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Going It Alone
Valerie Aubert Pietri - Apocapoc
French trio Valérie Aubert Pietri (38), Sebastien Détroyat (43) and Fabien Francheschini (43) set up eco-friendly co-working space Apocapoc in December 2013. The three own a documentary production company based in Paris and specialise in sustainable development topics. They moved to Barcelona in 2010, feeling this was the perfect place to launch their project. The sluggish housing market translated into lower-priced rental space, and the unstable labour market into many more freelancers and small companies in need of an alternative to office space. They also loved the lifestyle here and wanted to become more involved, “It was a way for us to get rooted and to start interacting properly and nicely with the local culture and people," says Valérie.
The Apocapoc founders had several challenges to overcome. Finding professionals with experience in eco-renovation proved difficult, as most were expensive and focussed on more corporate-type projects. In the end, they did a lot of the work themselves, along with an architect and construction team. They also found the bureaucracy hard to negotiate and getting all their papers in order was a long, complicated and costly process. “Coming from France where a lot has been done to facilitate and foster entrepreneurship in the last 15 years, we found that all the processes are more complicated and bureaucratic and involve many more intermediaries,” Valérie says. Selecting the right people to work with, from lawyers to accountants and bank managers is further complicated when you are not familiar with local business ways. “You need to check everything more carefully, which can take time away from your core business,” she adds. And the advantages? They’ve found people to be friendly, open to change and genuinely interested in the project. The founders of Apocapoc took advantage of Barcelona Activa’s services and suggest that anyone looking to set up a business here does the same. What other advice would Valérie give? “To have lunch late, to be patient, to speak Spanish, to understand Catalan and more seriously to keep away from intermediaries and do more themselves. And of course, we'd say one or two Catalan boyfriends or girlfriends, a good network, a smiley attitude and a good sunscreen!”
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Going It Alone
Jonny Biggins - The Book of Everyone
Until a year ago Jonny Biggins (45) was a creative for an advertising agency. He travelled widely for his work but has called Barcelona home since 2002. In 2013, he and fellow creatives, Steve Hanson (45) and Jason Bramley (43), gave up their jobs and launched The Book of Everyone. "The planets lined up. We had the idea, the timing was perfect with exciting new technologies driving personalisation across the world and we had a great network of amazing artists and writers to help create the content," says Jonny. This personalised and beautifully-designed 50-page book is created via their website around anyone you want in just a few seconds. Each book is a celebration of the individual stuffed full of interesting facts, strange statistics and curveball miscellany. According to Jonny, the recession was the driving force behind setting up the business, "Rather than be the last person to turn the lights out in the downsizing of the traditional advertising industry, we wanted to be at the forefront of new technology that could capitalise on the personalisation trend that was sweeping the globe." One of their biggest challenges was web development, an area in which they had very little experience. None of them had ever run a business before either, meaning they had to learn a lot of new skills. "We had to step out of our comfort zone and learn fast without making too many mistakes," Jonny explains. One of the reasons they love Barcelona is for its creativity and the opportunities it affords. "Barcelona is a melting pot of creativity so it’s great for us as we’re always on the hunt for new designers, photographers, writers and artists to keep the book fresh," says Jonny. He sees financial advantages and disadvantages to setting up in Barcelona. It is certainly cheaper than other major cities, and a web-based business can be built much more economically. On the other hand, there are less attractive investment schemes for both entrepreneurs and investors than in London, for example. For Jonny, a passion for what you're doing is essential, "Make sure you’re in it for the right reasons. You have to love what you do because the hours are long and each day there’s a new challenge you never saw coming." And his final advice? "Make it happen".
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Going It Alone
Aisling Mackin - Tutti Frutti
Aisling Mackin (37) and her husband Des Mackin (39) moved to Barcelona three years ago from Dublin with their now five-year-old son. They initially came for Des' work, but fell in love with the city and decided to stay with a view to opening their own business. "My husband and I wanted to be our own bosses. We worked for private companies most of our careers and at this junction of our lives we wanted to be self employed," says Aisling. Using their experience in sales and marketing and Aisling's passion for fitness, they explored many different business ideas, before opening the first European franchise of Tutti Frutti, a frozen yoghurt brand that is hugely successful in the US. The self-service “froyo joint” offers a delicious and healthy alternative to ice cream and includes dairy and gluten free options. Although they had some worries about opening during the recession, they felt that the opportunities such timing offered and Barcelona's huge tourist market would offset the disadvantages. “Our biggest challenge initially was finding the right location, which we eventually tracked down on Pl. Universitat,” says Aisling. And the store is a bright and welcoming 80 square-metre corner spot, with a small terrace, just by the university. The couple found Barcelona Activa's help useful with the inevitable paperwork trail, "Things seem to take some time to get done but eventually they are,” says Aisling. Her advice to a startup is to invest the time into getting it right. "There are no short cuts. Get the product/service 100 percent right first, then scale," she says. She also agrees that getting good legal and accountancy professionals on board is essential. The couple’s first year has been challenging in other ways too, as they opened the business when Aisling was seven months pregnant. Yet, despite sleepless nights and some complicated juggling between family and work, Aisling and Des are clearly very happy with the choice they made. Aisling recognises that being foreign does have its challenges, and you need to make a lot of effort to really understand how the market works. However, she adds, "Being a bit different is good. People remember you."
