26 Degrees in the Shade . . .

Selling / Buying A Business Leasehold In Spain

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In response to several enquiries, I am writing a post on Selling a Bar Leasehold, and this information can of course be applied equally to buying leasehold.

 A 5 Or 10 Year Lease

When you sell a bar lease hold you can choose to offer either a 5 or 10 year lease. The price of the lease which, is a one off payment is based on the value of the business. If the bar is closed the price will be quite low, whereas a bar which has been up and running and taking good money for say 10 years will be priced higher.

When you sell the lease you are effectively selling everything within the bar and the established client base, but you are not selling the bricks and mortar.

The new owner will pay you a monthly rent on which you, as the freeholder are obliged to pay about 15% income tax. The new owner is required to pay VAT on top of the rent.

The new owner can renew the lease after the term has expired. At this point the rent is renegotiated slightly within laid down boundaries and the new owner carries on for another term of 5 or perhaps 10 years. NB: The new owner does not have to pay the lump sum to renew the lease.

The owner may sell the lease on to a third party after first offering it backs to the freeholder. If the freeholder does not intend to buy the lease back, the lease may be sold on in which case the freeholder is entitled to a commission from that resale.

I am not a layer or an accountant, so I have just given you a rough guide to how the leasing system works the reader is advised not to make any financial decisions without first consulting a professional for precise information.

Coping With The School Holiday Rush In Your Bar In Spain

When you start working in your Spanish bar or restaurant, you will always have to be prepared for school holidays in Northern Europe, as your trade will increase sharply.One week before any school holiday in say the UK you will need to increase your stock by 100%.

At the moment there are about 2-2 ½ times the number of people who are normally here, just because the schools are out in Northern Europe.

Our regular butcher who supplies us with meat each week, not only gets much larger orders from us at Easter (and all the other long holidays), but he has many other bars and restaurants who also want double their normal supply.

My advice is that you order 2 weeks before you need the supplies and follow up the order with a reminder about one week before you are due to collect it.

If you wait to the last minute you may well get the poor quality cuts of meat or be given less than you have ordered, both of which are bad for business.

Don’t forget to order extra beer and soft drinks, as well as spirits. Sometimes you’ll be able to borrow a crate of Fanta or a barrel of beer from another bar, but that’s a very risky strategy to adopt. It’s much better to plan ahead and have plenty of stock of your own.