Starting Your Own Business in Mexico

When I went to Mazatlan, Mexico for a random vacation in the spring of 2006, I wasn’t thinking of starting a business there, let alone thinking of moving there. But within a year of that first visit, I’d quit my job as a reporter, packed up my car and moved to the “Pearl of the Pacific,” determined to follow what had become my dream and give it a go. Twelve years and two successful business ventures later—a monthly English magazine and a weekly organic Farmers’ Market—I can say with confidence that starting your own business in Mexico is not as impossible as you might imagine.

While statistics as to how many foreign-owned small businesses there are in Mexico are limited (and confusing), from my experience, I’d wager there are more than you’d think. My magazine was full of ads from businesses and service providers, a good portion of them expat-owned and operated. And as more of us Baby Boomers head south of the border, that number is only going to increase.

It’s not for everybody, but if you’re one of those expat “retirees” with an idea that won’t leave you alone, I’ve put together some tips to help you get started creating your dream job in your new home.

Define Your Terms.

When people retire to Mexico, they’re often imagining a carefree life of days spent with friends relaxing on the beach, with no work obligations or responsibilities. But you may find you still need something worthwhile to do with at least some of your time. Maybe you’ll volunteer to teach English to local kids, or be part of an animal rescue group; there are many charitable organizations for expats to get involved in.

However, you may be surprised to find your mind filled with ideas for businesses that could be successful and that you see a need for in your new community. Take some time to think carefully about what you really want your new life to look like and try to be open for that to change. How much time do you really want to give to your great idea—which could also be called “work?” Once that’s clarified, you’ll know whether to go forward with it, to what degree, or not at all.

Vancouver native Heather Wanless had worked for over 20 years as a sales rep before she retired to Mazatlan. Within a year, she said, “I was so bored I was going crazy.” Friends encouraged her to open a restaurant and serve the traditional American foods she was so good at making.

“Nobody was doing this,” she recalled. “No one was selling “comfort food,” and there was definitely a need. Plus, I needed a new challenge.”

‘Heather’s Place,’ the restaurant she opened, was a resounding success for a decade before she sold it. Again, Heather started looking for something to do. “I’m driven. I have energy. I like to be busy,” she laughed. So, she became “Heather the Pie Lady,” selling sweet and savory pies and baked goods at several open-air markets around Mazatlan each week.

“I made the little pies and they sold like mad,” she said. “It’s perfect for me. I can bake at home, without the hassle of having employees. My only stress now is how many of each do I make?”

Find Your Niche.

Look for the opportunity to provide your community with something they need or want, like Heather and her restaurant. That will be the basis of your success. Business ideas that wouldn’t work in the U.S. or that have already been done to death could be key in Mexico—and you can be the trendsetter. Know that whatever business you decide to pursue, the fact that you speak English is a big plus. What are people saying they wish they had, or wish they could do?

That’s exactly what happened to Marianne Biascotti when she arrived in Mazatlan in 1996. Her husband had a great job opportunity, and the couple had moved from California’s Bay Area for what they thought would be a few years.

“I remember my shock when I found there were no cafés and no good coffee,” said Marianne. “My favorite café was always my place to meet friends, hang out, or sit and read. Besides real coffee, what I really craved was a place I could go and meet people, locals and other foreigners who were also new to the city and culture.”

While there were lots of bars and restaurants, at that time there wasn’t a “coffee culture” like there was in the U.S. It took Marianne three years to stop waiting for “someone else” to open the kind of cafe she wanted, and do it herself.

“I realized I was that someone, and did it,” Marianne laughed. Fast forward 18 years and Rico’s Cafe has become one of the most popular cafes in Mazatlan, with five locations and a full menu of Mexican and American foods, pastries and of course, coffee, and espresso drinks. Her children have grown up working at the cafe, learning valuable business and people skills in the process.

