Saturday, April 13, 2013

Starting a business in Brazil – some tips

First, as my 77 year old Brazilian father-in-law and previous business owner used to say (may he rest in peace) “Be careful what you wish for.”

Should I start with the positives or the negatives? Oh heck, I’ll dive into the starry eyed positives as seen by this newcomer through his rose colored glasses. Luiz and I traveled to Brazil many times in the years before we picked up and moved here. During that time I had one eye looking out for business opportunities – and thought I saw many sure things.

Like: we could open a Mexican restaurant/taqueria. Cheap ingredients, hearty food, great take out for working people and the taquerias in San Francisco ALWAYS had a line out the door. Easy peasy.

Or maybe Luiz should take his formal education and international training as a floral designer and open a flower shop with event flowers as a featured service. We went so far as to produce a beautiful website, brochures, note cards and brought a ton of specialty items to make his arrangements pop.

How about an import/export business? So many things are cheaper in the US. We could import them to Brazil. And there is a rich art and fashion pulse in Brazil that would surely appeal to US Americans.

Best of all, we could find a tiny coastal village just beginning to get noticed and open a tropical paradise bed and breakfast (pousada). We would make it a cut above and appeal to the international travel set and the expanding middle class of Brazilians taking family vacations – all the while sitting on the beach sipping chilled coconut water and telling our housekeeper and pool boy what to do next.

Then our plane landed in Brazil. We moved into our apartment and, once we got our bearings, we started to investigate the possibilities for real. (Here comes the negative part.)

Truth be told, we did not move to Brazil to start up a whole new chapter in our life growing a business and working too much. As far as 60 hour work weeks go – been there, done that. So we scratched most of our fantasies and focused on our “unfair competitive advantages” e.g. Luiz’s international floral design expertise and my being a native English speaker from the United States in a country that likes those kinds of English teachers.

It became immediately apparent to us that Brazilians are very clever, hardworking and seasoned (not to mention cut-throat) entrepreneurs. In a land with a history of minimal (honest) opportunities to earn a substantial living and one with a byzantine legal system that regulates and taxes (or charges fees for) just about everything, as outsiders we were at a decidedly woeful disadvantage in the mainstream of building a successful business. Knowing how to manage the system and flourish within a web of personal connections is baseline. These are insights and relationships generally out of reach to most newcomers.

As an outsider I could see so many ways that businesses could be made more efficient or otherwise improved, or so I thought, only to learn that government regulations, bank loan interest rates, taxes, labor laws, the availability (lack thereof) of skilled workers with an earnest work ethic, taxes, local corruption, near closed business environments in some competitive areas, and taxes were the real culprits.

To my friends looking to move to Brazil and open a business I say: welcome, good luck, and start looking for a good lawyer and a “fixer” to help you get started. I’m sure it could be a breeze for some, I just have never seen evidence of that. I prefer my rosy glasses and chilled coconut water on the beach.

So we bailed on any thoughts of a pousada or an import/export gig from scratch. Luiz has found his niché in flower design working in “permanent botanicals” showcased at the weekly arts fair in the park and designing for individual clients.

Over time our musings about opening a lunch and dinner Mexican restaurant have morphed into launching a food truck specializing in wraps of all kinds. This addresses the reluctance among locals to try “different” foods. We could produce a “Carioca Wrap” or a Mexican inspired burrito with carne seca, or maybe a Bahian inspired spicy seafood wrap. Also, the truck eliminates the need to rent space etc., we would not have to hire people, and we could move it around to where the people are (festivals, street parties, nighttime hot spots, etc.) But still there are the regulations, licenses, taxes and turf power brokers. That beach still looks pretty good to me.  

I have settled into a comfortable work schedule (including the afore mentioned beach, glasses and beverage) as an “English Polisher” for adult professionals preparing to present at an international conference or about to ship off to the States for a 6 month work gig. Doctors and lawyers are always looking to improve their English speaking skills. Students headed for graduate school in the States always want to speak better. And my sometimes favorite: bored rich housewives preparing to go on a shopping trip to New York City are sure they need specialized vocabulary assistance.

All that said, here are a few new ideas for a bright and overachieving entrepreneur looking to make a go of it here in Brazil:

-          -  Running a mobile copy service: a cart you can park in front of the Federal Police office, the Notary Public, the Consulate, etc. Visitors to these offices always need additional copies of some document or another and the offices themselves do not make their copy machines available.

-         -  A private parking and traffic enforcement operation. In the past five and a half years I have never seen a city official write a parking ticket or stop a driver for even the most egregious driving offense. Of course, you would have to convince the local government to outsource this function – but believe me, it would reap a fortune for all stakeholders.

-        -  Full service business consulting for expats looking to beat Brazilian entrepreneurs at their own game. To put your clients at ease, put a pink light bulb in your desk lamp and serve coconut water in your office cooler.

I’m sure other expats who have been here a while would have a few suggestions and/or a cautionary tale or two.


Lisa said...

You're right, hiring a lawyer to ease your application for business license and everything you need to know about their laws and regulations.. you never know, your food truck might evolve into a very fine restaurant in just a year. Good things happen for those who believe. P.S. that square-wheeled bike distracted me a bit.

GingerV said...

I always thought that exporting would be better. taking local art and handmade furnitures to Houston - actually I thought that annual trips to All of SA to bring back art and handmades and then have a shop / decorating /art here would be great. For example the soap stone art of Ouro preto - lace of Recife and funiture art of Tira Dentes would do well here.

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Corey Richards said...

Starting a business in another country is a challenging one. You would really have to learn about the country—from their culture to lifestyle. Second, you'd have to study their government's policies and laws especially the ones that may affect your business. Labour laws will have to be kept in mind, as well. Anyway, thanks for sharing your thoughts about this. Regards!

Perry Belcher said...

Great tips.. Before starting an import export business contact country's taxation department to ask about procedure and other rules to start an import export business