Derek Harvey

It will come as no surprise to long term residents and regular visitors that a proportion of British entrepreneurs fail to do their homework when they move to Spain to set up a business, according to a report by the University of Plymouth Business School.

While the report doesn’t go quite as far as the often heard anecdote about people leaving their brains at Málaga airport, it doesn’t fall far short.

Newcomers are not, for example, sufficiently aware that Spanish employment laws and business regulations are quite different from the UK, many believing that there is standardization across the EU. Fluent Spanish in such individuals is rare, the report says.

A very distasteful aspect of the report is that it highlights the vulnerability of newcomers to fraudsters from their home countries. It reveals that fraud is common with both British and German communities in Spain and most victims are new arrivals who make easy targets for their fellow nationals.

Bars and restaurants can be sold to unsuspecting newcomers who fail to spot that the accounts are false, while placing fake customers at tables, paid to make the business appear thriving to prospective buyers, was also reported as a common trick.

The study concluded that too much trust is placed too quickly in strangers just because they come from the home country. It says that those arriving in Spain, cash-rich from the sale of properties in their home country, should be alert to the possibility of conmen who are quick to befriend and then defraud.

In one extreme case, the researchers came across a family living in a rented caravan because they were too embarrassed to admit their situation to their family back home. The parents had owned a hotel in Britain but their Spanish dream had gone horribly wrong with the entire family, including children who should have been in school, working as cleaners.

From our own observations, one of the most frequent errors newcomers make is not listening to the number one rule of any business, location, location, location. In Nerja, we have seen even real estate agents, who should be impressing this rule on clients, breaking it themselves.

There are some obvious pointers if you are looking to set up a business. Are there several vacant premises in the street? Is there much building going on nearby – apartment buildings with commercial premises on the ground floor, which will add to competition once they are let. Go and sit in a bar or a café at different times of the day and, if possible, different times of the year and check how much passing trade there is on the street. More importantly, do it in a bar or restaurant you are thinking of buying but don’t let them know when you are coming.

Check on how many owners a business has had. We know of one café/bar that only opened about three years ago but has already had three owners and the most recent ones are rumoured to be trying to sell it. Being one we pass every day, sometimes a few times, we have noticed that there is hardly ever more than four people in it. We certainly wouldn’t take it as a gift if we were looking to invest in one.

But we do have one advantage however over somebody who was featured on TV’s Living in the Sun. We know that you need gas to pump beer. It is hard to believe that the man featured in the programme who opened without gas had ever been in a pub in his life.