Many foreigners start a business in Lake Atitilan, Guatemala, often it is easier to start a business abroad than to find a job that pays well in a foreign country.
The first question you need to ask yourself before you start a business is:
"Do you want to live on Lake Atitlan forever?" "How long do you need to live abroad, before you know for sure?"
If the answer is yes, than maybe you can proceed, but if no, then you have to have an exit plan. It is almost impossible to sell a business or Real Estate abroad. Often it takes 7-10 years to find a buyer. There are retired people who come to Lake Atitlan, Guatemala and invest the money they earned from the sale of a house in the USA, then lose it all, it is sad, to have no money in old age is a tragedy.
Taking the money from the sale of a home in the USA and investing is OK, if you retain enough of the principal to live until you die.
Are you so special you cannot fail? “The data show that, across sectors, 66 percent of new establishments were still in existence 2 years after their birth, and 44 percent were still in existence 4 years after. It is not surprising that most of the new establishments disappeared within the first 2 years after their birth, and then only a smaller percentage disappeared in the subsequent 2 years. These survival rates do not vary much by industry.” - U.S. Bureau of Labor Statistics
List of things to consider when staring a business on Lake Atitlan, Guatemala?
Which village on the lake is best for starting a business? Panajachel is slowly become too busy, too expensive, and many of the long-term Gringos living there will die in the next 5-10 years. The city of Pana has become a weekend destination for youth from Guatemala City, is this your target market?
There are not many new people moving to Pana, but many people are moving to San Pedro, or San Marcos, yet this groups is younger, who is your target market?
1. Do you want to sell only to foreigners or to locals, or both? The local expats of tourists will pay more to a foreigner than to a local for the same service or product. However tourists there are tourist season in Lake Atitlan, Guatemala, and you many not have money all your long.
2. Are you going to compete with a local company directly, this sometimes can be dangerous.
3. Are the police or local government of Lake Atitlan, Guatemala going to want a bribe or kickback, are they going to enter you business? People say, "I will not pay a bribe," but there is no choice, how do you not pay a bribe to the police when they have the power to close you?
4. Do you want to rent a building? A permanent Lake Atitlan, Guatemala allows for corruption to work better by the locals.
5. Do you need any licenses, and do you need to get residency or a special visa to run a business here?
6. Which laws in Lake Atitlan, Guatemala do the expats or foreigner obey and which ones do they ignore?
Bonnie, a long-time resident of Panajachel took over book selling business in Panajachel from her boss of many years. She then moved it Los Manos, then realizing that was not working, she moved it near the Patio Restaurant. Suddenly Bonnie left the village, owing many people.
The Vietnam Restaurant on Santander is new, but very few Gringos are entering the restaurant and probably almost no locals. The rumour is, she is paying 600 US per month for rent, and I asked the owners of the even small local next door how much they were asking for rent? She said, 800 dollars, I had to take a stop, and try not to laugh. They are dooming any business owner who is foolish enough to pay this type of rent.
The amount of money to be earned from tourists is maybe half the USA, therefore the rents need to be minimal. Any rent over 200 U.S. per month will almost guarantee the business fails on Lago Atitlan.
Solomons Porch has successfully been able to bring missionaries from the USA and business appears to be booming.
Mayan Families has also been good at coordinating poeople who want to come and do good works, and allows the staff to live good.
Crossroads Cafe, a coffee shop up near the market has a booming business of foreigners who live Pana, and most of the missionaries.
Lole's Restaurant in San Pedro ran by a Honduran man appears to be thriving.
Hans in the village of Jaibalito appears to be thriving, managing his hotel and restaurant in a very small market.
You are invited to write about your experience, with ideas and suggestions for how to start a busines on Lake Atitlan, Guatemala. There most important aspect of starting a business is knowing why a business failed on Lago Atitlan.
Thank you Andy Lee Graham a long-term visitor of 10 years to Lake Atitlan.
