Opening bar/café in Madrid. Ideas?

Hi, all -
I'm moving to Madrid in August to set-up an 'international' cafe/bar. Based on my experiences living in London, New York and Italy, the bar/cafe (not clubs) experience in Madrid are often standard fare. What do you think?

When I suggest a lounge cafe open all day and early evening (pre-club or dinner), what you would expect to see?

Does the idea of an international way-station appeal? How about laptop access, exhibitions, organic foods, international loungers and local info?

I'd be interested in your thoughts, opinions and recommendations. Is there a particular location you think is worth seeing, another bar/cafe I should check out or just an idea you want to share?

Thanks in advance and email me if you wish.

Matt

[ 05-03-2001: Message edited by: MadridMan ]

I seem to recall someone last year asking us our opinions of opening an American theme restaurant/cafe in Madrid and we all had some pretty good opinions. Not sure what happened with that person or his idea.

MM, that person was probably me... I am still working on the paperwork and research a site for my bar/internet cafe... I have made three trips to Spain in the last year and will be going again 23may01 for 15 days... there are so many businesses of this type that one needs to be sure that the business does not need to provide any measureable profits for the first year or so... most of these business are ran by underpaid family members or young people trying to hang on in the country without committing to any career or plan for the future... the paper work for a U.S. citizen(me) is substantial, as well as the financial requirements for me are very different that those for a EU resident... I think it will take me at least another 12-16 months of "negotiating and paperwork" to open my business... however, the trips have been great and I am going to open the business almost exactly where I first thought, even though locals want me to open in a small neighborhood... sorry, you need substantial foot-traffic for these businesses to be successful...

let loose london-
Good luck on your venture. I lived in Madrid for a year and my advice for you is to be careful depending on foreigners to support your business. While I personally would enjoy organic food, smoothies, etc., the Spaniards seem to favor meat, seafood, and anything fried. Obviously I'm generalizing a bit, but the popularity of Museo de Jamon will attest to the Spaniards affinity for the less healthy fare.
Internet access is a great idea. Lots of Internet cafes have sprung up in Madrid, but when I was there in October, they were always packed, so it seems like that service is in high demand.
There is an Internet cafe/bar in the Fuencarral mall that you should check out. I don't know the name, but it is on Calle Fuencarral, on the bottom floor of the mall. They serve beer, teas, natural fruit drinks, and have about 4 glass tables with the computer monitors under the glass. They also have a few tables and couches. If you buy a drink, they let you use the Internet for free. The people who work there aren't very friendly, but it might give you some ideas.
Good luck, and let me know if you end up going for it (I'll be moving back to Madrid next March.)
Cheers,
Carleen

I just found the address for the Cyber Cafe I mentioned in my last post. It is located in the Mercado Fuencarral, Calle Fuencarral, 45
28004 Madrid. The closest metro stop is Tribunal.
Hope that helps!

Thanks for the response! It's great to see a messageboard populated...

The idea is due to hit the investors late this month and I take on board the competative aspects and cultural imperatives (suckling pig smoothie anyone?).

The Madrid bar is only one revenue stream and concept that I expect will work with good management - I'm still searching for that perfect location though, J!

Let Loose London,

Although I like your enthusiasm, I didn't hear anything about a written business plan, marketing research, or any of the intangible/tangibles that investors need to look at before they will even consider looking further into the offering, before writing out a check.

As an investor, I have researched business opportunities in Spain, and found that about 90% of the businesses similar to what you are suggesting fail within three years. That means the investment falls into what is considered a "high risk" category. This includes "Mom & Pop" operations where members of the family work out, so they don't even need the income to survive.

The bottom line is this. Even with a substantial investment, your odds of surviving for ten years is actually less than 5%. Investors must get an attractive ROI, and will probably expect buyouts in specified amounts, within specified time frames.

Anyway... that's how I see it. Just an investors point of view.

Good luck! Hope your plan works.

