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What are the challenges of doing business on the Costa del Sol?

What are the challenges of doing business on the Costa del Sol?

We love the Costa del Sol and have happily lived and run a business here for more than a decade. However there’s no getting away from the fact that there are some specific challenges for doing business here. In order to be successful you need to recognise that the Costa del Sol is a very fractured place with a long stretch of coast and very distinct zones, a real mix of nationalities with many languages and demographics. If you can learn to live with this, find a niche and market your business in an intelligent way,  it can be highly rewarding and a wonderful place to live and work.

Let’s honestly look at the weaknesses of the Costa del Sol for businesses so we can work out how to overcome them and succeed.

  • Fragmentation – Nationalities, languages & media
  • Seasonality & fluctuation in visitors
  • Non-registered expats which gives uncertainty in figures
  • A lot of competition for each Euro
  • Low spending power of the majority of the residents and just a small proportion of rich people
  • Lack of trust and openness to new businesses

How can we overcome the difficulties?

  1. Understand them, but also do your research and identify the size of the market for you
  2. Focus on who is your ideal customer – you shouldn’t be trying to market to everyone
  3. Don’t forget the Spanish – 87% of residents here are Spanish, yet too few expat businesses think about them
  4. Test the media and the market groups and see the response to your offer, changing the media as well as the message as you go to find the group that best responds to your message
  5. Compensate for seasonality by being creative and flexible with staffing. Plus don’t forget the residents
  6. Implement smart pricing structure to appeal to all pockets to keep your options open – can you create low, medium and top options?
  7. Know your competition inside and out and decide how to beat them, or where to collaborate
  8. Don’t assume an idea which has worked well in other countries will work here, it’s a very different place
  9. Build trust and be visible – network online and offline, show your credentials, offer things to inspire trust such as refunds or guarantees
  10. Plan for the long term – things take a long time to get established here, so don’t burn through your budget in just a few months. Think about investment having to last you through the slow seasons at the very least, and budget for a year low income to be on the safe side.

Best of luck building and marketing your business on the Costa del Sol. We have been here since 2008 helping businesses of all types to market themselves and offer consultations and marketing strategy and planning as well as marketing and PR services, if there’s anything that we can help you with please let us know.

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