But, he is dead serious. We are doing our best to dissuade him, so, I am relying on Nomads to let fly.
1. He has no experience with doing business in Mexico.
2. He has no restaurant experience of any kind.
3. He doesn't live in Cabo or visit regularly.
[Edited on 9-13-2010 by Gypsy Jan]Dave - 9-13-2010 at 03:37 PM
Quote:
Originally posted by Gypsy Jan
1. He has no experience with doing business in Mexico.
2. He has no restaurant experience of any kind.
Lack of restaurant experience isn't always a recipe for disaster however, lack of successful small business experience, is.
As a foreigner, succeeding in business in Mexico is totally dependent on where. If the local population and agencies want you to
succeed...you'll probably do OK. If they don't, no amount of experience or business acumen will help. You're doomed.dtbushpilot - 9-13-2010 at 03:54 PM
I think it sounds like an adventure in the making. If he has an entrepreneurial spirit, doesn't mind hard work and long hours and makes friends easily
he just might succeed.
You say he wants to buy a pizza parlor. That would lead me to believe that he would be buying an existing business. How are they doing financially? Do
they make good pizza? Do the locals eat there? These and of course many more questions need to be answered before one could give serious advise as to
weather it is really a bad idea or not.
What gave him the idea in the first place? I'm sure he didn't just have an epiphany in a dream.....or did he?.....dtmonoloco - 9-13-2010 at 04:22 PM
He must be a masochist.k-rico - 9-13-2010 at 04:25 PM
How do you make a small fortune in the restaurant business?
Start with a large fortune.
I know, it's an old joke.motoged - 9-13-2010 at 04:59 PM
Many of us take a vacation to a distant locale and think we want to live there forever.
Remember that?
Oh, yeah, some of you live there now....
Viva Baja dreamin'
I would like to order a pesto-camarone with feta, sundried tomatos, garlic and thin wholewheat crust....does he deliver?Bajahowodd - 9-13-2010 at 05:11 PM
Similar to Pompano, I have friends that chased that dream, and failed. Here's the problem. Virtually all of the resorts throughout Los Cabos contain
multiple restaurants. and the somewhat recent development of the all-inclusives, just added to the burden on the independents, in that folks could
spend their entire vacation and never partake of a meal off-site. Then, consider that the taxi union has made traveling into town expensive,
remembering that many tourists arrive by plane and don't rent cars. So, what is left is a battle among those private restauranteurs. I'm reminded of
the guys who set up shop just off the main drag (Pazzo's Pizza) who actually had a great location and a great set up. They bailed. Some of them moved
to Todos. There are a few people who have made it in the independent restaurant field. John and Mary Bragg, and Gunther Richter and his wife have done
it. Obviously great marketing skills are required.
There's actually another sinister aspect working here. The Solmar guys, who have hundreds and hundreds of timeshares have a number of restaurants off
site. They steer their guests to them. For instance, Romeo y Julietta, and La Fonda.
It's a jungle out there. And having zero restaurant experience is ridiculous.Pompano - 9-13-2010 at 05:34 PM
Gypsy Jan. We just put a homemade jumbo-large pepperoni/Canadian bacon/squid pizza into the oven. This pizza is authentic Italiano with very
special sauces and fantastic cheeses. Everyone I know loves this recipe.
Hey, maybe I should start a pizza palace? I can see it now...
First ...c-cktails on the patio, some lively salsa dancing around the firepit..then a pizza fantasy with iced Pacificos...followed by slow, sensuous,
belly-grinding to violins..the full moon coming up over the Bay...HMMM..
Good Grief! I'm gonna do it! Zulema..where are you??
Gypsy Jan, We hope your friend gives this some long and deep thought before taking a financial plunge that could bellyflop badly for him. Failed
restaurants in Baja are counted in the thousands.
[Edited on 9-14-2010 by Pompano]Howard - 9-13-2010 at 05:42 PM
If your friend pursues this dream I wish him nothing but the best of luck.
With that being said, what is the "over under" on how long he will last?
Assuming he has deep pockets, I say 5 months and that is assuming no natural disaster (chuhbasco's, hurricanes, etc.) speeds up the inevitable
outcome.
Once again, I wish that he makes a million dollars and proves me wrong but this might fall under the category of death and taxes, can't avoid either
one.If your friend pursues this dream I wish him nothing but the best of luck.
With that being said, what is the "over under" on how long he will last?
Assuming he has deep pockets, I say 5 months and that is assuming no natural disaster (chuhbasco's, hurricanes, etc.) speeds up the inevitable
outcome.
