To be honest, for a long time I have wanted to to give a talk like this, explaining my experience in creating a company in Spain and trying to earn a living with it. I believe there’s a lot we can learn from a business-oriented talk. But, unfortunately, this is something that is missing in the WordCamp programs that take place both in Spain and outside our borders. That’s why I was very happy when I had the chance to present mine ?.
The title of my talk was “Entrepreneurship in Spain – based on real events“, because everything I described at the WordCamp was part of my personal experience in creating Nelio Software with David and Ruth. It was crucial to me make sure the audience understood from the very first moment that everything I was about to explain had an important personal component. That is, I wouldn’t be talking about somebody else’s experience or describing something I read in a manual—I was about to share all the stuff we have had to face since we created the company.
It all began in May 2013, when we had very little idea of what we wanted to do to make money. At that time, we started migrating webs from Drupal and other CMSs to WordPress in order to generate a minimum income and, at the same time, start developing our own software services.
A few months later, in August, we released the first beta of Nelio A/B Testing, and in October we had the first paying customer. In my opinion, it was a pretty good start! Sure, we had a lot of work balancing migration projects with the development and growth of our split testing and heatmaps service for WordPress, but we felt like things were going alright. In December 2015 we decided to get rid of migrations and bet everything to the development of another SaaS—Nelio Content.
Today we are a (or should I say “the only”?) Spanish company focused on the development of premium plugins for WordPress with a SaaS business model ?!
How To Set Up a Business in Spain
Setting up a company in Spain is a bureaucratic adventure. The most notable steps are:
- Register the name of the company, requesting a negative certificate of corporate name in the Mercantile Registry—just to make sure that there isn’t another company with the same name as yours.
- Open a bank account for the company. And yes, you will need to include an initial minimum capital of €3,000.
- Write the Bylaws. That is, a lawyer has to formally write the set of rules that will govern the company.
- Make the public deed of the business constitution, going to a notary.
- Do paperwork in Treasury. Here you have to obtain the provisional Tax Identification Number (T.I.N.) of the company, register the Tax on Economic Activities, and make a census VAT declaration.
- Enroll in the Mercantile Register. You will need the deed, the provisional T.I.N., and the negative certificate of corporate name.
- Get the definitive T.I.N. in Treasury.
Apparently, it’s possible to make things easier in Spain (I don’t know about other countries), but Ruth wanted everything to be impeccable, and so we had to follow the long, complicated path—I think that being married to a lawyer for over 25 years had something to do with this decision ?.
The Partnership Agreement
One point I also thought it would be worth highlighting is the partnership agreement. In case you have never heard of this type of document, it is nothing more than an agreement signed by all partners that guarantees a procedure for conflict resolution. For instance, the document describes how to proceed when new partners join the company or old ones leave it, indicates the roles and dedication of each partner, or includes non-competition clauses, among many other things.
Surprisingly (at least to me), it is not mandatory by law to have one. Anyway, if you are thinking of starting a company with more partners, I strongly recommend that you look for information about the partnership agreement and write one. Thus, if problems arise (and believe me, they will), at least you can be sure that what is agreed prevails.
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The Self-Employment Quota
Another aspect that I wanted to emphasize here is the self-employment quota. In order to work in your own company in Spain you have to register in the special registry of self-employed workers. Moreover, you will also have to pay a monthly quota of at least €267 (that’s what I call a good contributor day), no matter what—that is, this payment is mandatory from the very first day whether you have income or not. As you can see, the government does not make things easy to entrepreneurs…
It is possible to pay a flat rate during the first 6 months of self-employment of only €50 a month. But if you are managing partner, forget about this because you won’t meet the conditions ?.
But there are some good news! If you have an unemployment benefit in Spain, you can turn it into the monthly payment of the self-employment quota. Both David and I, when we finished our research contracts at the Technical University of Catalonia, accepted this possibility. And until a few months ago we didn’t have to start paying self-employment fees. Well, we did pay actually, but the State Employment Service reimbursed the fee every month.
After all these things, you can finally focus on the simplest part—selling your products or services in order to survive and make the bureaucratic effort worthwhile ?.
How To Sell From Spain to the Rest of the World
From the very beginning we all agreed that we didn’t want to focus solely on Spain as a market to sell our services and products. This may seem like common sense today, but I’m still amazed at the myriad of companies and freelancers in Spain that only target the local/regional market. Mind you, I’m not criticizing this, but I think there’s a lot of opportunities out there, only if they made the leap to more international markets.
Just have a look at the following chart showing the income of our Nelio A/B Testing service grouped by country…
If Nelio only sold premium plugins in Spain, we would have had to close the company several years ago. It is true that the English language in Spain is a huge barrier for a lot of people, but it is really worth investing in markets like the American—the cost-benefit is clearly favorable!
In fact, in order to be able to sell both in Spain and in foreign markets you only need a web and an e-commerce system. Although the presentation went into more detail in this, I don’t want to bother you with them now, so here you have a post by Ruth where she talks about billing solutions for SaaS.
How To Market Your Business Without Resources
You obviously need a (legal) way to sell your products and services, but before that you need people to be interested in them. In other words, you need someone interested in becoming your customer… which means you need to invest in marketing. Unfortunately, you do not always have the required resources (especially if you’re a startup with a limited budget). But, hey, this should never be an impediment! When there is no money, creativity must shine. And here in Nelio we have had to pull guerrilla marketing for a long time.
In the presentation I highlighted two actions we had carried out in Nelio. The first is to use our own products when possible, instead of relying on third-party tools. In particular, I commented that we use Nelio Content to plan and promote our content, and thus make some noise on social media.
We schedule messages every week on Twitter (about 10 a day) and on other networks (once a day) so that they are automatically published. Just by investing a few minutes a week, we can plan all our marketing messages and then focus on doing everything else without worrying about social media.
On the other hand, we are very proud of Nelio Content’s promotional video. We made it ourselves for a minimum fraction of what a professional team would have charged us. If you want to know the tricks we used to make the video, I explained them here. That’s a great example of well-used creativity.
Although it is trendy, believe me, creating your own business is not an easy task—especially in Spain. So the best thing you can do is look for some good fellow travelers that share your own perspective and interests, and who’re willing to take this path with you. If you can, don’t start up alone—you’ll need people to support you when you’re down, and you’ll help them when they need you.
Regarding the bureaucracy, I’m not going to lie—it’s a pain in the ass! But luckily you will survive and you will be able to pull forward. In addition, today you have many resources to seek help, such as business incubators or shared offices where you meet many interesting people. Again, don’t isolate yourself!
And finally, let me insist and tell again that we live in a global world, and so is your market. Don’t focus only on your country—there is much more out there. In fact, with WordPress you will have many business opportunities. Go get them!
Featured image by Enes.