In this article, we examine what it’s really like to open and run a hospitality business in Spain, and particularly on the coast of Spain. We offer practical tips and advice on how to conduct research, key factors to consider, and how to market your bar, pub, gastro pub, café, or restaurant.
If planned and managed well, a bar or restaurant can be a lucrative business in Spain that allows you to create your own special ambient and social community.
It can also engage your creative side with the drinks and food you serve, and the events you host.
On the other hand, starting a bar/restaurant can be expensive. There are licences, inventory, and equipment costs. And traspasos can be very expensive (where you buy an ongoing business plus its inventory and equipment but not the premises) but less hassle than starting from scratch.
You also need to consider the total operating costs. You’ll need to calculate your monthly employment costs, rent, service payments, food, drinks, insurance, and more.
And consider that hospitality businesses in Spain are subject to many legal and regulatory requirements and inspections encompassing food, drink, health, safety, noise, and employment.
Avoid becoming just another statistic
It’s a dream of many expats that relocate to Spain to combine their passion for food and drink with their keen social skills.
The reality though, is that the hospitality sector in Spain, especially on the coast of Spain, has one of the highest failure and attrition rates for people starting a business in Spain.
So what can you do to prevent financial losses, emotional stress, exhaustion, and family problems caused by your new business? How can you prevent becoming just another statistic?
Here we are going to examine some mistakes to avoid, how to understand who your customer is, ways to research, and strategies to incorporate into your business plan.
Hopefully, the tips here can give you a better chance of success.
The most important consideration before starting your bar or restaurant
Let’s start by saying the most important thing that you need to hear first:
“You need to create a bar/restaurant for the people, and not find people for the bar/restaurant you want to create.”
Without a doubt, you are going to discover that the bars and restaurants that are successful have owners who are supremely knowledgeable about the area and the needs of the people.
They understand the population cycles throughout the seasons and plan accordingly. They understand the demographics of their clientele, what they enjoy, and what they don’t enjoy.
After 20 years of living on the coast of Spain, my wife and I can spot a business that we know will fail, and usually, it has to do with the owner doing what he/she wants, ignoring what the local population wants, and not researching the area and necessary permits.
Ignore the needs and requirements of the local population at your own peril.
Be a bar & restaurant detective (there are worse ways to spend your time)
You can use local Facebook groups, like forums and connect sites, to ask questions about what hospitality services are missing in the area.
There will be a lot of nonsense, but there will also be some gems of information. Ask them what they like and don’t like about your potential competition in nearby areas.
And remember to enquire about what business is like throughout the year, and especially in Autumn and Winter.
Spend time in businesses in nearby areas to get a clear idea of their unique selling proposition (USP). Try to define what it is that makes them better than other businesses in the area, and what are the clear benefits for their clients.
Know your customer demographics
Once inspiration strikes and you have started to formulate a business plan, you’ll need a clear understanding of your customer demographics and you’ll need to keep their needs in mind at all times.
Try to find out as much information about your potential customers and their likes and dislikes. Consider their needs in relation to your value proposition. What services are not being met in the area, and what can you do better than others?
How can you improve your customer’s experience?
Answering these questions will help you create a strong business strategy that puts your customers first.
A word about location
On the coast of Spain, location is everything. Unless you are literally on the seafront or on the busiest main road what you save on monthly rental you’ll most likely have to invest in marketing which will also require more of your time.
You’ll discover that the busiest businesses are a) very near the beach, b) on busy main roads or c) in village/town centres where people don’t need to drive.
If you are going to choose a location other than the previous three mentioned above you’re going to need to offer outstanding food and drinks, atmosphere, service, and all backed by a lot of professional marketing.
Outdoor terrace or patio at pavement level
I cannot overstate how important it is to have a good size outdoor patio that faces the sun throughout the day. This alone in spring, summer, and autumn can be a huge drawcard for foot traffic on pleasant days, and can easily double or triple your revenue, especially when compared with bars and restaurants that can only offer an indoor space.
Coastal Spain is not Northern or Central Europe
I would advise against mimicking the business plan of a bar or restaurant outside of Spain.
Even if a business has had great success in London, Paris, Munich, or Geneva, that does not mean its Modus Operandi will automatically work locally.
There is no substitute for doing your due diligence to get a complete understanding of the likes and dislikes of your available clientele.
Negotiate everything
Spain is a country of negotiation. Don’t take the first deal offered.
From your suppliers to your rental, you will be surprised how much you can reduce your costs and therefore you financial pressure by negotiating everything.
Understand your licenses and agreements
Before you sign make sure you completely understand how and when you will be allowed to operate your business.
Just because a previous tennant had regular live music and operated until 3 in the morning this does not mean there was a license for it.
You’ll be surprised what you find out when you ask all the important questions. You’ll do well to get a professional to check all the documentation.
Feedback is important
When you open your bar or restaurant be in the mindset that it’s not the finished product.
Listen to your clients (the sober ones) and understand where you can adapt and make improvements.
Respond to reviews on your Facebook and Google pages, and when reviews are not great you can respond by saying that you assess every little bit of feedback whether negative or positive so that you can improve, and that you have taken steps to address their concern.
Invite them back for a discounted meal, or a free drink, to show them the changes that have been made due to their feedback.
This not only makes a huge impression on the client but also on the people reading the review.
Marketing Tips for Your Bar or Restaurant
Analyze the online presence of successful similar businesses in nearby areas to get a good understanding of their marketing and how they interact with and attract customers.
Create a Google My Business profile, and use local Facebook groups to advertise your business.
Offer to be a meeting point for local golf and sports teams, and even to sponsor their events and clothing.
Host events such as tastings for local wines, cheeses, and olives. Offer regular live music, and weekly trivia nights.
Note: Email, Whatsapp, and Facebook Groups work very well to help you communicate with your clients and to grow your brand. In addition, the contacts you collect are managed by you, not for example by platforms like Facebook (pages), Twitter, or Instagram that only offer a very limited distribution (perhaps to only 5% of your contacts) when you post something new.
Make a habit of asking your clients for their email addresses and Whatsapp and tell them that you would like to send them announcements of when you will be having new events like live music, quiz nights, food tastings, etc. Usually, people are very receptive.
Email is still an excellent method of communicating instantaneously and more personally with all of your clients.
This can be done as a bulk email send from your Gmail address, or using email senders like MailChimp (which offers free packages).
Note: The best strategy from your Gmail is to immediately send an email once you have a client’s email address, and ask the person to respond.
Google won’t have a problem sending emails to people with whom you already have a repertoire. The problem comes when you send 300 emails in one go to email addresses with no communication history.
Whatsapp is also an excellent marketing platform that allows you to communicate with many of your patrons instantaneously. You can create a Whatsapp group specifically for your establishment and then add all your new connections (your clients) to the group you created.
You can also create a Facebook group for your business. Facebook groups have a much higher distribution than Facebook pages. The advantage of a Facebook group is that, unlike Gmail or Whatsapp, it is a social platform that can work for you while you are busy doing other things. What this means is that your page can be recommended by Facebook, and by your group members to other people, and they can join and create content helping your page and your brand to grow organically.
If you need any help with any of this you can get in touch with us as this is in fact our specialty – we are SEO, social media, and digital marketing specialists for businesses in Spain.
