Chile Forum

Gregf- the problem here is you apear to be making your comments based on how things appear to you; my comments were made from my own specific experiences as a cafe owner in a fgood party of Providencia and also those of others who had the same problems. I also couldn´t believe that people who turn up in nice business suits, wouldn´t be able to drink coffee every day, but each month was the same, just before 15th and also the end of each month, I noticed a drop in those kind of customers, or alternatively they would drink an espresso instead of a capuccino. These people who you see wandering around the expensive areas , in general don´t always have the kind of cash you think they have. Chileans like to put on a show, but at the same time, live most of the week on pasta so they can " be seen" in the good restaurants at the weekend. There are obviously many restaurants out thare that do well, but I suggest that anyone thinking of getting into the catering side, goes in with their eyes wide open. Getting yourself a " good local jefe" could also be your best way to lose money. You probably also have no idea as to the sky high rents that apply to places suitable for cafes in the centre. The chains like Cafe Caribe, Cafe Haiti, do fine, but they´ve been here since at least the early 80s. It can be entertaining in the cafe/restauarnt business but it´s never going to make you rich.

Some good posts here, both ways. As part of our tax business in the US, I see LOTS of numbers, lots of businesses and how they REALLY do, as opposed to what's put on for public show. Some thoughts:

1) The restaurant business is extraordinarily competitive. Lots of work, high failure rate. Part of the high failure rate stems from so many amateurs getting into that business because it is their "dream"....and often nightmare.

2) In every business, no matter how hard, I see people who succeed in a major way, even while others are failing all around them. They are not necessarily "better" people than their competitors, they are simply better at that business.

3) A foreigner has a disadvantage by not being Chilean or familiar with Chilean culture at a gut level. This would especially important when deciding what would draw Chileans in and spotting good employees....read carefully what has been posted in re Chilean work ethic and respect for property. Making the easy and quiet assumption that Chileans think as you do will get you in trouble (I still do this with the wifey sometimes, ouch). Foreigner advantage would likely include efficiency, ability to provide excellent customer service (perhaps even train Chileans to do the same), etc.

4) I think bringing in a very, very carefully chosen Chilean to help as high-level employee (ala pareja of prior poster) makes massive sense. The trick is of course to find the right one. I would plan to start the business with $100k only, keeping the remainder as a reserve, and keeping absolutely ruthless track of money - right down to monitored cameras over the cash register, a roving Chilean female employee with a sharp eye and a harpy's attitude (run a search as to why a female), etc. I would also have monitoring throughout to reduce pilferage, especially on well-stored high-end items (e.g. alcohol). My wife's family owns and knows bakeries in Vina, they do well with them. We have thought of investing in same and would never, ever do so without one of them involved probably as a partner.....and even (or especially!) with family, we'd choose partners/employees very carefully and make all the terms very clear up front. You must have absolutely excellent monitoring and control of money in any business, that goes triple when dealing with Chileans. The typical approach of entrepreneurs of "I need to make money and do not have time for admin crap" will kill a business, especially in Chile.

5) You might talk to the Austrian owner (married to a sharp Chilena who always has her eye on everything) of El Austrico and the Belgian owners of Ciboulet (they do everything, no employees at all), both in Vina.....of course, they would have to be approached in the right manner. I found them quite willing to chat after a warm-up period (eating there, etc.). Doubtless, other such people exist. Do your homework, take your time. You have one, maybe two, shots in your gun. Do not fire until the little red dot is exactly where it needs to be.

John Hyre, Busimess Dude, With the Bruises to Prove It

JHyre- very good overview; I agree with you entirely. You summed it up in a nutshell

rikstar wrote:Hi, I have a US 200k to purchase a small to medium sized business in Chile(Bar,cafe,restaurant,hospitality industry), I was wondering if that amount could buy a decent business. By decent I mean a good net, I understand Chile has favourable tax laws concerning companies, so that is a plus, but I am pretty interested in the net factor. In my previous business I was netting roughly 10% of my gross sales, so 15000 per week would make me 1500 (before income tax) in the hospitality industry we roughly make 10% after all bills wages taxes and so on,(we have a company tax of 30%).What I am hoping to find out is with that amount of money can a decent income producing business be found in Chile.
p.s also, just out of curiosity, are the cafe with legs money makers or not?
Thank you any help would be greatly appreciated.

cafe with legs wins money even in poorer neighbours. but i will never be in that bussiness. to me the better business in chile is touristic wich is very underrated right now. go to la serena buy many apartments and rent it by day

the other idea is get more money and take a starbucks franchise they are growing in chile instead of the developed world when they are closing places

eeuunikkeiexpat wrote:I guess you don't understand what a good local jefe/jefa de control can do for your business. I can see why you bailed or failed.

BTW, the most profitable operations my pareja saw are owned by foreigners. One was a "white" Peruvian, the other by a Spaniard whose corporation runs a number of restaurants in town primarily Centro section but of course both had nearly all Chilean employees and thus were essentially Chilean operations.

And don't underestimate what the competition may do including calling / coordinating with? the local Pacos for the slightest alcohol infraction to setting up a robbery.

the third idea is getting a lot of peruvian ilegal inmigrants and put them to cook. peruvian restaurants are booming in santiago and most of them have low paid handworkers.