Wolf

Too true, Wolf -

There is indeed writing and research of a business plan underway - you might say that the message board is a great way to converse, rather than pitch.

The venture is expected to provide a resale opportunity within 12 - 18 months. We're not talking about significant figures here, although the ROI should be a healthy percentage.

My reasons for striking ahead with this are as an alternative to developing business opportunities for the big blue-chips of the world, even though they pay well I may not be dealing with a million dollars this time, but the lifestyle choice is increasingly important.

Would you be available for a phone chat or a few email exchanges? Your experience and views could be very welcome.

Reagrds, Matt

I think there might be more of a market for healthy foods than you think. If nothing else, all the Americans are guaranteed to come to a cafe like that, and you never know -- if it starts to look like a place to be, natives might come too. Despite the amazing Spanish food, every once in a while in Salamanca I would crave an American style turkey sandwich on wheat, or a bagel with cream cheese -- I know I wasn't the only one! Bagels would be a good thing to sell, as far as I know they are not available anywhere in Spain right now. Study abroad students would really welcome a cafe that reminds them of home.

Some ideas: If you want to attract foreign students, open in Madrid city. If you want to attract expats and their Spanish friends with more money, look at Pozuelo de Alarcon, just west of the city. There are some fantastic areas there with great restaurants and bars, and loads of business. My gut feeling about American food is to not bother, unless it's just a small part of the menu. I know a woman who baked delicious brownies, muffins, bagels, cheescake, etc. and opened a shop in Pozuelo, but, at least 5 years ago, the clients were Americans, and not too many Spaniards. I would think you'd want more business than that. I like the lounge cafe idea, but I don't think you'd do much business before 1:00pm, and it may not really pick up till the evening and on weekends. So I don't know if the open all day idea would fly. That set-up may actually work better in the city than in Pozuelo because you could get tourists who want a break from sight-seeing. So much for my thoughts. Good luck!

Hi Let Loose London,

I strongly second the opinion of Wolfgang.
Just as an example ,I have raised money for several ventures,from private sources,venture capitalists,even some public money,here in states as well as in EU countries,and and can tell you that well prepared busines plan is a must.Include at least 2 years cash flow projections,5 years proforma projection (europeans like pro forma as opposed to cashflow)and vision for expansion,or proper exit oppurtunities for investors,like Wolfgang mentioned.
European investors part with their money easier once they understand your vision,(and think its good),americans are harder to convince ,but have more dollars and a lot more to offer in terms of management skills,pr- or marketing experience,and once on board ,are easier to deal with. Most of the time US investors are tough but fair.Lastly,do not accept any offers for investment without consulting with,prefarably,a very good lawyer.
Actually one more thing. Think carefully what you are about to propose to investors,because if you are succesful in raising funds,you are going to have to
live with this deal . Make sure you are happy with it!!

Good luck,
Zzeus11

again, many thanks for the advice and encouragement!

I will have had some positive interest from UK investors who are looking for a venture that won't cost them the earth. The properties in Madrid I have veiwed are suitable and by UK/ US city standards - cheap.

I'll keep you all informed as to the progress - as I've been approached by the BBC (ex-employee) for a little documentary around the venture, It will hopefully be entertaining too!

Regards, Matt

Hi Let Loose. Well, I see that you have had loads of responses but nobody to suggest a "Local" (storefront) so here goes. I live here in Madrid as of almost 5 yrs ago and about 5 months ago, I saw a rather large place go up for rent/sale. It is on the Calle Segovia just south of the Plaza Mayor, on the corner of the Plaza de Puertacerrada and Calle Segovia. It goes right through form the Calle Segovia to the Calle Sacramento. It has not been snatched up so I assume they are asking an arme and a leg but ya never know. That area is hopppin at nigh (both Spaniards and Foreigners alike). Anyway, if you want me to get the phone #, just e-mail me and I will pass by for I live in the Plaza Mayor and it is a stones throw from here. Also, whatever you end up opening, keep in touch, I have some connections here that could help you out in the Marketing area.