Hello Betty, welcome to the form. I'm not on the Costa del sol, I'm in Galicia but speaking from a general 'Spanish' point of view I'd say that now is not the time to buy a business. On the 'Costas' I would imagine that you'd be fairly reliant on tourism, where there has been a significant drop in numbers. The pund is weak against the euro (which is weak against the dollar) so prices would look steep aswell. There a huge numbers of businesses going to the wall in Spain at the moment, with Spanish unemployment at 20% and a large drop in tourists I can see why.
If you have a novel, radical business idea which would appeal equally to tourists, ex-pats and Spanish, have financial backing and reserves to last at least till the end of 2011, start your own business - don't bother looking at businesses up for sale - they are the ones that have failed.

Thank you Riazor Blue for your reply. I noticed that I had quite a few viewings but you are the only one who has replied. Thank you for that.

It makes depressing reading which is a shame but we are at the point of doing lots of research so we don't want to rush into things. We are planning on a trip to Estepona in August for a reckie. Our plans were / are to run a luxury B & B for couples without children in tow. Maybe we have our heads in the clouds but we have to have dreams and if we worried about all the things that could go wrong then we wouldn't walk out of our door each day.

Fingers crossed that within the next couple of years things pick up.

Thank you again

Betty 49

I've been meaning to reply to this for days now... if only I had the time. Betty, I don't know if you have been following what's been happening in Spanish politics recently but I'd definately say that now is not the time to start up anything here in Spain.

Keep an eye on property prices, the industry says that the adjustment in prices is now complete, but from what I can see, prices, at least in Galicia will still have to drop more. There is an increase in sales at the moment before VAT is increased in July, but after that I can see the market stagnating once again and prices are going to fall. As for tourism, over the last 18 months there has been a large drop in visitors from the UK and Germany, the two largest markets - the pound has recovered a little against the euro recently but is still weak, therefore things still seem expensive. With regards to tourism, eating out is expensive with the euro so high, alcohol aswell - in discos where I live a gin & tonic will set you back 7 euros.

Hello RiazorBlue

Thank you for your advice and insight. I agree that this moment in time is not a good time to start up a new business in Spain but we have no immediate plans so will take this time to search out our most favourite area first and take it from there. More excuse to have lots of holidays!

I don't totally agree with you about all businesses up for sale are failing. There are many reasons for people not continuing in business. Retirement, other family priorities, don't enjoy working for themselves, not being business minded to make a profit. etc etc.

Things will pick up I am sure. I believe in keeping a positive mind and looking at ways of how to achieve things (within our control) rather than 101 reasons not to do something.

Take Care

Betty 49

Hi Betty49
I read you post and replies with interest. I live and work on the CDS. My brother and I took the plunge and bought a small business in march of this year. I did alot of research and decided to buy an existing buiness rather than start one up. I paid a wee bit over the odds in hindsight, but we were able to get things up and running so much quicker, as the name was already known and had an internet presence. Would I do it all again and start from scratch, no definately not. For us buying this exisiting business was the only way to go. Yes alot of businesses are failing. However, if you are prepared to be patient, have faith, maintain a quality product, perservere and get your name known then you will be fine.
No sooner had we started to take bookings etc, then the volcano happened. So we thought that was that, but things have improved and the pound is doing well again against the dollar. We are mobile so cover all along the coast and visit Estepona frequently. We had enough resources behind us, that we budgeted to make no profit at all in 2010, but build a solid business.
However we have had a really great reaction and are now exceeding our buisness plan that we are looking to have a base somewhere on the coast.
My advice is research, research and more research.
If you are afraid then you will not get out of bed in the morning.
There are still plenty of visitors coming to the CDS, and you are aiming towards the high end of the market.The high end hotels in Marbella have suffered, there is no doubt about that, many are teetering on the verge of bankruptcy. However the rich Arabs are coming back, and investment in Marbella and the CDS is happening again especially with the Qataris. One has just bought into Malaga football club, and the Mayor of Marbella has just announce more investment and projects funded by Arabs, so all is not doom and gloom on the economy down here.
I don't know how well you know the CDS and Malaga province, but with your research you might find Estepona is not really where you want to be. There are places inland for example. Malaga is hoping to be European capital of the year 2016, the roads are undergoin an overhaul, and by next year they will have completed the main road that takes you from Malaga to Marbella avoiding the coast completely. So plenty of scope for your B & B elsewhere. Inland is also popular for people touring and avoiding the CDS concrete jungle.
Property prices have not bottomed out here. Problem is alot of people have their properties financed and cannot afford to drop the price, however it is a buyers market and there are bargains to be had, and negotiations on rental properties.
Hopes this gives a wee bit more hope. Let me know what you do!
Ed

