According to the May 2025 SME Figures (Cifras PYME) study prepared by the Ministry of Inclusion, Social Security, and Migration, there are nearly 3 million small and medium-sized enterprises (SMEs) in Spain. Of these, more than 1 million fall into the microenterprise category—SMEs with between 1 and 9 workers—and more than 1.6 million were sole traders (i.e. businesses without employees). In both cases, there was an increase from the previous year’s figure. This growth reflects a trend of expansion in the small business sector, driven in part by increased revenue.

According to the CEPYME Indicator (Indicador CEPYME) report from the Spanish Federation of Small and Medium-sized Enterprises (CEPYME), small business sales grew by 4.7% year over year (YoY) during the first quarter of 2025, while their real gross profits increased by 1.9% year over year.

This positive context has fostered entrepreneurship in Spain. If you’re among those considering starting a small business, this guide will explore key points you need to know, including how to make your business profitable.

What’s in this article?

• Business ideas with low investment and high demand
  
• What makes a small business profitable in Spain?
  
• How to create a profitable small business in Spain
  
• FAQs about profitable small businesses in Spain
  

Business ideas with low investment and high demand

In Spain, there are some businesses that are in high demand and tend to offer high profitability, meaning they require a low initial investment and can generate a large amount of revenue. Here, we’ll look at the most representative categories of SMEs without employees, as reported in the SME Figures study, and we’ll offer several insights.

Electronic commerce

According to the Spanish National Markets and Competition Commission (CNMC), electronic commerce in Spain generated revenue of more than €95 billion in 2024, reflecting a very high level of demand. The initial investment in this type of business is fairly low because, unlike in-person sales, the fixed costs associated with ecommerce are significantly lower.

• Sale of products under the dropshipping model
  This type of business pertains to the wholesale and retail commerce industry, which, according to the SME Figures study, has 286,351 sole proprietorships in Spain. This is one of the easiest businesses to start because it doesn’t require a warehouse or internal supply chain control. In a dropshipping model, the company simply acquires customers and ensures that the distributor delivers the products to the recipients.

• Sale of digital products
  Digital products are usually very profitable, as they only involve minimal costs and can be sold an infinite number of times. Some examples include templates for documents or presentations, themes for website design, audiobooks, and ebooks. In 2024, the Spanish-language ebook market generated €71 million in Spain, according to data from the 2024 Annual Digital Book Report (Informe anual del libro digital 2024).

• Online training
  This type of business pertains to the education industry, which, according to the Ministry of Inclusion, Social Security, and Migration, has 64,928 SMEs without employees. As this is a service aimed at both individuals and professionals, it has the potential to offer great profitability. In fact, many teachers provide training on B2B marketplaces such as Malt, which has 65,000 registered self-employed professionals in Spain. As for individuals, a Eurostat study published in 2024 revealed that almost half of Spaniards took online courses or used online training materials.

• Production of custom-made or personalized products
  These businesses, quite numerous in Spain—38,577 companies according to the latest available data—tend to be in high demand among customers seeking exclusivity. One of the most profitable innovative business ideas is printing personalized 3D figures, such as those produced by MyMiniFactory, a marketplace that connects designers and customers from around the world. Other examples of custom-made or personalized handcrafted products that can generate large profits include decorative items, furniture, jewelry, and preserved flower bouquets, which are commonly found on online craft platforms or sold directly from Instagram profiles.

• Software development
  This type of business pertains to the information and communications industry, which has 55,043 small businesses in Spain, per the SME Figures study. These IT solutions are especially common in B2B environments, although in some cases they can also be sold to public agencies. To this point, as part of their commitment to digital transformation, investment in software by public agencies increased by 61.6% in 2023, according to the Digital Economy Barometer (Barómetro de la Economía Digital). It is worth noting, too, that 32% of the companies that were present at the 17th edition of the Entrepreneurship (Emprende) XXI Awards were software startups, according to a report by CaixaBank, demonstrating the viability of this type of business.

Brick-and-mortar businesses

Although the ecommerce industry in Spain has shown a continuous growth trend for years, 68% of consumers still prefer brick-and-mortar stores to make their purchases. Therefore, these businesses can also generate large profits.

• Renovation services
  These businesses pertain to the construction industry, which has 200,200 sole proprietorships, according to the SME Figures study. Demand for renovation services has grown exponentially in recent years; in 2024, the number of home renovations in Spain exceeded 1.8 million.

