Location is a huge part of success in business…particularly when you’re dependent on foot traffic. When Cody Leigh Brown of Montana decided to set up a tea shop in Ecuador, she chose Cumbayá, a fashionable suburb of Quito, as her location. It just happens to be home to the Universidad San Francisco de Quito, where more than 5,000 students are enrolled.
And no-one likes to sit around sipping beverages as much as students.
“The business became a success primarily because of our proximity to the university,” admits Cody. She calls the tea shop Bigoté—a play on the Spanish words for tea and mustache. “When I arrived to Ecuador, I spoke no Spanish, and we were throwing around names. Bigoté stuck because I loved the light-heartedness of the mustache, as well as the implication of tea in the name.”
But it’s not just students who have made Bigoté a success. Cody also has a strong customer base among business professionals. She got in on the beginning of a trend towards healthier beverages that’s taking off in Ecuador—and the rest of Latin America. “People in our community are becoming more health-conscious and tending to opt for healthy food and beverage options,” she says.
In addition, Cody notices a desire among consumers to support a small business over a big chain. “These days we have a loyal client base of wonderful university students, young professionals, and people who find it important to support local business instead of gigantic national chains,” she says. “I feel so lucky to work behind the bar and get to know the community.”
It hasn’t been all smooth sailing, and Cody now looks back at the efforts she made to set up the business with an element of awe. However, the one thing she had in her favor was a passion for her product. Cody’s travels had begun in the home of great tea: China.
“Before Ecuador, I had been living in China working on a photo-documentary project following the process of turning bamboo into clothing,” she says. “I adored the fantastic tea culture in China. I used to frequent my neighborhood tea stalls and sip steaming jasmine tea in the parks in Chengdu.”
After moving to Hawaii, where she had also lived for a time, Cody met Ecuadorian Andres Sanchez, who has since become her husband. “Andres and I would drink yerba maté every morning before our daily surf session while living together in Hawaii,” recalls Cody.
“From those beloved moments in our lives stemmed the idea of setting up a bar of infusions here in Ecuador. He had been planning on coming back to Ecuador and invited me to come explore with him. I was at a perfect point in my life for more adventure and setting up our business was more of a casual idea than a super intentional business move.”
Setting up the business then began in earnest. Cody and Andres found a small plaza in Cumbayá at the entrance to a shopping center. Negotiating the contract was a bit time-consuming, since they were renting from the shopping center, and it had strict limitations on what they could sell. The process ended up taking several months.
“Our initial investment was under $50,000 because we did everything ourselves,” says Cody. “I did the graphic design, and we handled our own import logistics. With the help of some friends, we literally built the concrete bar with our own hands. We didn’t initially invest in powerful machines, but we ended up upgrading almost immediately to commercial equipment such as a commercial refrigerator and espresso machine, which set us back another $25,000 or so.”
Then there was the matter of supplies, which had to be imported. “We initially brought in a half ton of certified organic yerba maté from Argentina, various types of exotic teas from China, as well as some machinery and dishes,” says Cody.
“We spent hours learning how to import for the first time in a country where the amendments to import laws change daily. Looking back, I’m amazed that we went this route—and actually succeeded—since the process of importing goods in Ecuador is complicated and quite bureaucratic.”
Cody went through the same process that many North Americans do when they move to another country and learn to cope with administration that is not always straightforward.
“Much of the legal process of getting permits and legal documents is still done on paper with stamps and signatures, so navigating the legal system and its inefficiency can be trying at times,” she admits, “especially coming from a country like the United States and being accustomed to finding straight-forward information regarding processes online. I had to get used to the lengthy and mostly frustrating process of having to go to an office, take a number, and wait half the day just to get the answer to a question.”
But for all of that, she is glad she persevered. “Ecuador can be a great place to do business if one has a lot of patience and gumption. Luckily, our business did well from the beginning. We didn’t really know what to expect, of course, being new business owners, and hadn’t made any real projections except that it was going to be a learning experience. We didn’t do any marketing—and still don’t really. We just have a good atmosphere, good healthy products at a good price, and a great location.
“We began with just a tiny bar and four tables, and did all the cooking and baking at our house. We didn’t even have a bathroom or sink to offer customers. We invested in remodeling the office that is connected to the plaza we rent and turned it into a production center. And luckily we now make enough to pay off our loans, pay our employees, and live a happy life here. We are pretty frugal, though.”
Cody and Andres have now been in business for three years and are doing well. “I see a number of new types of businesses popping up here. Ecuadorians have long loved shopping centers for eating and leisure and two gigantic malls have just been built, here in our local community. However, many of them have the exact same set of international restaurant chains or gigantic multi-million dollar companies. Perhaps I am just surrounded by conscientious consumers, but I am noticing a shift in the preference to support local small businesses.
“I would suggest anyone considering making a move—especially for setting up a business—to move to the country and get to know the language and culture beforehand. Not only will it help in creating a more culturally-appropriate business plan, it will give one the idea of what life is like in that country. I think it is critical that one is passionate about both their work and the community in which they live.
“What I really love about this country is the country itself! There are so many amazing things to do and see and a great variety of cultures—from the coast to the jungle. I love being able to head to the beach for an extended weekend surf safari or down to the Amazon basin to hang out with friends and take a dip in the emerald rivers—in between Quito city life!”
Setting Up Business in Ecuador
By Dan Prescher
For expats starting businesses in Ecuador…or anywhere else for that matter…there are a few essentials that should never be overlooked.
Hire an attorney. This is most important for taking care of the other essentials on this list.
• Moreno di Donato is a bilingual boutique law firm dedicated to consultancy and legal sponsorship of general practice. It has offices in Quito and Manta. Contact: Robert Moreno at email@example.com
Make sure your visa allows you to legally do the business you have in mind. There are business categories in nearly every Latin American country that are reserved for citizens only.
Make sure you have ALL necessary permits and inspections, and that they are kept current.
Make sure you stay current with all taxes, fees, and special assessments.
If you are setting up a professional services business make sure you have all necessary local certifications. Don’t assume any license or certification you have from another country, including the U.S. or Canada, allows you to practice in Ecuador.
If the business involves importing materials of any kind, hire a competent customs broker…at least until you learn to navigate the local customs regulations and officials yourself.
Some types of businesses in Ecuador require foreign owners to hire a certain number of local workers. Make sure you know how many and exactly how to pay their required vacation allowances, bonuses, and contributions to the local social security system.
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