Hi Ed

Thank you for taking the time to reply. I am so pleased that you have responded with hope and optimism rather than doom and gloom. We are visiting Estepona in August and we are also interested in the next town along, starts with M.. Minerva?? can't quite remember but it looks smaller and less frantic.

What type of business are you in? I think your advice on buying an established business is sound. I take your point about living on the coast, and property tends to be more expensive there, but we currently live right by the coast.. practically on the beach, having lived by the coast all our lives we would definitely miss a sea view or being in walking distance from the beach. Of course, the other option is to buy property in land for rent and to live on the coast ourselves. Not sure yet. We need to take a good look around and when we have found the right location we need to visit frequently in all seasons.

I am pleased to hear that things have picked up for you.

Many thanks
Betty 49

It may be the news you wanted to hear but I have lived on the coast 15 years and I don't agree with many points.

Buying an exisiting business usually means you are probably paying for goodwill that doesn't exist. There is no recognised due diligence in Spain and the figures can easily be fiddled, usually they tell the buyer that profits are low because of tax. I am not saying that this particular poster's business is not a success but he must be only one of about a thousand that is! Self employment fees are high too. Hotels are having a lean time and with many offers for 3 star hotels at around £25 B&B you would have a lot of competition. Most businesses close or are sold within a year.

B&B has been done to death. After those TV programmes thousands thought they would move here and run one. There are many up for sale throughout andalucía with non-existant clients. Sorry to be negative but that is how it is. Tourism is way down and this year is the worse I have known. The Quatari project is just hot air at the moment as have been many others that have gone with the wind.

As I mentioned you have to do your research, and have a unique selling point, that makes your business stand out. Whilst I would not trust any accounts from a business in Spain that does not mean due diligence is non-existant. You do your own surely?

As the CDS is effectively tourism, I quite agree that there is no such thing as paying for goodwill, as there is none sotospeak. But there is more to a buying a business than just goodwill, what about stock, buildings. internet presence etc.

Yes, there are umpteen B&B / Guesthouses etc for sale. How many businesses were bought with a business plan in place. Not that many I am sure. Fail to plan, and you plan to fail.

Betty is obviously not pitching at the mass market but a more specified market. It might or might not be there in sufficient numbers. She has already said she is prepared to visit in all seasons etc.

What I would say is that with the different nationalities I have worked with here on the CDS, the Scandinavians love QUALITY and are still prepared to pay for it. Have a quality product at affordable prices, get your message across and you will succeedm but it does not happen overnight. You have to have sufficient funds afor the longhaul when your reputation kicks in.

My mother ran a Guest House and I know the work involved competing against travellodges etc, where price alone does not work.

Also depends whether you are supplementing an income or having to rely on the B&B as the primary income.

That is the point of research and due diligence, is it viable before you take the plunge, unlike the thousands who buy and sell within a year.

Below is a posting from todays Málaga newspaper. Short translation

EDIT: Sorry, but this post has had to be edited for copyright reasons. Please feel free to post a link to the relevant webpage, rather than reproduce material.
David HT Mod

Oh well, sorry folks, if interested you will have to run it through google or something

http://www.diariosur.es/v/20100717/marbella/aprieta-ahoga-vecinos-20100717.html

If you toggle down below the report there are comments and the one about the desperate state of Estepona was made at 10.35.

ooohhh errr, I had best take a look at that then!

Thank you to everyone who has replied and taken interest in this.

Betty 49