In my case, I knew people wanted not just to know what was happening around town in their native language. Although print readership may be declining, expats everywhere and people of a certain age want to read in their native language, and many of us still prefer paper. Yes, there are Kindles and websites and blogs, but nothing replaces a well-put-together print publication you can hold in your hands and read.

Other examples of business opportunities are computer repairs, dog-walking, or cat-sitting? Or does your town have a weekly open-air or farmers market, and is there a specialty product you can make to sell? (Think granola, perogies, jams and jellies, pies) Can you fix things? Lots of people nowadays are making extra money by renting an extra bedroom or apartment through Airbnb. Do you have a hobby, like yoga or Pilates, you could teach classes in?

Consider what you can and are willing to do, as well as what the customers want. For instance, you may love kombucha—but will anyone else?

Hire An Accountant (Notario)

It’s much easier to start a business in Mexico than it is in the U.S., even for a foreigner. Yes, the process is complex, often confusing and even irritating—but not impossible. Luckily, there’s someone to hold your hand through all of it, who is in fact legally required to do just that.

To do business in Mexico, you’re legally required to have an accountant; if you want to run it as a corporation, then you’ll also need a Notario Público (not the same as a U.S. Notary Public), but you can also operate as an individual, (Persona Fisica), like an Independent Contractor. Fluently bilingual, Rodolfo Kelly has been a Certified Public Accountant for more than 35 years, he says “your accountant will guide you through the process of registering and running your business and can advise you whether to operate as a Persona Fisica or a corporation. There are forms to fill out and in-person meetings with Hacienda (the Mexican I.R.S.) to verify your identity and immigration status and give you an R.F.C. number, which allows you to legally operate your business. You must open a new Mexican bank account and register it with them, which you’ll use to issue facturas—legal invoices—for all of your business expenses, adding an additional 16% to those costs. This is done electronically, through your accountant. And, should you ever be audited, your accountant would represent you.”

This is the person who handles your tax payments and liabilities and your liaison with Hacienda; he files your monthly and annual taxes, your employee payroll and IMSS obligations (similar to Social Security), plus other tax legalities. Costs for their services will vary depending on how complicated your business is (a restaurant with many daily receipts and purchases takes more work than a small owner-operated business), how many employees you have, if any, and your filing status (independent contractor versus. a corporation.)

“In the case of a corporation, a notario guides you through the process of registering your business in the Public Register Office,” continued Rodolfo. “While he may give advice, it´s always your decision what you’ll do. The notario’s obligation is to be sure you fulfill all legal requirements.”

I can’t stress enough the importance of having a reputable accountant you really trust and feel comfortable with. And since they’ll be working together, he can also recommend a notario. Unless you speak Spanish fluently, I’d strongly suggest someone who speaks perfect English. How to find an accountant? Ask other expat business owners who they use. Established local business owners can be a good resource, too.

Make A Business Plan.

It doesn’t have to be fancy or even complete, but you want to have this foundation to refer to as you set up and run your business and there are lots of free templates online. Add some specifics relevant to this business—and the fact that you’re in Mexico. Thoughtful Vision and Mission Statements will also give you direction and keep you on track. No matter how much you plan and prepare, there will always be unexpected situations, decisions, and opportunities that come your way, and having a solid, detailed business plan will help you meet these challenges with confidence.

Because you’re in an expat community, certain things will be very different. I’d suggest making a policy right away for how you’ll handle non-profit and community groups, and then do your best to stick to it. Decide on any discounts or donations you want to do each season or annually. This will help prevent uncomfortable situations which can, in a small community, end up reflecting badly on you and your business. With my magazine, I had a discount rate for non–profits or fundraising events that wanted to advertise.

Like anywhere else, you need to know your market. Who’s the competition? What are their strong and weak points? How can you improve on what they do? If there is none, take the time to plan carefully and give your customers what they want.

You’ll also want to research what development is on the horizon for your area; a new highway that shortens the driving distance from a bigger city may increase weekend visitors, especially now that Mexico has instituted “puentes,” three- or four-day holiday weekends. A new sports center or theater complex, city park, or pedestrian mall can all change the demographics of who and how many people could potentially be your customers, as can an airport expansion or new flight schedules.

