Many people have the dream of starting a business in Lanzarote. There are many business opportunities on the island which have yet to be exploited, but there are also traps for the unwary. Here are 7 questions which, as an absolute minimum, you must know the answer before you commit to anything.

Can I get the necessary licences to start my business?

To run a business in Spain, you need a licence to trade, and that must specifically state what activities your business can carry out. Whatever you do, don’t invest in product, marketing or anything else until you’ve established that it is possible to trade doing what you plan to do. How easy it can be varies massively according to what you plan to do.

Who is my target market?

You need to be pretty clear about who is going to buy your product or service. Is it island residents? That’s an audience of about 145,000. Is it English speaking residents? We’re down to under 10,000. Is it visitors? A big market – 2.9 million, and even if your target market is English speaking visitors, you’re still looking at more than 1 million. Knowing your target will inform your marketing, so…….

How am I going to let that target market know about my business?

That’s easy once you know your target market – just go where they go. Which magazines and websites do they read? Which social media platforms do they use? Find where they go, and be there as well.

How hard will I have to work?

This is where it all goes wrong for many people. They have a vision of short days earning a living, and long evenings enjoying cocktails around the swimming pool. That’s rarely the case with a new start business, so be realistic about how hard you will have to work initially in order to hit your business objectives, which leads us neatly on to……

When will I turn a profit?

Most new businesses that fail, do so in the first year. Have a realistic business plan, that shows all your projected income and costs, and then you’ll know when you can expect to start making money. This will also tell you how much you need to start with.

What’s the structure of my business going to be?

Are you going to be a self employed trader? A limited company or a partnership? Each has a unique set of costs which need to be taken into account in your business planning.

What’s my exit strategy?

It might seem strange at the start, but you should be aware of your longer term plans for the business, because that will inform how you run it, and how you record the results. Is the aim to grow it into a big one with lots of staff? Do you want to sell it at some time in the future? Or will you just run it until you’ve had enough and close it down?

This isn’t an exhaustive list by any means, but those are the basics, and if you can answer them, you have a chance of succeeding with your business idea here in Spain.