Somnio Hostels
Lauren Gonzalez & Lee Gonzalez

ExpatWomen's Interview with Lauren and Lee

ExpatWomen: Lee, in 2004 you won a Ladies Who Launch Business Idea Contest, for your plan for a high–class, low–cost chain of international hostels. But it wasn't until you partnered with your sister Lauren in 2006 that your idea gained momentum. Talk us through what was stopping you in 2004 and how your idea finally came to life.

Lee: The idea for a chain of upscale hostels back in 2001, but I didn't pursue it back then was because I didn't feel that I was in a place in my life where I was ready to start my own business, especially a business abroad.  When we won the Ladies Who Launch contest in 2004, I was less than a year into a two–year analyst program at a great bank on Wall Street and, while I knew my dream was to start the hostel business, I knew that I had more to learn in the professional world before I could be a successful entrepreneur.  In the few years that Lauren and I spent in the corporate world, I think we both honed a skill set that has helped us start a business from scratch in a foreign country: great communication skills; professionalism; and attention to detail. People might regard the decision to leave well–paying corporate jobs with a clear career path to start your own business in a foreign country as a huge risk, but we were at a point in our lives where we had no commitments, not much money to lose and a lot to gain.

Lee: So far, Somnio has been very well received.  We were listed as a recommended hostel in the American guide, Let's Go Spain and Portugal 2009 and are a featured hostel in Rick Steves' Spain 2009 guide.  We have only been open for slightly over a year so it is hard to quantify growth but our year over year revenue trend is positive in an economic environment where many new businesses are forced to shut down.  Revenue growth aside, one of the most inspiring qualitative indicators is the astounding amount of repeat and first–hand referral business we get.  In our first year of operation, one guest stayed with us three times!

Lauren: Living and working in Milan and Hong Kong definitely gave me a taste of how exciting and rewarding expat life can be – which just increased my appetite for adventure. I was certainly well–prepared for some of the difficulties we have faced settling in to and opening a business in a different country, but the decision to make Barcelona our first location was a joint one. We chose Barcelona because of a few factors: we genuinely thought the city would be exciting; we were familiar with the language; and we loved the quality of life. Barcelona also has a booming tourism industry and because the weather is so mild and there are so many attractions and conferences in Barcelona, the low season happens to be very short, which was important to our business plan.

Lauren: We were not accustomed to the slower pace of life and business transactions in Spain when we first arrived. We had hoped to hit the ground running and open our first hostel quickly, but it took a lot longer than we had planned. There are a lot of bureaucratic hurdles to overcome in incorporating a business, getting licenses, establishing residency etc. Each process has a ton of steps that involve a lot of waiting in line at government offices and filling out piles of paperwork. Serious patience and a sense of humor are required to get ahead here.

ExpatWomen: What would be your top five tips to budding entrepreneurs, wanting to start their business abroad?

Lauren and Lee:

1. Start networking as soon as you hit the ground. Talk to everyone you can about your plans, and hand out business cards. Some of the best connections we made were through other expats who were in similar situations or had businesses already established in Barcelona.

2. Keep asking yourself whether what you are doing is making you happy. The lifestyle of an entrepreneur abroad can be harried and stressful, but it should also be fun and exciting. Remember to keep that in mind.

3. Always keep things in perspective. There will be days where you feel like you might never accomplish your goals and that everything seems impossible, but take a break, go for a walk and be proud of yourself for doing something most people would never dare to do.

4. Before you move abroad, visit and talk to other entrepreneurs and business owners. Learn from their experiences and get a sense of what you are getting yourself into before you take the plunge, and

5. If you have a choice of where to set up your business abroad, make sure it is a place where you know you can be happy, even in the middle of winter with debt up to your ears and piles of work.

ExpatWomen: Where will Somnio Hostels be opening next?

Lauren: We are hoping to open another hostel in Barcelona this year. With the feedback we have had from guests this year, we have great ideas to improve our hostels as we continue to expand. Ideally we would like to start looking at other major tourist destinations within Spain like Madrid, Valencia, Seville and Granada next before branching out to other European cities. Eventually, we hope travellers can book lodging for their entire European vacations in one go with Somnio.

Lauren: We would like to grow the business using current profits to fund future expansion. It is likely that we will need to go back to the bank for another small loan or line of credit though if we take on a bigger project. The Spanish bank Caja Navarra has an exciting program called Eurcan that caters directly to entrepreneurs. They provide funding for approved business plans in the form of lines of credit and equity–participation loans. We hope to continue working with them as we grow as they have been very supportive of our project from day one. Once we have grown the brand a little more, we will look to franchise.