Buying a business in Tenerife. Any advice?

[tenerife13]

Hi,
I am planning to move to Tenerife with family and want some advice about business please.I have twin boys age 3yrs.Our plan is to buy a business eg (Bar/restaurant/mini market) and to have that our source of income.We can afford to invest 50-60 k euros.Can someone share their experience and advice that what can be the best option for us?

We have been to Tenerife couple of times and really like Los Christianos.Will that be a good place to start a business?
What are our chances to survive with a 50-60k investment?(we have bar/restaurant experience as well)

Thanks,

[AL JAY]

I would like to alert forum member CIM to this thread,he may have a thread saved from the old forum which you will find very beneficial,It will answer all your questions and is by far the best post i have ever read on here!

[Leam_Lin]

CIM was on holiday in Florida.

[YOUNG GOLFER]

Still is on holiday ..... but he will reply and share a link I am sure.

Buying a bar is a no no from me and to be honest for around 50k it aint going to be that good that's for sure.
Welcome to the forum by the way.

[CIM]

Read this:
http://tenerifeestateagents.net/bars-for-sale-in-tenerife-warning/
And don't do it under any circumstances - you have ZERO CHANCE at making it work.
The only exception to this is if you are happy to spend around 12 months under extreme stress, working long hours, wondering why it's not working, with no time for your kids or each other and hoping your relationship will still be in one place when you have to return to the UK with no money.

It's that bad an idea...!

[AL JAY]

This was the post i was looking for,originally posted by Treble99 and re-posted by CIM .....

You have to be careful moving here. Take off your rose tinted glasses NOW!!

Should you make it here, you will have a truly great life, be the envy of nearly all of those in the UK, those who just “wish and dream” but never TRY!

I have seen so many people come and go. I have known people that have come with large amounts of money from the sale of their UK properties and return to England with nothing. I have seen people come and return because they can’t find work. I have seen people come due to a "firm" job offer only to find the job does not exist. I also know people that are just “surviving” here because they only get work "here and there", "in bits and bats". I have seen people come and go because they fall into, what I call, The Tenerife Trap. By this I mean the cheap beer and the sunshine. They find themselves drinking all day and have the attitude “ill find a job tomorrow”. Sometimes tomorrow never comes.

However, I also know a lot of people who have made a good life for themselves and their families here.

My guide to Tenerife survival and building a great new life is this, based on my experiences, cockups and the good decisions I made. I have also drawn experiences from watching others.

#. Join, use and take advantage of this forum. When I arrived on the Island I didn’t know about the forum, I wish I did. No matter what questions you want to ask, however trivial you may feel they are, then ask them. The forum members will do all they can to answer your questions and give all the help and advice they can.

#. Enroll at a Spanish class. By speaking the language will open up more opportunities for you.

#. If you are coming with your partner, you must have a rock solid relationship in order to get through the transitional period of relocating to a new country and the stress the Island can put upon you. I have seen a few couples arrive, and within a few months etc their relationships start to crumble. They say that the most stressful things in life are divorce and moving house. I have never been divorced but have moved house numerous times and believe me, the stress that the Island can put on you is so much greater. If you are coming here because you are having relationship problems in the UK and you feel that the move will bring you closer together, DON’T DO IT. It won’t work.

#. Be prepared to be homesick. This will only hit you after your “honeymoon” period is over and you face your first problems or frustrations. I have seen so many people who “loose their way” when trying to deal with the way the Island works, getting legal etc. They feel “lost” and “alone”. When this happens, to many, The UK can seem the better place. Work through it, think of what you have here and fight for it!. I question anyone I have spoken to who has said “I have never missed the UK since I have been here”. To be honest, I think that every one, in the first few months at least, does feel a tad homesick. I know I did and consider myself to be a very strong character.

#. Discipline yourself. Get here and start “doing” straight away. Don’t take a “3 month break” etc. Its to easy for the 3 month break to turn into a 4,5,6 month break. Take a break when you have established yourself here.

# Don't burn your bridges with the UK. By this I mean, if you own a property in the UK don't at first sell it. Rent it, even if, without the sale, it means you cant buy a property here. The rent will pay your mortgage and should give you a little income on top. Then should you find after however long, that you feel you have made a mistake moving here, or your family cant settle etc, you can always move back without the hassle of having to sell your property here. Even if you sell up in the UK and put the money away until you have made up your mind about living and buying here, you will, I assume, only be bringing the equity your property has made. Lets say, for arguments sake you bring 100k, the equity. Then you find you don't like it here and you move back. Whats 100k going to get you in the UK? You may have a healthy lump sum as a deposit but will you get a mortgage to top it up? You will first have to find jobs and hold them for a few months before, I assume, a mortgage lender will lend especially in the currant economical climate.

#. However, If you do come here with a large sum of money with which you intend to buy property, then put it away somewhere safe, somewhere you will not pick at it. Rent a property at first to make sure you like the new lifestyle etc. Give yourself plenty of time to decide about buying here.

#. Get legal as soon as you can. NIE, social etc. This has to be your first priority. You can not legally work without it or get your kids in school etc.

#. Get medical insurance ASAP. It will take a while to get into the social system and should you need medical attention and you are not covered either privately or by the state, you will find that the hospitals may not treat you.

#. Only turn to “creditable” people for advice on legal matters etc (NIE social, tax, car ITV’s etc). I used to ask 10 people the same question and get 10 different answers. I have met on the island so many people that are full of crap; claim they know everything but in fact no nothing. I then employed a fiscal to take care of everything. It was such a relief and I knew I was covered properly from every angle.

#. Be who you are and be proud of what you have got. Don’t bull @@@@ people. Like I said the island is full of them. People will be so much more willing to help you if you are genuine. I am always happy to help genuine folk, haven’t got any time for bull @@@@ers though.

