with clever planning. Spain may seem more accessible in many respects, but in fact there are numerous bureaucratic hurdles to overcome. Quite a few of those who have gone head over heels for such a project in Spain have subsequently raved about the oh-so-friendly, competent and unbureaucratic German officials. And they are absolutely right. In most cases, it is not the officials and administrators but the unprepared future entrepreneurs who have taken the second step before the first, thus putting themselves in an awkward position. This is no different in Spain than in Germany. Anyone who starts converting premises on the beach promenade without first finding out about the necessary operating license risks literally throwing a considerable amount of money down the drain.