$400k and a tropical dream
Our Caribbean experts weigh in on which island is best for an expat’s bar biz.
Edd, Philadelphia, Pa.
I’m interested in starting a bar or café somewhere in the Caribbean. I have around $400,000 in startup capital and 20 years of experience managing restaurants. I am trying to find the best and easiest island on which to start my business.
By Blake Ellis, Fortune Small Business contributor
We set out to find the best locales in the Caribbean for entrepreneurs, and found a wealth of options for you.
Nerissa Golden, an entrepreneur and host of the annual Caribbean Young Entrepreneurs Symposium says that if you’re looking to make an investment of more than $100,000, the best option for you is to become a naturalized citizen before establishing a company, because being a citizen will make the process much easier. Some countries, such as Saint Kitts and Nevis, offer “investment programs” that allow foreigners to receive citizenship in return for an investment in local real estate.
The first step toward picking the right spot for your business is to visit various islands to see how their economy and culture suits you. Jim Beach, executive editor of InternationalEntrpreneurship.com, rattles off a number of features potential Caribbean expats should evaluate: “Do you like the rich, celebrity filled – and maybe a little snobby – St. Bart? Or the more relaxed St Lucia? Do you like arid places for scuba diving, like Bonaire? Do you want to live with mostly American tourists as customers in Jamaica, or Europeans in Curacao?”
To find the right place for your business, you need to select a spot where you fit in and feel at home. If your café doesn’t fit in with the distinctive atmosphere of the community it’s in, it won’t be successful. Language is also a factor: If you don’t know French, you’ll want to avoid one of the French-speaking islands, such as Martinique or Guadeloupe.
That said, Beach believes Curacao is the easiest place to start a business, thanks to its low crime rates and strong government protections.
“Jimmy Buffet is currently looking for someone to buy a Margaritaville franchise in Curacao, but $400,000 might not be enough to get that up and running,” he says. St. Lucia and the Turks and Caicos are the trendiest places, and “certainly ‘the places to be’ if you want to follow all the development.”
Golden says that St. Kitts, Anguilla, Antigua and St. Maarten are also good options. “They are experiencing a surge in foreign investors, and are very attractive to high-end tourists as well as other vacation travelers,” she says.
However, given the size of your startup capital, Beach thinks you might want to look outside the Caribbean at a less developed area instead. He cites Costa Rica as a hot spot for entrepreneurs with modest capitals.
Michael Stamler, a spokesman for the Small Business Administration, suggests looking at the World Bank’s latest “Doing Business In” report, which examines the ease of starting a business in countries all over the world. Puerto Rico ranks in the top 10 countries globally for making it easy for entrepreneurs to get off the ground: registration paperwork is quick and inexpensive. Jamaica is also a standout for startup efficiency – and none of the countries in the Caribbean have minimum capital investment requirements except Haiti.
Once you select an area, Golden advises you to contact a notary or a trust company to apply for a business license and permit of residency. That process takes between three months and a year, she says.
As you create a business plan, remember Golden’s advice: “Food and parties go together in the Caribbean, so some of your capital needs to be spent on having regular nights of live music or popular DJs or international acts.”
Another recommendation: “When it comes to marketing, research what is most effective on each island, because some islands are more radio-driven, so spending money on print advertising is not the best use of cash. On others with a heavy newspaper readership, print ads get you more bang for your buck.”
Give us your advice: Check out recent “Ask & Answer” questions.
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DiggHello Ed
Roatan Honduras is a going to be more of a cruise ship destination than ever soon.
Carnival Cruise Line is building a new dock that can hold 3 cruise ships at one time.
They are now docking at the newly improved dock in the main town on Roatan that has a
30 year lease with the Royal Caribbean cruise ship line. That dock has new buildings and is also expanding to hold
3 cruise ships at the same time. We talk to the tourists and they all complain how that they are
paying way too much for drinks and are ready to find a bar with some reality priced drinks
for a relaxing day on the beach. That is only part of the story as we have a steady regular and growing
group of regular tourists that come to the island for diving and as a place to live as we have one the best reef system
to be found. There is also a need for more night life here, so there are many options that will work here.