• Specialized food
  The Ministry of Inclusion, Social Security, and Migration reported that there are more than a half-million microenterprises (i.e., businesses with fewer than than 10 employees) in the hospitality sector in Spain, making it one of the most common industries among SMEs. Finding a differentiated value proposition is especially important in this industry. For example, in 2024 the plant-based food market grew by 6.6% YoY in Spain, so opening a small restaurant or gourmet shop specializing in these types of products might be a good investment for the future.

• Clothing stores
  Opening a clothing store in Spain would place your business in an industry with constant demand; six out of ten Spaniards purchase a new item of clothing every month. Many customers prefer to make these types of purchases in brick-and-mortar stores rather than online, so they can try on clothes and avoid being part of the 44.7% of consumers who experience sizing issues—one of the main reasons for purchase returns in Spain.

What makes a small business profitable in Spain?

While setting up a profitable business is not an easy task, some factors make it easier to achieve profits from an early stage of the project.

• High demand
  One of the most important aspects of making your small business profitable is offering a product or service that’s in high demand. The ideal tool to confirm this is a market study, which will help you determine if your offering meets a real need in Spain. The next step is to carry out a product-market adaptation process, which is directly related to business profitability.

• Attractive pricing strategy
  In the process of finding a new market opportunity, it is important to also analyze the level of competition. To stand out from other companies with similar offerings, you can offer an attractive pricing strategy. For example, you can implement a dynamic pricing model that helps your offering align more directly with the value customers receive. An alternative that can be attractive and beneficial for small businesses is usage-based pricing, which entails fees calculated based on actual customer usage. While lowering prices at the expense of reduced profits is a strategy that generally only large companies can afford, small businesses can employ less aggressive methods, such as personalized discounts.

• Cost control
  Offering attractive prices isn’t viable if your business’s costs are high. It’s important to close deals that allow you to get the materials or services you need at the best prices, which will be easier if you have a good history of paying your suppliers. Apart from the initial investment, all businesses have recurring expenses. For example, you’ll need to rent a premises to sell from, unless you know how to sell online. There are also expenses associated with the payment platform you use—although some platforms offer transparent pricing with no flat fees, which can help your business’s profitability.

How to create a profitable small business in Spain

When starting a profitable business, it’s not enough to tailor it to a sporadic need or interest; it’s important for the project to be sustainable over the long term. Here are some key steps for making the process easier and helping you make some of the most important decisions.

Define your idea

You can start a business based on an idea, but not all ideas are viable. To define the project and evaluate its viability, consider the following factors:

• Skills and interests
  There are two fundamental aspects that serve as the foundation for the success of your business: the first is having the skills necessary to solve the problem or meet the need you have identified; the second is being interested in the type of project you are going to undertake, as this will make it easier for you to maintain the consistency and commitment required for a small business. For example, if you regularly help family and friends plan meetings, celebrations, or other events, and it is something you enjoy doing, you could start a small event planning agency. The events industry in Spain has experienced sustained growth since 2021, with the sales volume of agencies dedicated to organizing meetings, incentives, conferences, and exhibitions (MICE) growing by 8.5% in 2023.

• Startup capital
  Determine the amount of money you want to invest in your project. Some businesses require a lot of startup capital, but others—such as selling services online, which doesn’t require a commercial premises and can often be started without hiring any employees—involve almost no startup costs.

• Scalability
  Even small businesses with low startup capital can experience rapid growth that requires scaling up their business models. For this reason, it is advisable to analyze beforehand whether growth is viable from a financial point of view. When comparing brick-and-mortar stores and online stores, brick-and-mortar businesses can face considerable expenses—such as purchasing or renting a large commercial premises. Meanwhile, the actions needed to scale up an ecommerce business—such as contracting high-capacity web hosting—are usually more affordable.

Form the business

Once your idea is defined, the next step is to form the business, that is, to choose the appropriate legal form and follow the necessary steps to begin to legally accept payments. In Spain, there are two options for starting a small business: as a self-employed worker or by forming a limited liability company (SL).

As a self-employed worker

This is the most common option, as the procedures are simpler and the tax burden is lower if the business generates annual net profits of less than €40,000. The steps you must take are as follows:

• Register as a self-employed worker: Do this by filling out the Spanish Tax Agency (AEAT) form 036.
  
• Indicate what type of professional activity you will carry out: Do this with the corresponding economic activities tax (IAE) category.
  
