Could this be a good time to take over an existing business in Spain? - Discuss

I noticed some commercial kitchen items for sale on a different EOS thread, which reminded me of other similar adverts I'd seen on a recent trip to Spain. So it's reasonable to assume that some business owners have decided to call it a day, sell off whatever they can and in some cases have little choice but to walk away from existing building lease agreements that they can no longer afford.

When times were better (financially), many were queueing up to pay (for example) €600-€1000 per month to perhaps lease a small remote bar, and to acquire such a business they might have had to pay a lump sum of (for example) €60k-€100k for the privilige.

I'm thinking there must be plenty of businesses where the status quo is no longer financially viable (for whatever reason) so it follows that at least some of these owners would be glad to find someone to take it off their hands for free? (providing the incumbent took over the ongoing financial obligations obviously!).

It would take a brave person (or a fool?) to spend good money on a business thats not profitable, but there must be a few entrepreneurs waiting in the wings who would be willing and able to swim against the tide, if it were possible to meet monthly payments in order to inject some new blood and creativity into what may have become a tired business?

All that waffle is just me "thinking" aloud.. so what do others think?  Where can I find the equivalent of Daltons Weekly in spain?, or have I lost the plot altogether?   ;O)

Hola,

Have a look at this web site  www.kyero.com/ it roughly translates to "I Want"

 I have been using Kyero to look at houses for months now, and never once did I suspect it was meant to be 'Quiero' - Spanish for I want!!!!!!!!   I think I cannot bring myself to use the site again!!!!!!!!!!!    Why would they corrupt the word?????????  I have been saying (in my head) KI (rhyme with sky) ero - never connecting it with Spanish!!!!!!!!   

 As soon as we now new measures to promote companies and enterpreneurships in Spain by the new governemnt, we will now for sure if it is a right time to buy businesses in Spain

Pat, are you looking for a Spanish version of Daltons, or just a good listing of businesses for sale in Spain? Have you looked at http://www.businessesforsale.com/ ?

I have never quite managed to get my head around the "traspaso", or lease arrangement here. If someone is selling a good, profitable business with a proven track record and established client base, I fully understand them wanting a price for it. What I don't get and never have, is why there seem to be so many run-down, even closed-down bars/cafes/restaurants for "traspaso", with a price tag - for what, exactly? Usually it has been way more than the value of the fixtures and fittings. I think, however, as you have pointed out, that there are more and more cases where the "traspaso" is offered for a much lower and far more realistic figure these days, and yes, there may be opportunities for forward thinking and brave individuals.

Editted to add: this listing in particular would seem to be a case in point: http://spain.businessesforsale.com/spanish/Hotel-Hostal-In-North-Mallorca-For-Sale.aspx It's been on the site for ages, I enquired a long time ago about the rent, which if I remember rightly was around €2,000 a month. Now anyone who knows the island of Mallorca will know it's not in the best resort by any stretch, but if someone has a spare 80k or so lying around and time on their hands, you could buy te lease, cover the first year's rent, and have a go. If the figures quoted can be verified, the winter lets alone should cover your annual rent anyway.

Roberto -- know it well not for the faint hearted or deep of pocket. Pica (Germany in the Sun) has many many hotels for sale. Be very suprised if anyone can make monet. Need the Shaggaluff or Northern upmarket resorts to make money.

David

You are probably right. I turned down the opportunity to buy a lovely (freehold) hostal in Cala Millor (many years ago) for the same reason. I haven't been to Mallorca, let alone the east coast, for years, so don't have any recent knowledge of the state of play there. Nice part of the world for a "lifestyle" business though, if you don't need to make pot loads. This one does appear on paper at least to offer the chance for someone with not a huge capital outlay to have a go with it. But there's probably a good reason why there have been no takers; like I said, it's been on the site for ages.

Thanks for comments. Roberto, had a look at your link which invariably led me off at various tangents, most of which leave me thinking - as you said - "with a price tag - for what, exactly?"

To be brutally honest I see myself very much in "vulture mode" and I'll bet there are plenty of other people around who would be prepared to take a punt by soaking up someone elses debts/creditors in return for a free or low-cost start at resurrecting a struggling business. I also agree with your lifestyle point as whilst the suns shining overhead there's still something to be said for "simply making a living" rather than trying to become the next Richard Branson or whoever!