Who Are Your Customers?

Obviously, this is crucial. Some, if not most, of your customers will be expats. In your area, where are they from? North Americans from California will have very different sensibilities and needs than folks from Minnesota or Arizona, and Canadians from Calgary are not the same as those from Vancouver or Montreal. Observe your expat community for a season or two: Are they all snowbirds, mostly full–timers or a mix? What’s the average age and income bracket? Will vacationers and cruise ship passengers be part of your targeted demographic?

Are there high and low seasons, and will you stay open or provide your service year-round or just seasonally? The first year I published my magazine for 12 months, but by the time the second summer rolled around, I’d realized that was pointless. There were very few expats around, and advertisers didn’t see any reason to pay for publicity. So I began publishing only from October through May—a much more logical (and profitable) plan.

“You can think outside the box when opening a business in Mexico,” said hairdresser and author Debbie Rodriguez. She opened Tippy Toes Salon in Mazatlan in 2011, and now has 12 employees in her full-service salon and spa. As her career as an author has grown, her staff has taken over more of the salon duties to allow her time to travel and do research for her books.

“My business has given me a chance to meet a ton of new people, both Mexican and foreigners, and the friendships I’ve made via the salon are life-long,” said Debbie.

Depending on the type of business, there are probably locals in your community who’ll be interested in what you’re doing, too. At Rico’s Cafe, Marianne found that having a solid local customer base is what enables them to get through the slow summer months when the snowbirds are gone.

Make It The Best.

The better the quality of your product or service, the more you’ll attract customers. While this goes without saying, the Mexican mood of “manana,” as well as the fact that most of your friends and customers are retired and not working can easily affect your previous business standards. Sound silly? Watch and see.

Retired expats also love to give advice. Try not to listen to what everyone says you “should” do —stick to your vision and look for professional advice and inspiration when you need it.

Saturate Your Market.

Be omnipresent. Seem basic? It’s different as an expat, your community is smaller and more close-knit. And you may only have a six–month season; you need to hit the ground running when it starts.

You’ll want to schmooze mercilessly. (Polite people call this networking.) Lloyd Goldstein turned his photography hobby into a thriving micro-business in Mazatlan. He’s part of the city’s monthly Artwalk, exhibits at local galleries and even does custom work. He and wife Nancy are familiar faces around town, at charitable events, the theater, coffee shops, and restaurants, etc.

“Whatever business you’re involved in, networking is key,” said Lloyd. “Mazatlan is a large city but a small community. And don’t be afraid to ask questions.”

You may also need to use social media, depending on your customer base. You may not need Instagram, Twitter, or even a website in Mexico. Facebook and WhatsApp are the primary ways to network and communicate, even professionally. You’ll likely want a Facebook page that’s active and responsive that you can also use for inexpensive advertising to reach new customers.

Having your own business is not for procrastinators: Answer emails and messages as you receive them. Follow-up with every lead immediately. Remember, there really is no time like the present.

Stay the Course.

It won’t always be easy. There’ll be times when shipments don’t arrive, clients don’t pay, banks are closed for unexpected holidays and nothing goes as planned. As a small business owner, “Chief Cook & Bottlewasher” will become your middle name so wear it proudly. Over time, you’ll develop a system that works, your team will become a well-oiled machine and you’ll amass a stable of steady, paying clients. I found that most expats are incredibly loyal customers if their needs are being met, and they’re happy to support “one of their own.”

Noah Lentz moved to Mexico seven years ago and started using a drone to film his family on vacations and during birthday parties and other celebrations. Now he does custom videos for weddings, special events, real estate firms, and even the local tourism office.

“It’s fun to be able to have the opportunity to be creative, and in Mexico it’s cost-efficient to start your own business,” said Noah. “This started as a hobby, then people began to ask me to film for them. Little by little I honed my skills, and now I have all the work I can handle.”

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