Once again, I wish that he makes a million dollars and proves me wrong but this might fall under the category of death and taxes, can't avoid either
one.wessongroup - 9-13-2010 at 05:46 PM
Think ya atta aske the guy what he really wants... to do...
Hell, not to sure owning a resturant any where, is all that much fun.... proably wrong usually am..
But, the folks I seen with really good places ... work there butts off... I can appreciate the "positives" one could derive from a really good place
putting out really good food..
A tough business .... think Pizza Hut is down to a $6.99 large pizza.. and it wasn't too bad... really ...
But, would like to know what he really wants.. lets say he gets the restruant, does he want a chain, a fishing boat, house, plane... me I'm easy I
don't want to do anything... other than what at moment.. which can change rather quickly for me...
Physical travel has been removed from my life to a very large extent.. therefore my options of things to do are reduced, plus I'm retired and really
don't want to work, I might if someone came up with a real problem and I could help them in some way .. I would consider... but, I'm really burned out
in "business dealings".. just tired of them.. not that I could not, I chose not to.. I've been working since I was in the 4th grade.. plus the normal
chores around what ever place I lived..
So I'm enjoying my retirement, today is just super, plus I get to see Pomanpo .....some how, get his copilot put is bbq togather and start dinner..
and a bbq that held, what was it 16 turkey's.... and some phesants too...
But there must be something going on in that brain...
Get him s hit faced... maybe then it will come out....
Just a thought...
[Edited on 9-14-2010 by wessongroup]
[Edited on 9-14-2010 by wessongroup]XRPhlang - 9-13-2010 at 06:00 PM
It's all in the percentages:
30-32 % food and beverage cost
30 - 34% Payroll and taxes (including his own)
6-8% rent
8 % debt burden (don't borrow more than 6 mo. gross recipts)
10 - 15 % everything else: cleaning supplies, advertising, decorations, drain clearing, equipment and building maintence, pest control, china glass
& silver, merchant service fees, discounts and a bunch of other things I can't think of.
I know that doesn't leave much profit. As the restauranteur becomes a better operator he can trim a few percentage points. 3-4 % of 50k combined with
the payroll he's already taking might double his income. Become a corporation and deduct everything you can, (car, gas, travel, entertainment,
groceries , etc.)
Show up everyday. Let the customers see your involved. Keep the place clean and safe. Watch and check everything. Do frequent inventory checks. Try to
introduce something unusual. Produce excellent food and service (duh). Watch the monthly reports, forget about the day to day.
He may, or may not get rich, but if he makes ikt a fun place to hang out, he'll undoubtedly become a big shot in town.
Of course these rules apply restaurants in the US. Things may be a little different in Cabo.
Oh yeah. Don't worry about too much competition. Just provide a better pie with a new twist and they'll eventually all come to you.
Still interested?
[Edited on 9-16-2010 by XRPhlang]castaway$ - 9-13-2010 at 06:14 PM
Could be worse, he could be thinkin "taco Joint".oxxo - 9-13-2010 at 07:07 PM
One of the pizza parlors just went out of business in Cabo.UnoMas - 9-13-2010 at 07:19 PM
If your friend wants to throw away everything he has, that would be a great investment. It would save him much disappointment and heart ache if he just gave it to a charity
of his choice
[Edited on 9-14-2010 by UnoMas]JESSE - 9-13-2010 at 08:44 PM
Anybody that wants to buy, start, or have anything to do with a food business in southern baja right now, is out of his mind. He has a better chance
of making money at Caliente betting on dogs than in a restaurant here.
[Edited on 9-14-2010 by JESSE]dtbushpilot - 9-13-2010 at 09:22 PM
There is a great pizza restaurant in Los Barriles, I like their pizza, apparently a lot of other people do too. I'm guessing that everyone wants to
save this poor misguided soul from certain destruction but come on, WTF? Hasn't any of you reached out for something? Have none of you had and pursued
a dream? Don't answer that, it was rhetorical.....
Do your homework, don't listen to the naysayers. If the numbers make sense and you are willing to put forth the effort go for it. Don't get me wrong,
it's no accident that 90% of small businesses fail in the first 5 years (in the US). but that leaves 10% that make it.....for a while anyway.
Where's the support, where's the entrepreneurial spirit?.......
Small businesses make it every now and then, they are the backbone of America and every other free country in the world including Mexico. Will it be
tough? of course, can he make it? you bet he can, quit being so negative, none of us know what this person is made of, if he has spit and vinegar
maybe so, if he wants to head to the golf course at 10am maybe not.
