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The Broken Road – Starting a Business in CR

It was finally time for me to stop playing around with the remedial jobs in Costa Rica and start my own business.  One thing to realize when living in Costa Rica is that unless you own your own business or company, there is not much chance of you moving past a situation where you are living paycheck to paycheck.  There are of course exceptions to the rule but that is just what they are – exceptions.

finding happinessThe only way I was ever going to be able to compete with Priscilla’s husband was to be able to show that I could financially support a family.  That meant trying to place as many materialistic things in my life as possible.  I needed to make money for a car; house, nicer clothes, and all the things that do not bring true fulfillment into a person’s life.  Little did I know that these wants and needs would just bring more anger and unhappiness into my life.

After my experience in the hospital and going through the 3 months of hell, I had changed my outlook and realized that we are not guaranteed tomorrow. We must always cherish the small things in life. A life based around always saying “I will be happy when… (Insert goal here)” leads to always being unhappy and never being content with what you have today.  It is how most of us live based on a society that sets parameters of success based on the type of car you drive, where you live, where you go on vacation and how much money is in your bank account.  While having money to support your basic needs is important, there comes a time when always striving to make more and more will leave you looking back on your life, and one day and counting the things you missed out on while on the road to place the almighty dollar in your pocket.

I digress. The key to starting a business idea is that it must be original and focused on your niche market.  I also had to add into this scenario the implementation of a business plan and a little startup capital which was needed to bring the idea to fruition. As the ideas formulated, one idea kept popping out; a universal Costa Rica discount card.  This would be something that would be useful for both the Costa Rican population and tourists arriving on vacation.  It works with City Pass in the USA, why would it not function in Costa Rica? Saving money is a common desire in every culture.

Step one was generating a website and the marketing plan for the company. I would need an investor for the project but had to at least get some visual aides to go along with the idea.  Over about a week long period, the website for the discount cards as well as the Costa Rican Times was put together. Although working for the other newspaper had been frustrating, it had taught me a lot about online media, social networking, and what was required to generate traffic for a website.  All of these tools were needed on this next venture.

With the website up and running, I contacted an acquaintance in Dubai to talk to him about the project.  When finding an investor in a start-up business in Costa Rica, make sure they are out of the country or do not have starting a businesstime to take on any other projects before presenting them your idea.  No matter how well you think you know someone in Costa Rica, there is a good chance that if they have cash and they are here, they will take your idea and run with it unless you are about 3 months ahead of them already.  It is hard to make legitimate, ethical money in Costa Rica and you will be pulling the knife out of your back if you present a money making idea to someone with the means to put the idea in motion.  I should state that this can happen anywhere in the world; however, my experience is in Costa Rica.

After putting together the expected time to pay back the initial investment and the monetary payback amount, I estimated I needed about $5,000 to put this project in motion. Everything was for project costs, nothing for my work.  I added on another $1,000 to make sure I had enough cash for any unexpected costs and problems. You should expect both to occur while getting a business together in Costa Rica.  With the proposal in front of him the investor immediately said yes.  It was time to get all legal paperwork done to make it real.

After two 4 hour trips to the lawyer’s office, one of which was cancelled 10 minutes before I arrived by bus, the corporation was in place and the first half of the investment capital was in my possession. The idea to get this venture moving forward in a positive manner was going to require a lot of initial work on my part, surrounding myself with the right people – driven and focused.

I am not one to feel comfortable charging people for a product that was not producing anything for their business.  I knew that the website at this point was not generating much traffic and that the discount card did not have any value until businesses were added to the program. I needed to bring on businesses myself and do it for zero cost to the business owners.  With the marketing materials in place in English, business cards printed, and sales pitch in hand, I started out to talk to bars, restaurants, and dance clubs in and around my area. How could anyone turn down free marketing and publicity? The answer to that question in Costa Rica turned out to be – very easily.

I had started the idea with the discount card as something that would start off in English and then move into the Spanish speaking sector. Stating the obvious, most businesses in the San Jose area are Costa Rican owned and many do not speak English. Right away everything had to be translated to Spanish to present to businesses.

The owners when they are at their businesses are normally busy putting out fires or dealing with employee drama most of their days.  Just getting a meeting set up with the business decision maker can be a difficult task.  Leaving the marketing information packet in Spanish at the business quickly was shown to be a waste of time as the owner would not read it or it would not get in the hands of the owner.  Although the trip to get to the nearest college town from me was only about an hour round trip, it normally took 3 to 4 trips to finally get to speak to the owner.

My Spanish is not perfect but after 8 years of taking classes and being immersed both in the culture in Mexico and Costa Rica, I can handle myself in a business setting.  The basic pitch to the owners was the following which I thought no one could turn down.

We are going to do the following for you.

  1. Do an article in English and Spanish about your business on the website to help widen the number of people that have knowledge about your business
  2. We are going to SEO each article to generate web traffic for your place of business and link your current website and contact info
  3. We are going to include you in the flyers and marketing material we present while selling the discount card
  4. We are going to push business to you and put more money in your pocket because of the increase in clientele

nobrainerAll of these things were absolutely free to the client all they had to do was give any sort of discount or special. We make money selling the card and they get more business it is a win/win for both sides. You would think that this would be a no-brainer for anyone that you talk to, but not in Costa Rica. Some of the responses were completely amazing after the pitch, you cannot make them up. Here are a few examples.

“It’s free? I do not want to do it if it is free. But I also do not want to pay for it.”

“I do not do business with gringos.”

“I will do it when there are more people on board”

“So this means everyone coming into my bar will have one of these cards.”

And my personal favorite, which I knew some Costa Ricans think but never expected anyone to say it. This is an actual conversation.

Potential Business – “Ok I understand what you are doing but what does this do for my business?”

Me – “We hope to drive more business and people to you, in order to put more money in your pocket.”

Potential Business – “More people means more work, correct?”

Me – “Yes, I guess more people could mean more work.”

Potential Business – “Then I do not want to do it”

I am a pretty solid sales person but there is no rebuttal to laziness.

Each day generated more and more frustrations and more and more costs.  I needed to hire a sales crew to help me cover more territory quicker.  My set deadline for when I wanted to have revenue actually being generated was quickly approaching and adding 2 to 3 businesses a week in San Jose would not cut it.

The next challenge; trying to get reliable driven employees to work for a startup company with only the ability to offer them straight commission positions.

Next up – The Nightmare of Hiring Employees in Costa Rica

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