• Notify Social Security of your self-employment: You’ll need to register your self-employed work with this form.
  
• Obtain any necessary permits: Get the permits needed in your specific cases, such as prior registration to sell food online.
  

As a limited liability company (SL)

If your small business has the potential to become very profitable in a short period of time, forming an SL might be the best option, since limited liability companies are subject to corporate tax. For microenterprises with low revenues, the first €50,000 of profits is taxed at 21%, while the remaining revenue is taxed at 22%. These percentages are much lower than the 37% rate applied to self-employed workers earning profits above €35,200.

To create an SL online on your own, it is advisable to contact the Business Creation Information and Network Center (CIRCE). This is a single point of contact that greatly facilitates the administrative and bureaucratic process, which involves steps such as reserving the company name, completing the Single Electronic Document (DUE), and processing registration in the Commercial Registry. Once all the documentation has been validated, you can request your company’s final tax ID number (NIF) from the Spanish Tax Agency to complete the process.

Validate the idea

Before investing all your resources into a business idea, it’s a good idea to make sure it truly provides a solution to a problem or need. To do this, create a basic or preliminary version of your product, share it with people who could become your first 10 customers, and analyze the interest it generates. The feedback you receive from these early users will help you implement appropriate adjustments before offering your product to the general public.

Design your sales channel

The next step is to choose the channel you will use to reach your customers: a commercial premises or an online store.

Commercial premises

When choosing a premises, two key aspects must be taken into account: direct competition in the area and the flow of potential customers. The ideal area should have good foot traffic and a limited number of stores in similar categories. The latter can be the most difficult; in 2023, there were 543,658 retail stores in Spain, according to data from the Domestic Trade Indicators Notebook (Cuaderno de indicadores de comercio interior) prepared by the Ministry of Economy, Trade, and Enterprise.

Online store

If your small business will be online, an online store is a sales channel with enormous potential; during the fourth quarter of 2024, ecommerce revenue in Spain reached a total of €25.7 billion, equivalent to 13.1% growth YoY, according to the CNMC.

To create your own online store, you can either develop it in-house (if you have web design and programming skills or a dedicated team) or opt for an ecommerce platform such as Shopify, PrestaShop, or WooCommerce if you prefer not to have to write your own code. In both cases, the website must comply with the Law on Information Society Services and Electronic Commerce (LSSI) and the General Data Protection Regulation (GDPR).

Accept payments

To accept online payments, it is important for the online store to include a payment gateway that is secure, easy to use, and complies with current legislation, such as the PCI standard. For example, Stripe Payments is a modern payment platform that allows you to accept payments online and in person, so you can use it regardless of the sales channel you have chosen for your small business. In both cases, with Stripe Payments you can offer your customers their preferred payment methods, such as Apple Pay, Google Pay, and even installment payment options.

Build customer loyalty

For small businesses to be profitable over the long term, it is key to build customer loyalty through a positive experience. For brick-and-mortar stores, a good loyalty-building strategy is to offer a customer-friendly return policy that matches or exceeds the 14-day right of withdrawal period. When it comes to online sales, some of the most effective strategies for improving the customer experience include streamlining the purchasing process or accepting Bizum at your online store so that the customer only has to enter their phone number to complete the payment.

FAQs about profitable small businesses in Spain

Is there any help for starting a small business in Spain?

Yes, there is currently some help for starting a small business in Spain. Business support centers (PAE) can help you start your business from home and obtain a grant to start your business, such as the Digital Kit, which provides a maximum grant of €5,000 for SMEs and self-employed workers. In addition, you could benefit from the flat rate, which temporarily reduces your Social Security contribution, one of the taxes levied on self-employed workers in Spain.

Can you start a small business from home in Spain?

Yes, provided that you have formalized and declared your business activity, you can use your home for your business. For example, if you want to create an online store, you can ship products from your home as long as the your postal address, as business owner, is clearly indicated in the online store, in accordance with Law 34/2002. That said, with very few exceptions, it is not possible to sell online without being registered as self-employed in Spain.

How can you know whether you’ve made a mistake when choosing the products you sell in your small business?

If you want to know whether you’ve made a mistake with the products you’re selling, analyze some metrics, such as cart abandonment rates, how many customers decide to exercise their right of withdrawal, or the percentage of negative reviews given to your products. If the results of your analysis are negative, you can take steps to increase the profitability of your small business, such as changing your marketing strategy or varying your product offering.