See photos for case studies.
Despite its 2,500 hours of annual sunshine, Spain has been living under a dark cloud for the last six years. The crisis has left the country's social and economic fabric in tatters and today’s statistics make for sober reading: unemployment stands at 26 percent; 57 percent of under 25s are out of work, and two million Spaniards have left the country in search of greener pastures. Anyone who lives in the centre of Barcelona will have witnessed scores of demonstrations by public sector workers against government cuts. The private sector has not fared any better and, even as the green shoots of recovery poke gingerly through, 180 companies shut their doors for good every day: in 2013, for every three companies that were started, one closed down.
And yet, despite this gloomy backdrop, new businesses do keep opening. Last year, in Barcelona alone, 13,593 new companies were created—nearly 15 percent more than in 2013. So who are these gutsy folk, confident that they can tackle the economy head on? What motivates them to invest their time, money and energy in such an unforgiving landscape? While Catalunya is Spain's second most entrepreneurial community after Madrid, it turns out that an increasing number of these new business owners are foreigners. The national 'entrepreneurial rate' (the number of people per 100 who set up their own business) stands at 5.8, which is one of the lowest in Europe. Among Spain's foreign resident population the figure stands at a much healthier 11.0.
Eva Cabré runs Cabré & Associats, a company that offers accountancy and legal services, and has noticed a big increase in the number of foreigners knocking on her door. Currently 80 percent of the businesses they set up are for foreign clients, mostly British, American, Australian and Scandinavian. “For these entrepreneurs, the quality of life that Barcelona has to offer is the key factor behind their decision to set up shop here,” says Eva. And, indeed, despite the recession and the daily dose of doom and gloom from the media, Barcelona as a business destination is apparently just as attractive as ever. In the UN-habitat State of the World’s Cities 2012-2013 report, Barcelona ranked fifth city in the world for life quality and urban prosperity. It has also topped the Cushman & Wakefield's European Cities Monitor report as the best European city in which to live for 14 consecutive years. Tourism is booming—2014 is expected to see a 10 percent rise in visitors—and the city is one of the top centres for international conferences in Europe.
Business coach Edward Hamilton agrees that most people go it alone in Barcelona because they either want to move here or stay here. Edward has worked with many English-speaking business owners over the last few years and says that the loss of job stability, reductions in salaries and long and unpredictable working hours have led many people to conclude that life as their own boss may be easier.
In fact, rather than being scared away by the recession, most new entrepreneurs see it as a time of opportunity. Local spending power may be low, but so are rents, salaries and other key costs. Edward reckons that trends here are usually several years behind the US, so if you can find a good idea that's working elsewhere, Barcelona could be the ideal location to set up. His own business, that he opened in 2013, is a good example of this. Lava Locker offers a 24-hour laundry and dry-cleaning service. You just drop your laundry at one of their lockers around town, pay by credit card and pick it up, washed and ironed, the next day. Edward's experience, both with clients and in his own venture, is that it's easy to stand out here by offering something new or just better, "Although ideas can take a little longer to stick here, there's very little competition, so lots of opportunity for importing ideas," he says.
So, just how easy is it to set up a company in Spain? Both Edward and Eva are adamant that any new business owner must have a good professional on board to steer them through the paperwork, and with good reason. Despite some recent simplification of the process, Spain is still a notoriously difficult place in which to start a business. In the World Bank's Doing Business 2013 report it ranked an astonishing 142nd out of 185 countries for "Ease of setting up a business", sandwiched between Fiji and West Bank and Gaza.
Although there has been plenty of rhetoric from the government about improving life for emprendedores, it seems that entrepreneurs are not enjoying the kind of support afforded to them in other countries. In 2013, in an attempt to redress the balance, the government passed its new Ley de Emprendedores, a piece of legislation that aims to stimulate entrepreneurial activity across the board. The changes include a reduction in the monthly autónomos fee, new fiscal incentives, access to training programmes and simplification of the process of setting up a business. Yet it seems local business people are far from happy with the government's efforts. According to the 2013 Observatorio de Clima Emprendedor—an annual study by software company Sage that takes the pulse of the country's entrepreneurs—89 percent believe the government does not provide sufficient support to new businesses. And in March this year, local small business association PIMEC, along with 1,400 local businesses and freelancers, took to Barcelona's streets to protest against policies which they consider harmful to their sector. Among the most damaging, it cites high social security costs, increasing fiscal pressure and excessively frequent labour and tax inspections.
