Secrets of Chinese business success in Spain

Last week it was announced that China’s richest man, Wang Jianli, was in negotiations to buy the iconic building in Madrid, the Edificio España, located in the Plaza de España and at one end of the Gran Via. According to ThinkSpain.com Wang Jianli's company specialises in luxury hotels and élite shopping centres, meaning his purchase of the Edificio España could 'turn around' the area completely.

Now my bookshop is located close to this area, and I can tell you there are a lot of Chinese businesses already there. As well as the ubiquitous bazaars and alimentacions (corner food shops) they have restaurants, beauty saloons, supermarkets and even driver schools for Chinese speakers in the area. This is not something unique to this part of town, nor to Madrid. It’s been noted for many years that the Chinese community are building up their own businesses all over Spain. There have been articles and research into how they manage to succeed in such a hard business climate. Perhaps one of the best articles I’ve read is this one, that gives the “10 Chinese commandments for entrepreneurs”. The full article is in Spanish, but I will list the “commandments” here in English, because I think they make good points. I have to admit I don’t comply with some of their guidelines, but this is a list I refer to often...

1. Choose a good premises, in a good location, but at a cheap price. Good advice if you can find such a property.

2. Start to go into business at an age as young as possible. No idea if this is good advice or not.

3. Don't become emotionally attached to the business. If it doesn't work, change your line of work. -makes a lot of sense

4. Competition is healthy. Yes, you can learn from your competitors. Just don't take too much personally.

5. Don't stick with just one business, lest you become a slave to it. Again, seems like very good advice. I do diversify into more than just bookselling, but that's partly because I have to!

6 If hiring workers, better to hire Chinese people. This point could inflame some people, I suspect. If hiring directly I personally would go for bi-lingual staff, because that's what my business needs.

7 Never ask the bank for a loan. Better to ask friends or family, in order to avoid paying interest. I think most of us can understand where this is coming from...

8 When your sector becomes saturated, look for another. Seek out new business opportunities. Sound advice, I would have thought, and something I'm always looking into...

9 Give your customer what they need, even if you don't understand why. Basically listen to what your customer wants - it can lead to a new revenue stream.

10 Work and hoard money for several years even if it means living a pauper's life. This is probably the main area I fail. I have to keep networking with certain people here in Madrid, and if I lived a hermit's existence I would have missed out already on certain opportunities. I prefer the slogan "moderation in all things" not that I achieve that either!

The summary is that I have a lot to learn from Chinese business practices, even if I feel that one or two of the "commandments" don't apply to my bookstore. And if the sale of the Edificio España goes ahead, I expect to see this part of Madrid change a lot.

7 things I do in Spain that I wouldn't do in England.

There are certain things I've ended up doing here in Madrid, Spain, that I wouldn't do back in England. As always, this is not a comprehensive list, just those things my decaying mind can remember at this point in time...

1. Take a morning coffee in a local bar on the way to work (often with toast or churros). This is partly to get my brain listening to Spanish (apart from the bar talk the television will broadcast the news). But also because it's inexpensive here - 2 euros will cover coffee and the breakfast item. I really couldn't afford to do this back home.

2. Tip beggars with 20 or 25 cents. Firstly, because I'd probably get insulted if I gave such small amounts in the UK. Secondly because I always feel that the UK benefits system is meant to be more comprehensive, so there is less excuse for people to fall through the net. I have to admit though, I'm beginning to wonder if I'm totally mistaken on this.

3. Drink a small beer (known as a caña). It's perfectly acceptable to have a small beer here - and you still generally receive a free snack with it. The atmosphere in British pubs is such that I actually feel uncomfortable if I have just a half pint.

4. Throw used napkins or chicken legs on the floor once used up.

5. The two kisses thing when being introduced to Spanish women. Although it's something I'm still uncomfortable with. Likewise the affectionate embrace with male friends. These people are way too tactile!

6. Stand talking to someone who's only 4 inches from your face. People here are far more comfortable standing close to each other, than we are in England.

7. Advertise my services (in my case the bookshop and English lessons) on lamp-posts! Even in the internet age it's still the case here that the best way to advertise directly is via flyers on street furniture. Part of the reason is that you get a lot of sunny days and so the advert isn't washed away so quickly. It's still a surprise to see someone advertising their 400k house in this way though.

Giving a little bit extra in Spain

I've thought for some time now, that the Spanish tourist authorities should use the strapline "Spain - where we like to give you a little extra". It could be the free snack or tapa with your drink, or the wrapping service that comes when you buy a gift, as many service businesses in Spain like to compete by offering a little extra.
It's something that I think about all the time, as regards persuading people to come into the bookstore, rather than just ordering books online (we also sell via Amazon marketplace). We've had a free Mince Pie promotion before Christmas, and also free posters.
Currently we give away free book bags (some of which are from Daunt Books in London) when people spend 10 euros or more in the shop. So far the reaction has been very good when this has happened, and customers have promised to come back to the store. Whether they do or not obviously remains to be seen.
I intend to have a new promotion later this week, that will stagger other bookshops in this city. I can't release more information at this point (as competitors may try and jump in and spoil the promotion, or the co-operating party pulls out) but it will be available to anyone buying books in the store, even the 1 euro bargain books. Watch this space!