Trouble with human nature is we often tend to keep our heads buried in the sand until it's simply too late to act. Too many struggling businesses sit on agents books for months/years in the hope that someone will eventually come along and take their bad apple off them, ideally at something close to the price they paid themselves.
 

This is an interesting thread.  I do know of a couple of local bars which have recently changed hands but without money (legally or illegaly) being exchanged in return.

It seems the logical thing to do, before debts really spiral out of control.

Also, a new, fresh pair of eyes looking over the business can often identify what it's doing wrong and perhaps make a better job of it.

I don't think it's as crazy as it sounds but there is obviously a risk element involved.

Justin

Exactly. There's a cafe in Arroyo advertised in today's Sur in English for €4,700 - possibly a fair price for the fixtures/fittings/equipment etc., especially if there's a decent coffee machine. Rent €300 per month. Not a big risk for someone who wants to try to make a living where there are no decent jobs available.

 Where we live in Jumilla, we have seen plenty of changes over the last couple of years, with many businesses changing hands.  A Spanish friend was running a chocolate shop and my understanding was that she had financial  help for the first two years, however once that stopped, she wasn't making enough money to continue, which was very sad.  She is now looking for work in Murcia, as she thinks her chances are slightly higher there (I believe she has contacts.....!)

We have been told that a restaurant that has changed hands a couple of times and is now being refurbished is being taken on by people who were running a restaurant in a different part of town as the rent is a lot lower in the new premises.

Amazingly, one of our favourite restaurants is still doing really well. They built a new block beside their old restaurant, have opened a new bar and restaurant, which clearly they have spent a lot of money on, and are now doing up the old  bar and restaurant. They charge slightly more than many of the other restaurants, but we enjoy going there because the staff are very friendly and helpful, plus the food is good.

Sue

@Justin - of course it's an interesting thread... I started it  ;O)  seriously though, you've hit the nail on the head with the fresh pair of eyes.  It would be better for both potential buyers and sellers though (of businesses) to be liasing directly rather than through an agent. The seller wants someone to take his/her grief away thats all, and the buyer wants something that's financially viable and sustainable for at least a year or two with available funds (rather than speculative borrowing which is difficult enough anyway).

@Roberto - you're a mine of information! can you provide any link to "todays sur in english" I assume it's a newspaper? (excuse my ignorance).

Must confess I don't use this forum perhaps as much as i ought to, probably guilty of only posting when I'm after something!, so now I'll post up a couple of useful UK links and ask if anyone can advise where I might find something similar to checkout a spanish company.

At the moment (for a limited time) this link is totally free and if you login will allow you to fully checkout any UK limited company http://companycheck.co.uk/, I doubt theres a free one for S.L companies but if anyone can point me in right direction that would be splendid.

UK insolvency register is here http://www.insolvencydirect.bis.gov.uk/eiir/ again if theres a spanish equivelant please shout out.

Finally, as none of us is as smart as all of us, I'll invite anyone who has aspirations of sourcing a spanish business in the form of a rescue package (as opposed to traditional buy/sell) to send me a pm with a view to exchanging ideas or discussing joint venture possibilities etc.

Sur is the regional Spanish daily down south; they also publish weekly English and German versions. English version online: http://www.surinenglish.com/ - there are links on the homepage to a pdf version of the current edition (I don't think of the entire paper though) and to classified ads. Look for business opportunities under professional services, or commercial listings in the property sections. Again, I'm not sure the classifieds are exactly the same as the print version, because I can't now find the Arroyo cafe that I mentioned.

Sorry, on your other requests, I'm totally clueless.

  I do constantly keep thinking that there is a great potential in UK-Spain exchanges. In businesses too:

-English speaking kindergardens with programmes for parents´learning english

-Retirement villages or resorts in Spain

-Exchange programms ( Uk-Spain) for young proffessional people

-Spanish restaurants/ social clubs in the UK with social programms for  cheap and varied vacations in Spain

- English learning towns in Spain during summers

- Home exchanges

etc

etc

etc

All negotiations should be started with - How much will you pay ME for taking over your leasehold liability ? !!!!!!