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Updated: 26-12-2009

How to Choose Your Ideal Type of Business

My own business in Tenerife... For many of us it is still a dream, for others – the dream has become reality. The reality, there have been many success stories written, but at the same time there have been quite a few disappointments and ruined dreams. Running a successful business in Tenerife is the same as in any other place or country – it requires thorough preparation, lots of hard work, enthusiasm and a high level of commitment.
Once you have decided to go into business in Tenerife for yourself, you have already taken the first big step. There are lots of different Tenerife businesses for sale, but before you rush into something which looks very tempting, there’s a lot to consider. Making the right choice of a business that will match your personal needs, capabilities and future aims is the most important first step on your way to success. There are various factors to think of, so let us give you a few tips to help you head down the right path when buying your Tenerife business.

Define your Personal Match

  • Follow your passion! If you choose a business that you love doing, you are more likely to become successful and get true satisfaction from it, even if you are working very long hours, which is not unusual once you become your own boss. Someone once said “Do what you love and the money will follow”, simple, but very effective advice.
  • Apply your Skills! Build your business around your true talents, skills and knowledge. Even if you start in a completely new industry for you, make sure it matches your skills and talents and work hard at acquiring your missing knowledge. For example if your choice is to run a bar in Tenerife and you’ve never run one before , get yourself and your partners onto a quality recognised course and learn the profession from experienced professionals.
  • Consider your Lifestyle needs! For instance if you like to be flexible in your working hours, or prefer to have your evenings and weekends free then opening a bar or a restaurant might not be the best choice for you.

Analyze the market
Carry out research to define what is missing in the current market place and if there is a demand for your Tenerife business product or service idea.

  • Understand who your Customers are and what their true needs are. Listen to what people are saying about different Tenerife businesses and especially focus on the parts which are criticised. This will show you the current gaps which you may be able to fill with your own Tenerife business proposition.
  • Closely observe your Competitors – in the small market place of Tenerife there will be enough of them! Try to define the strengths and weaknesses of your competitors, as well as the main challenges they are facing – those challenges could become yours if you don’t prepare correctly.

Build your Value Proposition
Now, once you understand the Tenerife business market is the time to define your place in it. To be successful in the highly competitive market in Tenerife it’s essential to do something that makes you stand out from the rest. Build your solution to fill the missing gaps that Customers want, but that your Competitors struggle with or are not able to provide. Be innovative! If you buy an established Tenerife business you will get a solid base from which you can more easily develop a leading edge by bringing in your personal touch.

Consider your Operational model
Check to see if the local market can supply you with the products, services and knowledge which you need for your business to be successful in Tenerife. Think of the necessary resources and the level of competence required. Consider how your organisation should appear and what your role in it is. All these factors may affect your budgeting requirements and therefore it’s important to take them into account. Again, if you buy an existing Tenerife business, you acquire a ready solution, proven by the previous years of operations, which makes it easier for your start.

Plan your Finance
One of the biggest mistakes many people make is to spend all available funds on purchasing their business in Tenerife. Do remember that on top of the purchase price you will need additional funds for legal fees, rental deposit (in the case of a leasehold business), taxes (in the case of freehold businesses), license transfers, stock, as well as funds to support your business operations and to cover your private costs during the transition period and the first several months of trading. Even when buying an established Tenerife business you will need a certain amount of time to find your way in it, during which the business might operate at a low net profit or even a loss. Carefully consider these points in your overall business plan and when defining your maximum budget for purchasing an existing Tenerife business. The biggest reason for business failure anywhere in the world is lack of capitalisation, there must be a contingency fund set aside for unexpected costs.

Once the above is defined you are more likely to find the perfect business match for you and therefore will have a much higher chance of success in the Tenerife business world. If you need help in planning any of above steps, contact us at FRINA Tenerife for professional support and advice, as well as for initiating a customized search of your ideal Tenerife business.

By Irina Saltmarsh

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