After my life and work experience in Germany, I have now been living in Spain for more than six years. Here I was predominately working with German startups to help them gain their footing into the Spanish market until I realised that the Spanish market has one major downside: it wastes time. This assertion is not a joke, though many people are likely to critique it. To do business in Spain is difficult, very difficult. Which leads us to the question: Does it make sense to invest the hard work and expenditure on a relatively small market?
And if so, how does one best achieve success in Spain?
The majority of German businesses view Spain as a marginal market. They expand in Spain under the motto “it’ll work and, if it doesn’t, then it doesn’t really matter.” In some cases businesses expand with the help of interns and bad translations.
Here are reasons why doing business in Spain isn’t quite as easy as it may seem…
There is simply no win-win mentality
Bernardo Hernández, one of the most successful internet businessmen in Spain and an executive at Google, does not tire of stressing this point. He says he has had enough of doing business in Spain, where everyone is purely concerned with whether others are earning more money than they are. “You have to take on the culture of win-win situations and be happy when both sides win. That is far better than waiting for others to do worse than you so you can gain business advantages over them.”
It is almost impossible to do business over the telephone or via email
If you aren’t introduced through a third party it is difficult to be considered at all. The term “to show your face” is routine in Spain. Even if you’ve already met a potential contact for dinner, this meeting is only sufficient for initial friendliness. The topic of business won’t be raised during the first two courses, nor will it come up after coffee.
As is common knowledge, delays in business dealings in Spain are typical
Despite this, apologies for lateness are seldom offered, even when the culprit wants to sell something to you! When you have organised a meeting it is highly likely that even 5 minutes before the scheduled time, the meeting will be postponed or cancelled. So don’t forget to turn on your mobile phone so you can be reached at the last minute.
There are up to 14 public holidays in Spain
The majority will be built up to form long weekends. If the public holiday is a Tuesday, people won’t have to work on the Monday and if you call on the Wednesday their work will have built up so much that the phone call will be delayed until the next week. All up, that’s five days lost per public holiday.
There is no sense of courtesy
Deadlines are only grudgingly kept. It can also occur that you are requested to pay bills without having any contracts made for the amount. If you then ask for a contract you can be accused of refusal of payment.
Payment occurs after 90 days
Even with a new law that obliges payment after 85 days, payment 60 to 90 days after receiving an invoice is the rule, rather than the exception.
If someone says they have very good English language skills on their resume, you can be sure that this claim is highly exaggerated
Why expansion into Spain is worth it
At this point in time it’s likely that every reader has crossed Spain off their list of countries they want to expand to. But one should not give up. Spain has some good sides as well and remains a market with huge potential. If even Amazon decides to expand into Spain after 16 years, why not you too?
Especially promising is the Smartphone market. In this area, the growth is larger than in Germany’s (14-percent versus 11-percent, according to FlurryAnalytics). The Market Commission for Telecommunications says that e-commerce in Spain turned over more than €7.8 million in 2010, 52-percent of which was made through operations between Spanish and international businesses. Supporting this point is the well-known fact that Spain functions as a test market and gateway to Latin America. Therefore, it is worth capturing the approximately 98 million internet users in Spain. One should not, however, place Latin America and Spain in the one basket. The Latin American culture is very different from the Spanish culture, particularly in Brazil.
The question is therefore not whether you should expand to Spain at all but, rather, how you could best do this. If you have patience you’ll have the most success by working with a local partner.