#. Get out and about as much as you can. Generate contacts, mingle with folk but beware of everyone! Trust no one. There are many people who will be glad to rip you off. I thought I was shrewd and switched on but I got taken for 500 euros off a so called friend within the first 3 months. It took me 3 years to get it back.

#. Take any work you can at first while you are finding your feet. Don’t cherry pick work as it will pass you by. Once you are earning, then start to look for your dream job. Remember, when you are working you will be building contacts which may come in useful at a later date.

#. Be prepared to earn a pittance here compared with your UK wages. Employers here pay poor money because, well, they can! and the demand for jobs is so high as many are out of work. Sad I know but its a fact. A recent post on this forum suggests that 1000 to 1250 euros per month is a VERY GOOD Tenerife wage. You will earn approximately 5 euros an hour doing bar work.

#. Fight fight fight for your desire to live here. If times are hard, if people knock you back, let you down and generally mess on you from a great height, then fight back (not literally). Look in the mirror every morning and say “no one is going to get me down today. I am a fighter and I will survive”. You may find that the island at first, draws resources out of you that you didn’t know you had. One can either lie down give up and die, or fight and survive.

#. When you have settled and are enjoying “another day in paradise” purchase a nice bottle of Champagne, walk, with your partner etc to the shore one night as the sun sets, crack the bottle open, look across the sea and scream “we've bloody done it”, let your emotions pour out. Then go home and enjoy the rest of your days on this stunning Island and take advantage of what Tenerife can offer that the UK cant.

[tenerife13]

Thanks for the advice.What would you recommend that I can do with my savings(60k) in order to earn a living in tenerife or it is just simply impossible?

Thanks,

[Muppet]

Close, very, very close to impossible if you have a family to support and your only revenue stream will be what you and your business produces.

34% unemployment here, 5 euro an hour the going rate for bar work - if you are lucky, no social welfare system as such, certainly nothing like Job Seekers allowences, child benefit, rent suppliments and so on.

Unless of course you have such a unique business you plan to start which those who do have any income are going to flock to you for.

Stick your 60k in an ISA for the moment, dont touch it!

[kiwiphil]

I think if people knew the answer to that one they would already be doing it.

Have you ever run a business in the UK? Its not as easy as you might think. Even in the UK, a very significant percentage of businesses fail inside the first 2 years. Trying to run your first business in a foreign country will be challenging. What jobs do you do in the UK? Ideally you want to do something that builds on your existing experience. Changing career, country, and not speaking the language is going to be hard work. Learn Spanish before you come to give yourself a fighting chance.

I moved here last year but have work back in the UK, so I am lucky. I work remotely most of the time and then commute back every third week, so its still hard work. But I have seen some very smart and resourceful people with great networks of contacts here who are still unable to find work.

If you are buying an established business, question why its for sale. Alot. If it is making good money then the owner would simply put a manager in place and make a nice ongoing profit - they wouldn't be selling it! If someone could return £5k per annum on £50k after wages then this is a good return and people would be queuing up to invest. So you have to assume the return will be alot lower.

[tenerife13]

Thanks everybody for the messages and advice about buying business. Can someone please help me regarding costs. I would like to know that what are the costs involved in buying a business(restaurant) in tenerif.I know that we will have to pay for the business in the beginning and then monthly rent,but in addition to that how much will it cost for the following and please let us know if we have missed anything:

-Taxes
-Legal fees
-Rubbish disposal
-Any kind of council tax
-Average water,electric,gas bill (For restaurant/bar of 30-50 seats)
-Any other kind of tax or fee

Thanks,

[9PLUS]

Arona?........

[casabonny]

You would need to give more info.Will it be an SL company( Limited company) or run as Autonomo ( self employed ) only, Partnership?
If you are intending to employ staff then you need to factor in wages, nominas and the related taxes and Social payments.Annual personal tax returns .
Would you be buying an empty local or one that is currently being run as a business?Will fixtures and fittings be included and is everything in the kitchen stainless steel?
I beleive you have to have Hygeine certificates and of course adequate Insurance .
What about advertising?
Just some more things to think about! Good luck

[tenerife13]

Thanks everybody for the messages and advice about buying business. Can someone please help me regarding costs. I would like to know that what are the costs involved in buying a business(restaurant) in tenerif.I know that we will have to pay for the business in the beginning and then monthly rent,but in addition to that how much will it cost for the following and please let us know if we have missed anything:

-Taxes
-Legal fees
-Rubbish disposal
-Any kind of council tax
-Average water,electric,gas bill (For restaurant/bar of 30-50 seats)
-Any other kind of tax or fee

Thanks,

[9PLUS]

As casabonner has already mentioned you need to give more precise details


Or the answer is between €2000-€10000 per month which I'm sure doesn't help you.

[tenerife13]

The plan is to buy a restaurant/bar.We can register it as LTD.My business partner is experienced and have already three bars in Finland operating under an LTD company name.I live in Ireland and he live in Finland and we are planning to move to Tenerife with families.I have a full time job in Ireland that I will be giving up.His bars will be run by the workers in Finland as both of us are looking to settle in sunshine.I have catering experience as well as I have lived in Cyprus as a student few years ago.As per staff is concerned we both will work there any way but probably need an extra hand.We are looking to buy a restaurant that is already running which mean that the kitchen will be in operative condition.

Hope you can advice about costs based on this info.Please let me know if you require any further information.

Thanks,

[redarrow]

50k is not enough for a bar. Some spend 50k just doing a place up.

[9PLUS]

50k is not enough for a bar. Some spend 50k just doing a place up.



This is very true