Alejandro Suárez: "90% of SMEs go bankrupt in their first three years of life"

His businesses are developed around the Internet and New Technologies, although he is also a private investor in the Biotechnology and Media sector. Without a doubt, Alejandro Suárez Sanchez-Ocaña is an entrepreneur by birth. On January 12, he launched his latest book It’s time to start your business, in which he encourages entrepreneurs not to throw in the towel and explains the keys to start a business, but, above all, focuses on laying the foundations to consolidate the existing one.

The latest study conducted by Ocio Networks, and in which you collaborate, reveals that 62.3% of Catalans would choose to start their own company, but only 27.6% would know how to do it without outside help. What is failing?
The truth is that this does not only happen in Catalonia. They are data very similar to those of the rest of Spain. And, in general, there is a very serious information problem. The administration does not communicate well with citizens. Everything that is not behind a large advertising campaign does not reach society.

Why this misinformation?
A few years ago there was no interest in encouraging the creation of new companies. Now, it seems that they want to promote it very quickly without thinking about the survival of the company. From public institutions want to transfer the entrepreneurial spirit to society, but there is a lack of entrepreneurial culture in our country. People do not dare to start their own business. There is no model to follow. There are not several generations of entrepreneurs as a model, generations that have done well.

Another striking fact of the study is that 42.4% of respondents do not know that there is a single payment option for unemployment benefit, a fact that can facilitate entrepreneurship with a business …
It is understandable that generic information on how to start a business does not reach everyone. But what has no pardon is that the unemployed are not informed that there are other options besides going to collect the unemployment check every month. But this is not the only example. The operation of the single window is also unknown to the citizen …

The one-stop shop was born to create companies. It is a comfortable system, almost immediate, and less expensive. You can save yourself going to the notary, to the registry … it facilitates that you carry out the procedures by the Internet. The majority of entrepreneurs do not know about it and continue to create old-style businesses. And taking into account that Spain is one of the OECD countries where it takes longer to create a company (46 days compared to 13 days for the rest of European countries that make up the OECD). This one-stop system can save us a lot of time. The service exists and works, but nobody knows it. Only 0.2% of entrepreneurs use it.

What kind of regulations should be modified to generate more companies

<br /><br />What kind of regulations should be modified to generate more companies

 

It is not a problem of regulations. One of the problems of entrepreneurs, precisely, are the regulations, laws, and obstacles. And of course, funding and institutional advertising, which does not work. There is no real incentive from the administration to generate business. Now they try it because they have realized that it is necessary. But what cannot be is that suddenly you throw everyone to be an entrepreneur. Not everyone is worth to have a company, without having a fixed payroll every month, working many hours a day …

What is the current profile of an entrepreneur?
In general, in Spain, right now, the majority are men with an average of 44 years.

And what qualities must it have?
One, very important, is the capacity for suffering. You will go through many difficulties to start your business. Pegas that does not make any sense and that cause many unemployed people to stay at home collecting the unemployment benefit and not set up their own business.

What kind of obstacles?
Especially administrative. When you want to start a business, banks do not give you a loan. They ask you for guarantees, properties, etc. For banks, everything is financial operations. They do not value the company. It’s like buying a luxury asset, instead of setting up a business that will generate wealth and future work. That’s why it’s so difficult for young people to start.

What helps or which routes are the best?
The most specific aid is given by the Official Credit Institute in its icodirecto line to encourage the development of entrepreneurs. They study the business model and decide who to finance and who does not. But, unfortunately, today 70% of loan applications are rejected … The rest of the aid is generated by the autonomous communities themselves, but they are micro-grants. For example, they grant 5,000 euros to pay the costs of the lawyer or to put the company on the starting line, but they do not guarantee its survival.

And most of them break …
90% of small and medium enterprises go bankrupt during the first three years of life- you’ve got lots of options. There is no one specialized in helping them to stay. Although I have to say that in this regard, the Chambers of Commerce are collaborating a lot with SMEs. 

And the private aid?
There are few private investors and there are not many venture capital funds either. The market for private investment in Spain is very small, and certainly, when someone needs 200,000 euros to generate their business, it is really difficult.

We want to start a business, where do we start?
For the idea, but let’s not forget the team, it’s the most important thing. The idea of business is molded little by little, but it is not immovable. Very successful companies started doing one thing and then, due to different circumstances, they changed. And I reiterate, the team that develops the idea is very important. For example, Facebook was not the idea of its creators. A good team took the idea and developed it in the most successful way. The same happened with the Apple iPad. It was not an invention of the brand. Apple took the patent and executed it in the most successful way, thanks to its team.

But, currently, for small and medium enterprises it is difficult to maintain a team. Most times you can not satisfy the professionals as you should or how you would like …
It is difficult to maintain the team, but by offering a shareholding in the company, for example, you can motivate your staff. A payment in shares is quite logical and causes the employee to become more involved. Google does it. Its first 1,000 employees own the company with a shareholding. That keeps them happier.

Would you define the Catalan society as an entrepreneur?
It is quite more entrepreneurial than the rest of Spain, however, in the last study we have done, it shows more need for external help to start a business. Catalan is more inclined to generate its own business. He is more enterprising, but he demands more help, more information, than the rest of Spain.
Will 2011 be the year of entrepreneurs?

Surely yes. 69% of jobs in the country are generated by SMEs and the self-employed and the destruction of employment has come from the SME, they have closed 350,000 companies. The only way to rebuild employment is by generating new businesses that, in turn, create jobs. Without a doubt, this year will not be that of the vocational entrepreneur, it will be that of the entrepreneur by necessity.