If you want to start your own business in Spain you will need to create a business plan. And that is a fundamental and key document, as it is something that the administration carefully analyses before deciding whether or not to grant you a work permit. Therefore, in this article we will give you all the advice you need about the business plan for your immigration application. From what it is and how it is written to what exactly you should include.
What is a business plan?
As an entrepreneur or individual who wants to start his own business, ideas are not enough. You need something else to anchor that group of wandering thoughts. Hence, a business plan is the document that helps you put that business idea on paper so that it comes a little closer to a workable reality.
In other words, beyond being a document, it is a very useful tool to organize your business idea through the different parts or fundamental pillars that are required for it to be successful.
Although it is true that there are many types of plans, those needed to formalize your immigration application in Spain are not very complex.
That is, you won’t need a technical business plan to get your work permit, although perhaps in order to succeed with your business project it may be a good idea to design a more advanced document.
That is why we recommend that you read this article carefully first to know exactly what you should include, and then assess whether to take it further and make it more complete.
Which immigration procedures or permits in Spain require a business plan?
As you already know, it is an essential requirement to present a business plan when applying for any kind of work residency in the Spanish territory to develop your own business activity.
Thus, and more precisely, the immigration procedures that require one are:
- The entrepreneur’s visa
- Self-employed work permit (application from your home country)
- Residency modification from residence authorization to initial work and residence authorization
- Modification of stay for study purposes to work permit as a self-employed individual
- Residence permit to find a job and to then start your business activity
- Modification from non-profit residence to initial residence as a self-employed
In general terms, they all require a similar structure with common elements, as we will see below. However, it will be in the first case (entrepreneur visa) where this document becomes even more important and requires you to include extra sections.
What should it include? Key elements
What’s next is a list of sections and specific elements that you must include in your business plan in order to successfully obtain your residence permit.
Overall, you will have to prepare a business profile, gathering all your relevant personal documents with which you try to convince the public administration that your business is attractive to the country; therefore requiring that you are granted a work permit so that you can develop it in Spain.
Let’s see what those key points are in greater detail.
Characteristics of the business project
You can view this section as a small introduction to your business idea.
Basically, you will need exactly define what the business is about, how the services will be provided or the product sold, personal motivations for undertaking this venture, etc.
That is, an overview of what, how, and why.
Just in case you are a bit lost here, you can access our article with 25 business ideas you can start today in Spain.
People in charge of the project (team)
Here you should talk about who will be in charge of the business, whether that is you as an individual entrepreneur (alone), or the other founding partners if you will set up the company jointly with someone else.
Who will develop the activity? Which tasks and responsibilities will everyone have?
Academic background
This section aims to demonstrate that the founders or the individual in charge of the project have the necessary qualifications and experience to successfully take the project forward and thrive with it.
You should talk about your professional career and attach your CV (both yours and the one from your business partners if there are any), in which you highlight the experience or academic training related to the business you intend to develop in Spain.
But what do you do if you do not have sufficient experience and academic qualifications to validate that you are capable of successfully undertaking such a business? We propose 3 solutions, because if that is the case, your application will probably get rejected:
1. Look for experienced partners. If you had the idea to start a business individually but you lack the necessary knowledge, it would be a very good option to look for another partner who does have that know-how.
2. Do related training, like enrolling in a master’s degree.
3. Mold and change the business idea by iterating to your field of knowledge (there where you have experience).
Analysis of the product or service
The next step is to perform an in-depth analysis of the products or services you will bring to the market as a self-employed worker.
This also includes who the end consumer is and the characteristics of the value proposition you provide to them through your offer.
Execution and logistics
How will you carry out your business idea on a day-to-day basis? What are the internal processes and operations necessary to function normally? This is what you need to answer throughout this section.
You must detail, for example, if you will have an office or operate from home, if you will rent a local and if you need a license for it, how you will ship your products to the customer in case you sell online, how you will get in touch with your customers, etc.
Market analysis
There is no point in marketing a new product or service without a little context.