Apparently we don't have many entrepreneurs on Nomads.....dtwessongroup - 9-13-2010 at 09:43 PM
Quote:
Originally posted by JESSE
Anybody that wants to buy, start, or have anything to do with a food business in southern baja right now, is out of his mind. He has a better chance
of making money at Caliente betting on dogs than in a restaurant here.
[Edited on 9-14-2010 by JESSE]
Sage advice from someone in the trade... and dealing with "all" the problems which do occur, "good" ingredients to monthly gas bill for keeping the
ovens going...
Easy to sell on with the right numbers.. put, for those that are doing it... well.. they sometimes have a different take on things.. which is very
valuable...
I'm hope GJ can use something like this to HELP her friend out in his thinking ... as I too would be very hesitant to be investing in just about
anything at the moment... either here or in the states....
If he has "cash".. keep it in something with zero risk.. and buy the pizza's and enjoy some time off, for a year or so ... just my two cents...
[Edited on 9-14-2010 by wessongroup]bajamigo - 9-13-2010 at 10:15 PM
Quote:
Originally posted by Bajahowodd
I'm reminded of the guys who set up shop just off the main drag (Pazzo's Pizza) who actually had a great location and a great set up. They bailed.
Some of them moved to Todos.
Very appropriate. "Pazzo" in Italian means "crazy." Like foxes.dtbushpilot - 9-13-2010 at 10:32 PM
Don't do it, don't take any chances, don't risk anything, wait for the government to do it for you.......don't start a small business, it won't
work....maybe you should count on unemployment insurance and welfare....
Don't take a risk, don't put your future in your own hands, you don't know what's best for you, listen to the naysayers, they know what's best for
you. They sit at their keyboards and spout out the best advise......
Ask them who amongst them have been in your shoes.....listen to those who have been in your shoes......if you have the balls and have DONE YOUR
HOMEWORK then go for it or not.
It takes a special type of person to make it in a small business....ask yourself, am I that person? If not, save your self a lot of pain, if so, go
for it.....dtwessongroup - 9-13-2010 at 11:01 PM
To set the record straight.. I had my own small business..
And I'm not trying to be a naysayer, rather to insure that the individual really knows his own mind and what are the up front problems which will be
faced, and that he conduct proper due diligence on all aspects of the venture..
I would not rule out, negative comments, nor would I rule out positive.. perhaps his timing is perfect for this type of business, I do not know based
on what has been put up thus far... but, I do know over the past months Jesse has shared some of his operational costs, plus other issues he must deal
with in running a restaurant in BCS ... and this kind of information is very valuable in the overall process
Will not disagree, that it is hard, and you must eventually take the plug and the risk.. but, being careful in going into it.. will just keep some of
the numbers in your favor... which would add to your chances of making a go of it...
I would want to get it ALL together and then study it carefully and then fish or cut bait on the call ... but, base the call on sound information
developed from comprehensive due diligence .. with a sound business plan in place .. before making the call...
Was thinking in these terms... for this individual... as GJ indicated the individual was a little green ... on the location, and running a business
...
Wish him all the luck... but, to be pragmatic in his overall approachwilderone - 9-14-2010 at 08:42 AM
Of course we would all wish him good luck. And there are risks in every business, but this situation would call for careful calculation, analysis,
study and some experience in the field of endeavor would certainly help. Does he speak Spanish? He would need to hire some employees, deal with
municipal entities, etc. He must speak with many business owners in Cabo and see what is happening now. Why now, with tourism down? Why Cabo, when,
as a poster pointed out, many of the Big Money hotels also have interests in restaurants. He'll need lots of advertising, as do many, many tourist
oriented establishments. He might do better driving an ice cream truck, opening a laundramat, setting up some fish taco stands on the beach, selling
bakery goods out of a truck, tamales out of a truck. Those LB folks have a grocery delivery service now. He should have a nice truck with fruit,
vegetables, bakery items and drive through LB - all those Canadians with no cars and expensive taxi service - give them what they need. And isn't
that really what succeeds - providing something that is needed? Cabo don't need pizza.gnukid - 9-14-2010 at 09:15 AM
For foreigners running a business, one requires a local business license and valid RFC from a notaria which can run just about about any cost,
generally about $1000+ to setup, if any errors are made stating the exact activity to be done there (and there will be misstated activities), you
would need to amend the association which can run about $400. The Foreign owned association must be registered with the office of economic investment,
if they decide the business infringes on native businesses or they make up some rule they can require further amendments, the costs to register with
the office may vary, each year the RFC must check in with the office of economic investment once within a specific window of time based on the name of
the business if you miss that date for any reason you will be fined about $100.
