Whenever you open a business, the move involves a one-person show. So, you have to fund the business and determine its mode of operation. However, the growth of a business is different from its establishment. The growth of a business brings in external factors that compel one to run their business uniquely.
If you open a business in Spain and overlook the external factors that influence the growth of the business, your business growth can flatten fast and within a short time. Notably, you do not have any control over some market forces. You must employ various strategies to grow your business in Spain, including engaging the Spanish translational services. Globally, opening a business entity is easier than growing it.
For this reason, you have to adjust your business operations to adapt to the prevailing market conditions.
The Need to Grow Your Business in Spain
For successful business growth in Spain, you must know why you require that growth. There are several reasons why you need to grow your business in Spain. They are as follows:
- In the Eurozone, Spain ranks fourth in terms of economic size. It is a country with a stable economy that favors business growth.
- You can take advantage of free trade agreements because Spain is a member of the Eurozone. Also, you can benefit from cross-border trading using a single currency. In return, you will avoid the costs related to currency exchange.
- Spain stands as an international business hub. So, you have an opportunity to globalize your business and generate more revenue.
- Spain invests heavily in business research and development and pro-start-up legislation. These moves seek to attract, promote, increase scalability, and retain business investments. In return, your business can grow rapidly because of this favorable environment.
Future Group, a language service provider (LSP), researched some of the strategies you can apply for your business to grow in Spain. We identified the following strategies:
Comply With the Initial Business Establishment Regulations
It is impossible to grow an illegally-established business in Spain. If the relevant authorities discover that you overlooked some of the business establishment prerequisites, they will close it down. Such a move can delay the growth of your business because you will get busy dealing with the authorities. So, follow this simple procedure to ensure compliance:
Step 1: Identify the Governance Nature of Your Business Entity
If you want to run a legal business in Spain, first, identify the structure of your business governance. It can be limited liability or any other acceptable form. This move determines the type of registration you will pursue for your business.
Step 2: Get a Número de Identidad de Extranjero (NIE) Number
If you are a non-Spanish business owner, you must get an NIE number. It is a business identification number. EU citizens get this number faster than non-EU citizens. However, take your time until you get it.
Step 3: Register Your Business
The next step entails visiting the RMC (Registro Mercantil Central) offices or online platform to register your business entity or company. This registration process confirms whether your business name matches any existing business entity in Spain. Doing an online registration is easier than physically visiting the RMC offices.
Step 4: Get a Bank Certificate
You have to open a bank account for your business. In return, you will get a bank certificate. However, you must deposit some money in the account to get the certification.
Step 5: Make More Registrations
The last step is to carry out more than one business registration in Spain. To simplify the registration process, apply for social security consideration. To get approval for this consideration, carry the documents you already have plus a TA 0521 and visit a local security office.
Note that there is no need for applying for a Código de Identificación Fiscal (CIF) tax identification number online. Spain abolished the need for this number in 2008.
Understand Spain’s Corporate Tax Structure
If you become a perennial tax defaulter in Spain, you will spend your revenue paying for the resultant penalties. In return, it can be hard to grow your business. For this reason, you have to understand the nature of Spain’s corporate tax structure.
To begin with, the fiscal calendar of the country ends on December 31st. In other words, the fiscal calendar is similar to the typical date calendar. It would help if you also understood that Spanish residents pay taxes for their domestic and foreign income. However, non-residents pay tax on the revenue they generate from Spain only.
The other important aspect to note regarding Spain’s tax structure is that non-residents pay a flat-rate tax rate while residents pay a progressive tax rate. Also, embrace paying state and regional taxes as a resident.
If a non-resident becomes a resident in Spain, they have to pay an income tax. However, the good thing is that the government gives them a five-year break. During that period, the government treats them as non-residents.
Understand the Tips for Market Entry
It is impossible for you to grow your business in Spain if you do not understand some of the fundamental principles you must observe. What are some of these principles?
Cherish Physical Meetings
Sometimes, you have to hold a meeting with your business stakeholders. In Spain, such a meeting can bear more fruit if you physically meet with your stakeholders. Notably, Spaniards cherish physical meetings. Such a move can change investor leads into actual investors, among other positive transformations that your business can achieve.
Also, it would be best if you understood that Spaniards prefer formal meetings. For this reason, you must dress formally, address Spaniards formally, and not get overboard with jokes.
Understand the Spaniard Diversity
Spain has more than 15 different communities. Also, each community has unique values and cultural aspects. If you want to grow your business, your operations, products, and services must align with cultural diversity.
One of the methods of localizing your business entails engaging the language service providers. These service providers can help translate your marketing content into a local Spanish dialect and context. In return, the Spaniards can appreciate your business because they can identify with it.
Offer Favorable Credit Terms
To operate a business successfully in Spain, offer your customers at least a three-month credit term. Spaniards cherish credit terms. For this reason, you have to cushion your business adequately to accommodate the credit facilities.
If you offer unplanned credit terms, you can fail to maintain feasible working capital. In return, you can fail to meet your short-term obligations. So, always make the necessary provisions to promote sustainability in your business.
Globally, a problem solver always becomes a successful business person. Such a person offers what is in demand. If you provide generic products and services, you will fail to carve a niche in the market. In other terms, you can face stiff competition.
To become a problem solver, you must research how people live in Spain. This move can help you identify what the Spaniard market is missing. Afterward, opt to meet the identified social need.
Alternatively, you can opt to research the limitations of the available products and services. Afterward, you can adopt a transformative approach that creates products with extra convenience. Such a move can help you attract customers from competitors.
Hire a Competent Manager
If you hire a competent manager who understands the Spanish market dynamics, your business can grow. Such a manager knows the bottlenecks that exist in the market and how to overcome them. The manager should understand the Spanish way of operating a business, overcoming bureaucracy, and the Spanish compliance requirements, among other aspects.
Identify Your Customers
Spaniards are technology savvy. So, you have to adopt digital marketing tactics. Also, the country is host to a vast aging population. For this reason, you can opt to target this population as your preferred customers.
Spain still reels from the 2007 recession. This event made Spaniards become price sensitive. So, price is a determining factor that can make or break your business. However, Spaniards do not like low-quality products and services, even though they are price-conscious.
If you sell substandard products and services, your bad reputation can spread like wildfire because of the wide usage of technology in the country.
Like other Eurozone countries, Spaniards cherish ecological products and services. Also, they have a strong inclination to ethical consumption practices. So, choose to go green in your business processes and adopt ethics on a large scale.
The Bottom Line
Given Spain’s unique business environment, you must adopt unique strategies to grow your business. Generic strategies that work in the global business environment have a high probability of failure in Spain. For this reason, you have to select your business growth strategies carefully.
The potential for business growth in Spain is very high. The country has a positive business environment, and its government invests in measures to attract and retain business ventures.
So, it is time to grow your business without further ado.