Baja Bernie
`Normal` Nomad Correspondent
Posts: 2962
Registered: 8-31-2003
Location: Sunset Beach
Member Is Offline
Mood: Just dancing through life
|
|
Doing Business in Baja
So often on these boards I hear people talking about doing business in Baja---This just may end up in one of my new books.
So you think that doing business in Mexico is a piece of cake. Well so did Mo who had kinda watched his dad, Manny, run several businesses in Baja
over a 40-year period with no problems. While Manny had been making a very good living in Baja Mo had been running his own fairly successful business
in Southern California. His dad had been heavily involved in the Cantina and Restaurant business in Baja and was very well connected with various
politicians and bureaucrats. Life was good!
Manny sudden passing caught his son with scant knowledge of how to run a Cantina in Baja. He tried to get his son to learn at least a little of what
it took to run the Cantina but the kid always laughed and said that running a business was the same all over the world. He pooh-poohed his father
when he tried to introduce him to the many politicians he had curried favor with over the years.
The first year after Mannys death the Cantina managed to basically run itself with the longtime manager doing those minimal things that were necessary
to hold it together out of his loyalty to Jack. The son was sort of a pain in the ass, but he only showed up once a month to get drunk and collect
the profit for the month. So things just floated along.
One evening when Mo was entertaining his friends, with round after round of booze one the house, he suddenly became very angry with one of the
musicians and cussed him out in no uncertain terms. Even though the guy spoke no English and Mo?s command of the Spanish language was restricted to
otra mas tequila (another tequila) he got the message. Both of the musicians had been working at the bar for over ten years and this sudden outburst
caused some very hard feelings. Mo?s attitude was that he was the boss and those clowns just worked for him. This in spite of the fact that he had
?no legal? standing in Baja. Egged on by his gringo buddies Mo ended up firing both of the musicians. Little did he know that the Mexican Government
had very strong laws that gave employees very clear rights when dealing with an employer. The guy who thought he knew how to run any business ended
up in court and had to pay the musicians $30,000.00 as severance pay. No, it definitely was not in pesos. He fought that judgment and lost again. The
$30,000.00 would prove to be the minor cost in this matter as his abogado?s (lawyer?s) bills just kept adding up.
This very expensive lesson would prove to be not the only one this guy would have to learn. For a few years he restricted himself to just trying to
drink up the profits and collecting those that were left.
The last lesson that I heard about was really a dozy! His manager failed to make sure that his sales taxes were paid for something over three
months?this is the one tax that all governments are very fussy about because it is their money and it is the businesses duty to collect it and turn it
over in a timely manner so that the government can promptly spend it. About the middle of the fourth month the guy was presented with a bill for
$3,000.00 back sales taxes and a penalty (I told you the government was serious) of an additional $10,000.00. Sure you know! Not pesos.
So he asked a bunch of people what he should do and one genius advises him to contact his accountant for direction.
Said accountant advised him to go to his bank in the United States and draw out $3,000.00 and seal $1,000.00 in each of three envelopes and then
return to Ensenada and meet with him and his secretary. Mo follows his instructions and the accountant and his secretary followed Larry, in separate
vehicles, to the rear of a Government Building where they told Larry to give one envelope to the accountant, one to his secretary and for him to hold
onto the remaining envelope and wait for them to return.
Mo waits for over an hour and begins to wonder just what the hell he is doing. He just gave $2,000.00 to a couple of people he does not even know and
he is sitting in a dark alley with another thousand dollars sitting in his lap. Now he is getting very, very nervous. Crap!
Soon the couple returns to his car and tell him everything has been taken care of. ?What do you mean?? Well, we just paid $2,000.00 to a guy in the
tax office and he will delete the penalty fee and all you have to do is pay an extra $300.00 per month until the back taxes are cleared up.
?That?s it? Well! What do I do with this last envelope?? Would you believe that they took that envelope as their fee for clearing up this terrible
tax matter?
Do you think this guy ever figured out that he just paid three thousand dollars to clear up a tax bill that he easily could have paid with the first
notice of delinquency and that he would now have to pay $300.00 a month for 10 months to really get straightened out with the government.
Hell no! It never even dawned on him that his accountant should never allowed the taxes to be delinquent in the first place.
Yes, doing business in Baja is very different.
Oh! Yes, the names have been changed to protect the stupid.
My smidgen of a claim to fame is that I have had so many really good friends. By Bernie Swaim December 2007
|
|
|
Eli
Super Nomad
Posts: 1471
Registered: 8-26-2003
Location: L.B. Baja Sur
Member Is Offline
Mood: Some times Observing, sometimes Oblivious.
|
|
Well Bernie;
Once again, you have given me much to chew on.
I do not think that the reason the anti-hero of your story was such a ditze was because he was a gringo. After all there are profoundly stupid folks
doing business amazingly successfully no matter where they were born, or their pension for error.
My own experinse being, I got my naglas whipped more times than I will ever want to admit doing business without having any idea what I was doing.