14 signs that indicate you are now living in 2014.

Right, this entry is not specific to bookshop owners, nor to anyone living in Madrid, but it may seem very familiar to some readers.
Some signs that highlight you are now living in 2014.

1. You know someone who's just on the edge of making it big with their start-up. But they never quite get that important traction...

2. Despite many people having it tough/losing their job, fancy cake and pastry shops are opening up everywhere.

3. We're constantly told it's good to fail. Just as well then...

4. You're annoyed about all the propaganda about Bitcoin. Let us work out how to cope with real money first...

5. The journey to the airport often costs more than the flight itself.

6. No-one pretends to have a "proper job" anymore.

7. You have given up trying to get Stephen Fry (or some other celebrity) to notice you on Twitter.

8. You sometimes glance at a newspaper article on the web, but you don't know anyone who buys a paper copy anymore. Unless they are going on holiday. There you go, newspaper publishers - if we get more holidays, you sell more papers!

9. If you do know someone in a job, it's in a role that didn't exist a few years back eg Cloud Services manager, Imagineer, UX designer etc.

10. Still no hoverpacks

11. We all secretly hope someone like Sherlock Holmes or Doctor Who exists, so they can sort out the mess we create.

12. Rail travel is getting ever more faster. Air travel not so, especially with the demise of Concorde.

13. They still haven't cracked self service tills in supermarkets and you prefer to be dealt with by an attendant.

14. The media appear to have stopped worrying about Peak Oil. But Climate Change (nee Climate Warming) is as big as ever.

Shops going up, or going down...

Although the bookshop has only been going since the autumn, I personally have gotten to know Madrid on and off for over 20 years.
The other day I realised that I didn't know where the nearest copy shop was. I'm sure a few still exist, but I suspect most have been rendered obsolete by the availability of cheap printers and (more recently) the ability of smart phones and tablets to take photographs.
At a later point I intend to write an article listing the shops that have disappeared and those that have taken their place. Today however I will produce a quick "Going Up" and "Going Down" summary of shops in Madrid.

Going UP:
Fancy baking shops selling cup cakes or tarts - these shops are mushrooming everywhere (forgive the pun)
"GrowShops" - I'm not really sure how these places are legal, if indeed they are.
Gifts and ornaments for pets - It seems there are pet lovers here, despite Spain's reputation.
Retro and second-hand clothing shops - No-one likes the term second-hand though.
Ham products - Seriously, there are shops selling ham rolls, ham pies etc. Not sure how they can compete with the bars who serve the same thing...

Going DOWN:
Internet shops/cafes - Since so many places offer free wi-fi, not much custom left for the dedicated internet cafe, although they still exist.
Book shops - Yes we're under threat, please support your local independent bookstore! But there have been new bookstores open in Madrid, and according to this article bookreading is experiencing a revival in Spain.
Copy shops - these were once huge in Madrid.
Travel shops - Yes, our young friend the internet...
Newspaper kiosks/shops - And again the web effect. Not that all have closed, but I do wonder how the existing ones keep going. I'm sure I've missed something here, so will no doubt come and edit accordingly. Meanwhile please look at the picture below of books...don't let them die out! ;)

The curious case of the disappearing cats

A few months ago, a cat disappeared from another second-hand English bookshop in Madrid (the store in question Petras, is only 5 minutes from OffSide).
This case was discussed on the MadridMan forum here, but no conclusion was ever made, and the cat was not re-found.
At the time I thought this may have been a kidnapping carried out by someone with a grudge. But now it transpires that another cat in the neighbourhood has also gone missing. The owners have put up a poster asking for help in retrieving the cat.
In both cases the cats were normal tabby cats.
Why would anyone go around stealing tabby cats?

14 things I have learnt so far from opening a bookshop in Spain.

The idea for this entry came from this article, that published such gems as

Most people think every old book is worth a lot of money. The same is true of signed copies and 1st editions. There's no need to tell them they're probably not ensuring financial security for their grandkids with that signed Patricia Cornwell they have at home.