Each business must be registered with the hacienda, this requires an appointment which must be made weeks in advance, you must have all documents
proper to be registered to get your cedula or current registration. Then you must file monthly for taxes through an official accountant who charge
flat fees of about $50-200/month plus taxes which may run about 15-30% of income. Each employee must be paid and have paid social services etc...
generally this allows the employee to quit at anytime after an initial period and demand a payout of their benefits and bonus.
The owner would generally be the administer unico of the RFC, of course this presents a chicken before the egg scenario since one must have a legal
business to sponsor a legal visa, which one comes before the other no-one knows, ones needs an RFC to sponsor a foreigner for work. Let's say you get
through that $$$, then you would require a visa annually for the owner and all foreign employees and their spouses under the RFC, these visa
lucrativos run about $200/yr minimum plus the hassle. They must be reregistered annually in person on a specific date with 3 weeks lead time, if you
miss that window you be fined and/or lose everything. Each foreigner is generally limited to one activity, so they try to say if you are the owner you
can't actually make pizza or run the cash register or do anything except be owner, though you might ignore that for awhile.
Once you have a business you would be expected to contribute to police, garbage and other service workers who will stop by to ask for their annual
tip. This can be aggressive, this last week police were arrested in La Paz for threatening and arresting people during the tipping process, they
demanded $3000/yr twice!
All of these things are difficult to understand especially if you do not speak spanish and worse if you speak it well. Once you are known and are
successful then you will be targeted for more payouts for crazy made up stories that are too impossible to comprehend, you can ignore many demands but
it isn't fun and makes no sense to a foreigner who wasn't raised there. Worse if you do not have family and friends en masse then its hard to protect
yourself since you have no one to pull the strings. Of course it this wouldn't happen to a local therefore no one will understand or be able to help
you.
Generally the more successful or the better pizza you make the more likely you will be targeted for idiotic demands and criminal threats since you are
clearly displacing locals who are currently desperate and hungry for pizza.
You can see that being a foreign owner in Cabo is not for the faint at heart, you might be targeted, you might receive fines and might have legal
issues regardless of how clean and upstanding you are, generally the more upstanding you are the worse it will be.
The best suggestion would be take the money you would invest and go directly to mexico city and get your citizenship first and spend a few months
learning spanish and donating money to the political party in power.
Let's say you do succeed and have a business running, soon someone in power might want that location and be jealous, some tactics that might be used
are to send you a electricity bill for $10,000 and have it keep doubling. Soon the power might be cut off and although its crazy and you attempt
reasonable negotiation the people in power might have you out on the street in a short time.
Perhaps this is why the pizza in cabo generally isn't very good?
This is all hypothetical, there are great pizza restaurants in Baja run by foreigners.
[Edited on 9-14-2010 by gnukid]mtgoat666 - 9-14-2010 at 10:34 AM
Quote:
Originally posted by gnukid
Generally the more successful or the better pizza you make the more likely you will be targeted for idiotic demands and criminal threats.
perhaps that is why the worst pizzas make for the best franchise businesses. if you sell crappy Dominos pizza, the mafia will leave you aloneHeather - 9-14-2010 at 11:14 AM
Pazzo's Pizza in Cabo was a really neat hang-out...great art work on the walls, surf videos from all the TV's, Ladies Night (free drinks till 11pm),
and great pizza. I always wondered what happened to the place...looked like it was a winner!
We get our pizza at Baja Cantina on the marina when we're in Cabo these days...
Although when we took my blind father-in-law from La Paz there for pizza, he was wondering what the "pedazo de cuero (leather)" was that we'd fed
him!!! (OK, maybe the crust was a little chewy!)Bajahowodd - 9-14-2010 at 02:31 PM
And...for those who've been around Cabo for a while, recall that Pizza Hut failed there.805gregg - 9-15-2010 at 07:34 PM
If he can deal drugs too, he will do allright, time to face the facts.DianaT - 9-15-2010 at 07:43 PM
I agree a lot with dtbushpilot---
Just what I would suggest to them
People have a dream, do your homework, look at what could be the worst possiblilty, and then ignore everyone and go for it.
There will always be those who say it won't work, and they may be correct, but they may be wrong.
If we had listened to the naysayers, we would have never spent two of the best years of our lives in Honduras and Guatemala.
It would save him much disappointment and heart ache if he just gave it to a charity