Here you must identify the main competitors and carry out an analysis of the specific geographical area in which the services will be offered, pointing out possible opportunities and how your business fits into the current market trends.
Commercial plan
Basically here you must answer the question: how will you do it to attract demand and market your products?
The answer, therefore, includes your marketing and sales strategy. This can include the use of search engine optimization (SEO), social networks, affiliate programs, etc. Whatever your use for attracting customers should be detailed.
If you need to subcontract or hire professionals to develop, for example, your brand image, you would include that here as well.
Business structure
How will the company be organized? Which would be the company type? Will anyone else besides you work there? What exactly will each of these workers do? This is what’s known as an organization chart, and you should create your own one.
Initial investment
Any business needs a minimum of initial capital to finance its first fixed and operational costs. How much will it be in your case? Under what concepts?
In this section you must define the capital you will need, as a minimum, to get the business up and running in the first place.
In other words, demonstrate to the administration that you have sufficient materials or equipment to start the business. We recommend that you keep the expense invoices of any equipment you have purchased that is somehow related to your business. We are talking about mobile phones, laptops, etc.
(Planned) Financing
What will be your external channels of funding? If you are going to ask for a loan, you will need to detail the amount and the entity that will grant it to you.
Forecasted business results and profitability
This is undoubtedly one of the most important sections, as it will be used largely to determine the viability of the proposed business.
You should include a 3-year projection of the expected economic results (income and expenses).
Try not to underestimate the costs you expect to have or to establish unrealistic income levels, especially because during the first year that is something complex to achieve.
Annexes
Finally, the last section. In the annexes, you must include all the documents that you have mentioned and that validate and verify each previous point. We are talking about binding documents such as:
- CV
- Copy of your academic titles
- Copy of the rental agreement in case you have one for your activity
- Copy of your company’s public deed in case you are an S.L.
- Registration as a self-employed person if applicable
- Bank certificate with the investment required to start an activity
- Etc.
Business Plan for the Entrepreneur’s Visa
We have created a specific section for this type of business plan because it has certain peculiarities.
The business plan for the entrepreneur visa requires extra and additional sections to those discussed so far (which work well for a general business idea under a self-employment permit). The entrepreneur business plan requires certain questions to be answered and proven with attached documentation.
While, in the previous case, any business idea (broadly speaking) would work, in this case, it must be justified as highly innovative with a high degree of technology in its operations.
Furthermore, there are two main sections: innovation and scalability. Keep reading to find out what these sections entail.
Innovation
For the “Innovative” section of the entrepreneur business plan, you must first see if your business checks out any of these five points:
- You have received financial support or government help for your research or innovative projects in the past 3 years. If you took a loan, make sure you have a signed contract
- You’ve either won or come close to winning an award for your startup on a local level
- There is an existing detailed report from the Ministry of Science and Innovation that supports your case, from within the last 3 years
- You’ve received Social Security bonuses for your research team in the past year
- You have the Small and Medium-sized Enterprise (SME) Innovative Seal or the Young Innovative Company certification from AENOR
If your business idea does not check any of these things, then you need to prove innovation through one or more of the following criteria with necessary documents:
Development or use of patents
Patents that are at least requested will be considered. Those that are owned by the company or that the company has the right to use and/or capacity to develop will also be considered. Keep in mind that patents must be directly linked to business development.
Use of proprietary technology
Expenses related to research, development, and technological innovation will be considered when looking at a company’s total spending over the past two years, or just the past year if the company is less than two years old.
Differentiation in the company’s processes
Putting in place a better way of making or delivering things in a specific area or industry. This often means making big changes in how you do things, like using new tools or software. It can also mean making smaller improvements that help you produce more or provide better services.
Differentiation of the product or services
Bringing new or much better products or services to a certain area or industry. This could mean changing important technical stuff like what it’s made of or adding new software features.
Differentiation in the business model
A marketing plan that aims to show why your product is special and different in the market, giving you a significant edge over your competitors in a specific area or industry.