So, although I'm only a few months into running my Madrid bookshop, here are some interesting findings that I've uncovered:

1. The books that sell the best are neither one euro second hand books, nor the glossy new books. Good quality mid-range second hand books (particularly coffee table books) attract people's attention.
2. A lot of people you know who stress they'll pop in your shop one day, never do. Luckily many who never promise to do so, do actually turn up.
3. It's sometimes worth buying books from people who are moving away. But only buy a small amount and then point out you can't afford any more. Often the seller will then give you the rest of the books to get rid of them.
4. If you start selling books online, you will have to check your listings every day. Big operators with 2 million+ listings (whether they actually possess that many is debateable) will attack you with the "penny-undercut" almost straight away. They probably use computer programs to do this, so don't take it personally!
5. Keep asking local business people for advice and feedback. But don't assume their advice will always be appropriate, even though 70% will be of top quality. For instance, I was advised by a top business guru here to write a blog - the one you're reading now. It's been great for publicity.
6. Selling books in the store will not pay the bills by itself. You need to either run a bar, sell books via the web, host events or fit in extra work eg teaching English or editing documents. Or all of those!
7. There will be good days (normally events) when you can have sales of several hundred euros. Other days you will sell nothing in the shop. Those unfortunately are more frequent. Budget accordingly.
8. It can be fairly cold in winter even in Spain. This is not helped by long periods of remaining seated. Warm clothing and regular exercise are needed.
9. The Spanish seem to respect books more than the Brits - their second hand books are normally in far better condition. You see plenty of book readers on the Madrid Metro still, which is an encouraging sign.
10. You need some great friends and family to give you support and help in sourcing books etc.
11. Unless you hire staff you will need to follow the Spanish tradition of closing for a couple of hours in the afternoon. Not just so you can have a decent meal and relax - you may need to go on shopping or fact-finding missions.
12. Keep active on both Twitter and Facebook. I've found them very useful in making contacts and publicising the bookshop.
13. You will never have time to read books in the bookshop itself. So probably a good idea to keep some books at home.
14. Always check through pages of books that are offered for sale or donated. One book turned up with pot plant leaves inside - and although I've yet to find a bank note, I'm assured it will happen eventually! ;)

Autonomo fees - An unpopular view

It's rare to read a guiri/expat blog about working in Spain, without the invariable whinge about the autonomo costs that self-employed people have to pay. Often the cost (close to 300 euros monthly) is compared to the low cost of national insurance contributions required by the self-employed in say the UK. It's also portrayed as being unfair because people have to pay the full whack whether they are making a profit or not, and regardless of monthly fluctuations.
I'm one of the few (perhaps the only one?) who thinks these complaints are misplaced, and that in fact there are far more important things in Spain that need to be addressed to help foster the growth in self-employed businesses.
Firstly, there are schemes that now allow a new autonomo to start off on a reduced rate - and the government is apparently bringing in further measures to help new businesses.
Secondly, the autonomo fee can be written off as an expense against revenue, thus reducing the total tax due to be paid.
Lastly, and the British critics always omit this point, you will save a lot more money (if you rent business premises, for example a shop or offices) compared to the UK in terms of commercial rent and especially business rates.
Now I realise that the last point only applies to those who rent business property. Those who don't, for example English teachers or freelance programmers, don't make that saving - or perhaps I should describe it as "not having to fork out on business rent each month". And perhaps more importantly, many starting out may choose to work black if they don't need premises, as they wait until they achieve a reasonable turnover, although that's obviously not a course of action that I can endorse.
Nevertheless, I feel that the real barriers to making a success of a business here are the high levels of VAT/IVA (21% in many cases) and a somewhat depressed internal market. Of course some businesses are not affected by this - books carry a IVA rate of just 4% and the teaching game can get away with 0%. The internal economy may not matter too much to an estate agent whose main clients come from overseas. From my point of view the autonomo system as it stands is bottom of the list of things I'd change to help businesses in this country.

Giving something back

One thing that concerns me in today's society is that there is very little chance of people "left behind" getting back into regular employment. I saw this a lot in the UK, with the rise of food banks and the like, and indeed one reason I've embarked on the bookshop business is because I found myself with very little option of finding work. It's no better in Spain, and despite the packed bars and busy shopping streets in Madrid, there are large numbers of people who have been left behind with no realistic chance of getting work.
One group that has been set up to try and help the jobless and/or homeless is called ServeTheCity. It basically looks for people working/living in Madrid to use their free time to help those less fortunate than themselves. I cannot guarantee that my own business can survive the coming months or years - although I am exploring every avenue to encourage people to use my bookshop. Nevertheless, so long as the Blogger service is up and this blog is running, (hopefully) people will read this entry, and if they are based in Madrid and have some free time to give, they can give something back to the city. Please share the site for ServeTheCity with anyone you know who lives/works in Madrid.

Serve the City is a movement of volunteers serving cities in practical ways & inspiring people to be “givers” in this world. We believe that many people doing small things together can make a big difference in our world. With this initiative we want to show that we believe in making Madrid a better place to live!