On-Line Business owner for 12 years HoboTraveler.com
Founder of MyLagoAtitlan.com
Successful Real Estate Broker in the USA for 14 years.
"Toto, I've a feeling we're not in Kansas any more"
- Dorothy from the Wizard of Oz Movie
The business that succeed what are they doing correctly ? What causes failure in a business?
It is almost impossible to sell a business or Real Estate abroad. Often it takes 7-10 years to find a buyer.
I met a guy and his wife recently who made the mistake of buying a large property in a south american country. Only to end up back in the US trying to make money to support the property they bought.lol They have been trying to sell the property (1.5 Million US) now for over 2 years with not much luck. People tend to fantasize of an Ideal life then bite off more then they can chew. Im for chewing less and being happier.
Hard for me to feel sorry for someone that had 1.5 mil to lose to start out with :( narrow minded of me but I have no reason to lie about it. The interest alone would be more than 90 of the world lives on including most people in the good old USA.
Lake Atitlan as Antigua is a travel destination, I lived in both and nearby Xela (Quetzaltenanago) as well as a 5 year stint in Guate City, I knew the expats and many of the locals in all 4 places, since I came to Guatemala in the 1980s before the time of cellphones and Internet, I started a business with very little overhead after I got my Guatemala Pates on my vehicle along with my residency, transporting people from place to place, general guide and oral interpreter for those who spoke no Spanish, put up notices in restaurants and Spanish schools and outsourced for a couple of small travel agency, I wound up working on and off for several years, the car costs $500 in the USA and ocassionally expenses for repairs and overhauls, no office to rent, when empty and driving back to Antigua or Guate City gave rides to locals and often times ex pats I knew were not carrying any illegal drugs. I was providing a service for those who did not wish impersonal buses or shuttles or those who required to get to the Capital city as fast a s possible, etc. In 1993 with the growth of tourism industry I was doing only Airport runs from my Antigua base so in 1993 returned to live in El Salvador and found other types of work, if you do wish to invest come to your target region first, stay at least a month, befriend and ask questions of small business owners, check out all the pros and cons and do learn as much Spanish as possible, check out all the little tourist towns and try to offer services no one else in the area offers, for example if you have a small hotel offer discounts on rooms and local tours low season, hire employees that smile and greet guests! there was once a Mechanic in Lake Atitlan who made quite a bit of money fixing ex pats vehicles. The local mechanics across the river were fondly known as the Greasy Brothers, ok for some little repairs, and cost of towing a vehicle into Guate City was prohibitive and I made money buying spare parts in the city for some who had broken down. Make a long story short, rent first and look around for real estate, dont ask anxious to buy and bring a trusted native speaking local along with you! saludos. buena suertee.
Im a long term resident of the Lake region, and due to family commitments, I dont foresee leaving Guatemala. Im also the owner of a handful of small businesses, and also have other commitments.
First, while I do own property in Panajachel, I actually am a renter. Financially, it makes more sense, and also allows me more room for my business pursuits, as I live in a larger home. (Not that youd ever know it was bigger, as my kitchen has grown into my living room, which also serves as a store room).
Deciding on business opportunities depends on a number of factors. What kind of business are you interested? Food, retail, handicrafts, etc. Secondly, who is your target audience? Locals, short term expats, long term expats, and permanent residents? Do you plan to target your sales locally, or through advertisement, or internet sources?
Do you have a suitable operating capital to weather difficult times? Ill address each of these issues...
Who is your target audience? Remember, this is a poor country. According to multiple sources, Guatemala is the second poorest country in the Western Hemisphere. Haiti is actually number one. Choosing the broadest spectrum of audience is key to success. Dont count on one market, such as expatriates. Thats hit or miss. The expat, or permanent resident population in Panajachel is extremely well established, and if you accidentally step on the wrong toes, or even be friends with the wrong person, youll end up on half the towns proverbial sh-t list before youre even able to catch a breathe. The gossip/chisme grapevine runs like level 5 rapids in the indigenous, ladino and white communities. Quite a few people are plugged into all of the different groups, and hear everything, about everybody.... I happen to unfortunately fall into that category, and frankly I could care less. My time is better spent attending to the task at hand rather than listening to whoever got thrown out of a local bar last night, for fighting. Its not my problem. But many people in Panajachel have nothing better to do, and they assume its their burden in life to share the story as widely as possible.