Man, I have to admit, I have been ripped off more than any soul that ever trapsed thru Baja, least wise, that I ever knew.
Yet, in the end, I would do it all over again; as upon reflection, I have retired young, found my art, live a very simple but outstandingly full and
good life, and I would not have all that I have, had I not entered in the most nieve soul that ever started a business in Baja.
[Edited on 11-12-2004 by Eli]
[Edited on 11-12-2004 by Eli]
[Edited on 11-12-2004 by Eli]
|
|
|
Baja Bernie
`Normal` Nomad Correspondent
Posts: 2962
Registered: 8-31-2003
Location: Sunset Beach
Member Is Offline
Mood: Just dancing through life
|
|
Eli
Perhaps you would enjoy enlighting the rest of the people on your business endeavors. Forget the art because that involves the soul and not the
wallet.
[Edited on 11-13-2004 by Baja Bernie]
My smidgen of a claim to fame is that I have had so many really good friends. By Bernie Swaim December 2007
|
|
|
Eli
Super Nomad
Posts: 1471
Registered: 8-26-2003
Location: L.B. Baja Sur
Member Is Offline
Mood: Some times Observing, sometimes Oblivious.
|
|
Gee, I donno Bernie,
I certainly did consulte the pillow as to how to answer your request. Still, I think that might be a full on story full of conterversy and certainly
in need of Spell check to write, expect there is still some dust to settle before I attack that one.
|
|
|
flyfishinPam
Super Nomad
Posts: 1727
Registered: 8-20-2003
Location: Loreto, BCS
Member Is Offline
Mood: gone fishin'
|
|
I'm not going to become a millionaire but...
...our lifestyle is truly priceless. I call my own hours (during low season anyway), my kids are growing up in a safe and laid-back place. No
traffic. Decent house with a nice view. Uncomplicated and now that I've learned from a few mistakes, not very stressful. Few rules. Nice folks
that we exchange greetings with wherever we happen to be. Once you realize that your employees are your responsibility, like your own children,
you'll do just fine. That's usually to be the biggest fact to figure out.
|
|
|
Eli
Super Nomad
Posts: 1471
Registered: 8-26-2003
Location: L.B. Baja Sur
Member Is Offline
Mood: Some times Observing, sometimes Oblivious.
|
|
Pam, In certain terms I whole heartly agree with you;
Alot has to do with the luck of the draw, your expectaions, and in what paticular business you are in.
The masons that now work with my daughter and her husband, (who are my present partners, 10 and 7 years respectfuly), are the same masons that I
started the business with in 1990. I love and respect these paticular men like no one on this planet, they are some of the finest artisan-craftsmen
that you would ever hope to find anywhere. Daily, I give thanks to them for the gift of freedom I now have because of all their efforts to keep Vos
afloat. When I sit to eat, I give thanks to God, my partners, and the masons of Vos. They, same as my partners are my family.
Same perspective I hold with our legal secertary; She has been with Vos Otros for 7 years also. When her little boy was born last year and wouldn't
take the bottle, we sat up a crib in the office for him. One of the fondest memories of my life is the hours I spent rocking that child. As to the
lady who cleans the office, same scinerio, she is like a sister to me. Thanks to these two women, I can be here in Oaxaca, while they run the gallery
for the 10% commison they make on sales. I have no concern what so ever of theft with them, they are loyal and aware of the true economic's of the
gallery. That which being it is a plain and simple luxury for me, the gallery is my baby, I just want to see it grow, it does not cost beyond what it
sells, all is reinvested in the art right now. Because of these women and the fact that I am part owner in the building where it exists, running
"Galeria Los Angeles" is the cookies and milk of my life. Really and truly, it is no big deal, I am not even there, and all takes care of itself.
Fine home construction on the other hand is a completly different scene; even though I will never regret the 16 hour days for how many years, I have
lost track of. It is a mean game to be in, the competion is desperatre and dirty beyond belief. You would not believe the games the contractors play
to get the work and how they rob their workers and suppliers in order to keep the job afloat. Certainly these men are their own worse enemies. Than
there is the gringos expectations of dimonds in the sky they will receive in the form of a home for the pennies they are promised it will cost when
they buy the properties, all is totaly unrealistic. It is as hard a busniess to be honest and stright in as I can imagine, still I did it, and the
kids, well, they too are proving that you can be stright and run a construction company in Baja, but it is not any easy business to be in. Ah but,
there I go, riding the edge of a rant, the dust raises, and I'm pickin a fight which there is no reason for, I survived and I am done, this is no
longer my issue, but I do know the truth of what goes on.
|
|
|
Dave
Elite Nomad
Posts: 6005
Registered: 11-5-2002
Member Is Offline
|
|
| Quote: | | Originally posted by flyfishinPam Once you realize that your employees are your responsibility, like your own children, you'll do just fine.
That's usually to be the biggest fact to figure out. |
That's a very diplomatic way to put it but sooo true. The only difference is that your own children grow up, (usually).
|
|
|
|
![[*]](images/xmbforum/default_icon.gif){kind=icon}