Scalability
The next main section would be “Scalability.” This section should elaborate on the demand of your product, how it’s affected by economic ups and downs, how hard it is for new suppliers to join the market, how many competitors are out there, and other things that will help authorities determine if the market is a good place for your company.
These are measured by the company’s profitability, as it allows for greater tax levies through the payment of corporate tax. This is why the section on projected income and expenditures will be so important.
For the first area of the “Scalability” section, degree of market attractiveness, you will have to expound on four important points:
- Analysis of Product or Service Demand: Identification of market potential, meaning if people really want your product and if it could do well in the market
- Existing Barriers to Entry: Identification of what’s stopping new companies from entering the market, such as tech challenges, loyal customers to other products, rules, patents, or high starting costs
- Level of Competition: Explanation of how many other companies are in the market you want to get into
- Scalability of its products or services: Justification of how your company can grow exponentially without needing to spend way more resources
In the second area, the company’s life stage, you will need to expound on the status of the company’s products and services.
Moreover, if you have started marketing your products and/or services, you will have to fill out a table including: the name of product or service, the commercialization start date, and a description.
In the third area, the business model, you will have to elaborate on:
- Description of the company’s activity: Include a description of your products or services and the revenue model (how they are materialized
- Company background: A brief history of the company since its incorporation, detailing the main milestones and important changes
- Objective of the investment: Explanation of the company’s financial needs, how much it will cost, how you’ll get that money, how many jobs it will create, and when you plan to start and finish the project
- Detail of the foreseen investments: A break down your budget for buying things such as equipment and software. Mention how much goes to running the business day-to-day and how much goes to other expenses
- Qualification of planned investments: An outline of how much money you plan to invest over the next 18-24 months. This should match what you mentioned earlier. Also describe where the money is coming from for your company in the next 18-24 months. Explain if partners will put in more money or if your business will generate enough cash
In the fourth area, competition, you need to outline the advantages and disadvantages of competing companies with respect to the company, their strengths and weaknesses and the characteristics of their products and services compared to those of the company.
You will need to indicate: the name of direct competitor(s), estimated market share(s), and differences from your company.
In the fifth area, the management team, you will need to demonstrate that your team has valid and valuable experience in their positions and responsibilities.
You will also need to describe what kind of staff you will hire in the future. In the sixth area, partners and shareholders, you need to talk about the founding partners’ years of experience in other companies, and what future partners and shareholders would like.
Lastly, you will also have to expound on your suppliers.
How to include it in your immigration application
As we have mentioned, in your application for the entrepreneur’s visa or work permit you must attach the business plan, and it is a fundamental requirement.
But how to do it exactly?
First of all, once it has been drawn up, you must send it to any of the associations registered and operative for these purposes, such as the ATA (Asociación de Trabajadores Autónomos, so that they can certify the viability of the project.
The rest of the associations you can reach out to are:
- Unión de Profesionales y Trabajadores Autónomos (UPTA)
- Confederación Intersectorial de Autónomos del Estado Español (CIAE)
- Organización de Profesionales y Autónomos (OPA)
- Unión de Asociaciones de Trabajadores Autónomos y Emprendedores (UATAE)
These institutions assess the viability of the project, taking into account the market and competitors, the financial projection, your ability according to your experience and knowledge, and other economic factors.
In short, they will assess the profitability of the business over the long run.
If they give their green light and approve the viability of the project, they will issue a document of acceptance, which you must present at the immigration office.
Business plan creation help
So far we have seen all the most important elements and considerations when preparing this document.
However, given its crucial relevancy in your application for a residence permit, crafting it fastly and with a generic tone is not an option.
That is why our recommendation is that you let an expert help you create it.
At Balcells Group we have a department of economists specialized in business plan creation. Our lawyers, who have helped hundreds of clients in the same situation, know exactly what to include and how to do it to create a successful plan.
Hence, you just need to contact us, briefly describe what your business idea is about, and we will take care of the rest:
Book a consultation with one of our lawyers and solve all your doubts:
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