Now... What kind of business do you want to have. This sounds simple, but in reality, it isnt. As stated above, considering that this is a poor country, what do people need/want, for a price they can afford? If youre targeting locals, or even a lot of the long term population, honestly, they cant afford much. Expatriates run from one extreme to the other. Some are paupers, some are millionaires. Tourists? Great when theyre here, but its wretched when theyre not, which is almost half the year. Answering how to approach this question will lead you into the marketing aspect.
I own a small foods business, largely focusing on natural, and kosher foods. I sell my products wholesale. My business is divided into several divisions, catering, perishable foods, honeys and jams, and dry goods, such as corn meal and polenta. I also do kosher ground meats, beef and chicken. I will shortly be adding a division for cured and smoked meats. Im also the sole importer of lamb meat into Solola department, though I share my fresh whole meat division with a friends company. My mark up is marginal, after factoring in my costs, but I have good distribution, and Im able to cater to all segments of the local community, without bearing the burden of paying rent on a restaurant, and the associated expenses.
I have another business exporting vintage Mayan textiles to the United States and Europe, which I market via the internet. Once again, I concentrate on the wholesale market, and try to sell a dozen of a particular item, rather than charge a higher price and sell one or two at a time.
The key to my business model as a whole is diversification. Do not put all your eggs in one basket. You will fail. I promise!
Perhaps the biggest problem facing a business owner is cash flow. Personally, while I certainly dont eat like a millionaire, (far from it, actually), I certainly enjoy a very good standard of living compared to many people, even in the United States. My personal household budget runs about Q8,000 to Q10,000 a month. Now, my compassionate and occasionally too kind side requires a similar amount per month, to assist people far less fortunate than myself to use the services of a doctor, dentist, buy live-saving medication, and on occasion, pay for a funeral plot or casket. So, lets assume my monthly budget is generally Q20,000, which is about USD$2600.00, or so. In my personal experience, I need to have between Q80,000 to Q120,000 in circulation as operating capital at all times, to accommodate my lifestyle. This is not a factor many people consider, and its a serious commitment, or your business will fail.
I bought a house in Panajachel a couple of months ago. In all honesty, I paid Q20,000 for it. Its not a bad house, and its actually well situated near the market, and almost across the street from the Catholic church. I paid a ridiculously low price for it. Why? Because the seller needed to sell, due to a family emergency, and I had the cash. Total cost of remodeling? About Q3,000. Return on my investment? Within the first year. Several expats looked at it in the couple of days before I did. Within a week, I had at least a dozen calls wanting to buy it. Why didnt they buy it? They had to think about it. I went to look at it, and the accompanying paperwork, which was in order, and legal, and immediately placed a Q5,000 good faith deposit on it, got a receipt, said I needed to go to the bank, and came back 20 minutes later with the balance. I paid the balance, we went to my attorney, and I finalized the transaction, within an hour. Am I going to sell? No. That would be stupid.
Can you make an intelligent business decision that quickly? Are you in a position to take a chance, provided you know the rules? These are questions you must ask of yourself long before you ever even set down to draw up a business plan. This is Guatemala, expect the unexpected, and be prepared for it.
If your intent is to start a business, great. It can be very rewarding. But, dont move with the intent to make money. It doesnt work that way. Come down, live a year or two, get your bearings, become known in the local community, and observe what works, and what doesnt. And then, figure out how you fit into the picture. Chances are, youll discover opportunities you never considered, and youll look back at old ideas, and be grateful they never made it to fruition.