Maybe it's the lack of inside knowledge that makes foreigners more likely to set up in business here; if they knew what lay ahead, they might think twice about giving up their day job. Certainly, Edward cites tax obligations and bureacracy as one of his clients' biggest headaches. For Eva, this is exacerbated by the lack of support provided by government offices in English. Other challenges that foreign business owners share with their Spanish counterparts are: keeping their workforce happy and productive in a country that has a poor record for employee-employer relations and, for many first-timers, acquiring the plethora of new skills needed to run a business venture. If they are new in town, a foreigner may also have cultural and language hurdles to overcome. “I’ve seen many foreigners pay inflated prices for traspasos or rents, not knowing the going rates or underrating their negotiating power,” says Eva.
So, what help is available locally for budding business people? The Ajuntament-funded Barcelona Activa offers a huge amount of resources to entrepreneurs and new business owners, including startup advice, individualised coaching and an extensive training programme. Like their other services, training sessions are free of charge and cover pretty much everything you'll need to get off the ground, from business skills, such as negotiating and managing people, to preparing a business plan and financial planning. One of their most useful services is guiding novices through that intimidating first hurdle of creating a company. Edward took advantage of this service when he set up Lava Locker and he recommends it highly to anyone alarmed at the prospect of a complicated papertrail of indecipherable goverment forms. Once you're up and running, the seminars and networking opportunities that Barcelona Activa run are an effective way to keep learning and meeting likeminded souls.
The best way to learn about the highs and lows is, of course, from someone who has trodden that path before. Australian native Mandy Keillor set up Studio Australia Barcelona in 2006, shortly before her 40th birthday. She had visited the city many years before and vowed to come back to live here. The health and wellness centre that she runs with her partner Natalia offers a range of treatments and alternative health practices, such as pilates, osteopathy, physiotherapy and massage. Mandy is positive about the effects that operating through the crisis has had on her and the business. “The recession has made our business better and my partner and I better business people. We’ve had to look outward and be more global.
We’ve had to use technology and become much more competitive in our approach to business. It has been difficult but I think that we’re richer for the experience,” says Mandy. She points to the very different attitudes to small business and the general lack of entrepreneurs in Spain, “In Australia we even have a small business Minister.” Her advice to any small business owner is there are many opportunities out there if you’re willing to stick at it. And, of course, to get a good lawyer and accountant.
10 tips for new entrepreneurs
By Edward Hamilton
1) Work on a strategic plan.
Ask yourself if your business is feasible and how you would go about making it successful. Devise a plan that will guide you during your start-up phase. A full business plan is only needed if you are looking to raise capital or seek a business partner.
2) Think positive but plan for the worst.
Take your sales expectations, half them and delay them by a year. Can you still survive? Cash flow is the biggest killer for start-ups in the first two years.
3) Research your competitors.
Every business has competition so find out which is yours. Then research them and create your unique selling position—why clients should buy from you and not your competitors.
4) Build your network.
The bigger your network the better your chances of success. Networking is an under-valued tool, especially in Barcelona. Go along to events, join co-working communities and be active in the social networks like LinkedIn and Meetup.
5) BarcelonaActiva is a great resource.
BarcelonaActiva have great sessions on what it means to be autónomo in Spain and will give free help to set up your S.L. too (this is a big saving).
6) Remember: Income minus Costs = Profits or Losses.
Understand your costs. You don't have to be a financial whizz, but it is important that you understand how much you need to make to be profitable.
7) Celebrate your first sale.
Starting a business is fun but challenging, so celebrate every milestone as it will make you remember why you are doing it. It's a journey, so enjoy the ride.
8) Investigate the help options available.
Enisa.es is the government investment fund for start-ups. There are also many business angels and incubators in Barcelona.
9) My favourite networking tip—it works every time.
Move past the awkward entrance: Stick your hand out and say "Hello my name is Edward, what is your name" after their response ask "what do you do, [Roger]?"—well done you are networking and someone is talking to you!
10) Look to give more than you take.
It comes back in spades. Good luck.
Barcelona Activa: www.barcelonactiva.cat
Catalunya Emprèn: www.catalunyaempren.gencat.cat
Edward Hamilton: Business coach
Cabré i Associats: Accountancy and lawyer
Spain Accounting: English-speaking accountants
Sanchez Molina: Business lawyers
Victor Sánchez Vaqué: Business lawyer
Guiri Business: Monthly networking evenings
The Business Lunch: Monthly lunches in English
Bcnin: Barcelona-based online business community
Barcinno: Online community for tech startups