This island has grown and needs more services and Roatan will continue to grow.
All the best
Kevin Stratton
Owner/Broker of Roatan Island Real Estate
And Roatan Island Dream Homes for construction
Office #011-504-445-5034
Cell #011-504-9922-5638
VOIP #1-305-600-0193
Websites http://www.roatanislandrealestate.com
http://www.roatandreams.com http://www.roatanbeachfrontproperty.com
Construction and Home inspections http://www.roatanislandreamhomes.com
Email ridh@globalnet.hn
Hi Edd,
There has been a significant drop in travel and the Caribbean islands that depend almost exclusively on tourist are suffering like everybody else. There is also plenty of competition in this space.
I would recommend that you keep your cash handy and look to see if you can pick up a fast food franchise on the cheap – perhaps from another owner that is in financial trouble.
Your vast experience should help. An SBA loan is what I would recommend and after the new TALF pregame announcements from the government, SBA loans should become more readily available from local and regional banks.
To get an exhaustive listing of banks visit our website and help your self to the tons of free tools and articles that we have for you. CNN Money too has a great many resources on financing that you will find handy.
Regards,
Vivek L
http://www.smallbusinessplanresources.com
I think you would be nutz in this economic downfall to open anything like that in the Caribbean.
Hawaii is the best place
all you have to do is grease up the syndicate (local mafia) and all will be well
Puerto Rico is part of the United States of America!
I was a Peace Corps volunteer in Jamaica (76-78) and have traveled to many islands. I would suggest you live in an area and get a job there to determine your risk. Analyze how business responds to tourist trends.
The present world economic downturn could make it difficult for starting new businesses. Many island governments can be bureaucratic and slow to respond. Living for a while could make you think twice about investing money. You could also join the US Peace Corps.
http://www.peacecorps.gov/index.cfm?shell=learn.wherepc.caribbean.easterncaribbean
Here is a blog on PCV’s today:
http://gregorymeves.blogspot.com/
I served as a US Peace Corps volunteer for 2 1/2 years in Saint Lucia focusing on economic development. Speaking from experience for the EC I think it is more of the fantasy to live in the Caribbean than practical reasons that motivates peoples desire to set up business, particularly a bar or cafe. Even as someone who has lived on the island all your life who understands the culture it is very difficult to open up and run a successful business. Yes, the islands are laid back and a wonderful place to lime, to go on vacation, but carving out a living is a different story. The process of getting your paperwork together, importing your equipment and paying the importing duties is difficult, time consuming and costly. I would recommend a different approach, consider volunteering through many of the different agencies/charities/non-profits available in a prospective country you would like to potentially open a business in. In the process of serving as a volunteer you will get to know the people and develop business contacts while doing great volunteer work. This will help you make a better more educated decision. Best of luck to you!
I think that Dutch St. Maarten would be a good bet. Great infrastructure and a thriving tourist industry even in this tough climate. In addition, English seems to be the most widely spoken language on this side of the island. If you can find a way to attract the hundreds of American cruise ship visitors coming ashore each day who want to do something else besides shopping in Phillipsburg and if you have an attractive location, you should be able to generate good business.
DO NOT OPEN A RESTAURANT NOW……YOU HAVE TO WAIT UNTIL WE ARE GETTING OUT OF RECESION…. I have a small restaurant and I sold more than 100k in July. Now I am selling about 30k montly and decreasing…..
Don’t overlook the inherent racial tension in the islands…many locals resent “wealthy” whites (and even african americans) coming down there and opening bars and pubs (even in the USVI). If you cater primarily to tourists you’re better off. I lived 10+ years down there in the hotel industry and it wasn’t always easy. You won’t get the big smiling welcome the cash loaded tourists get if you’re coming down there to live. I’d give you a list of islands to avoid, but they probably won’t print it.
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