Costa Rica Business – Tips On Starting Your Own Business

New Costa Rica business ventures have a sizable percentage of failures within the first few years.

Costa Rica business failures are normally quite simple to see (it is always easier after the fact) and use of that information will ensure that you don’t make the same mistakes with your Costa Rica business.

Starting your own business obviously requires some specific items related to Costa Rica business management (or any other foreign country for that matter) so here are the most crucial mistakes made by small companies that we can all try to avoid:

1. Stop Procrastinating! Little things sometimes get ignored when you own a small Costa Rica business, paperwork stacks up and often things should get done but don’t. Costa Rica has it’s own bureaucratic ways that you must become accustomed to or, preferably find someone that will help you. You can never hope to get everything done on your Costa Rica Business ‘To Do’ list but as long as you do the things that ‘must’ get done, you should be OK.
2. Never Ignore Your Competition. Your customers will go where they will find the best products and services, so make sure that you are the one providing them with exactly what they want or you will lose them. Keep your eyes on the Costa Rica business competition and if possible, use and adapt their best marketing ideas so that you can keep ahead of the game.
3. Who Exactly Are Your Customers? Most small Costa Rica business people don’t know who their best customers are and how to target them. How old are they? Where do they live? What’s their average income? Family size? Do they all have the same interests? All these factors can have a dramatic impact on what and how they buy from you. Remember that the ‘thinking’ and the decision making process of your US, Canadian and European customers may be completely different from your Tico (Costa Rican) clients…



4. Listen To Your Customers. Once you have them, you have to keep them! Make sure that your customers are happy. How? Ask them! Ask your customer for permission to email them with your ‘VIP Special Offers’ which they will see before everyone else. Use that list to promote yourself, to measure their level of satisfaction ask your customers what it is you must do to improve. Good customer service is crucial and if you don’t give it to them, they’ll find someone who will.
5. Only Hire Quality Staff. Only hire people that are absolutely essential to your business. Train them, monitor them and ensure that they exactly what they are expected to do. If your staff are happy and motivated, your customers will feel that too and will reward you by returning to do more business with you. Firing employees in Costa Rica is very complicated so make sure you know your rights and make sure you have an attorney that understands Costa Rican labor laws!
6. What Is Your USP? You must have a Unique Selling Proposition to offer your clients. Forget about ‘best prices’ and ‘great service’ because that really means nothing. Be specific! What exactly are you promising your customers and how will you guarantee their satisfaction?
7. Effective Marketing. Your children may know that your special, but what about your prospective customers? You must develop a marketing strategy and after identifying your ideal customers, you have to find a way to inform them why they should be buying from you. Your marketing strategy should include your USP and should separate you from the crowd so that a customer can clearly see why she’d rather go to you rather than your competitor.
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8. Flexibility. You may be a great cook, computer technician, translator or whatever it is that you do, but that’s not always enough to make your business a success. Successful business owners must be flexible and be able to do many different tasks, perhaps some accounting, marketing, interviewing and hiring.
9. Suitability. One mistake we see people making in Costa Rica is the successful foreign business man who comes here and starts a completely different business than the one he had been successful at… He may have had a construction company in the US but he had always dreamed of a having his own restaurant. This normally ends in disaster. I would encourage you to stick with what you are good at when you are starting a new business in any foreign country.
10. Location, Location, Location! You’ve heard it before because it’s crucially important! Especially in retail, even if you are the best chef in the world, your restaurant will have a tough time if you insist on putting it in the middle of nowhere. When you’re looking for a site for your business, you must look at the numbers of people that pass by and how easy it would be for people to find you.
11. Cash Flow. You must keep a careful accounting of all monies going in and out of your business. You can not run out of cash! Learn how to make cash flow projections which will help you plan for the future so you’ll know what you may or may not have to invest in more advertising and marketing.
12. Keep an Open Mind! We all have expectations but you should not be surprised if many of them are wrong. I look at it in the same was as I do investing where I say to myself, whether I am right or wrong about the stock market, it really doesn’t matter, as long as I am making money. Look for friends and colleagues that may be able to give you advice, read relevant books and magazines about small business.
13. Plan Ahead! A business plan is invaluable. You must be realistic and as accurate as you can with your business goals. It’s easy to say that you want to make an extra $50,000 by the end of the year but how exactly can you achieve that? Try to write down the specific steps that you must take to meet those goals on time! How many additional sales do you need to achieve that? How many people do you need to walk through the door to make those sales?
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14. Management Experience. Good management skills are crucial. You must have adequate experience in the management and the day-to-day operations of your business or be able to find someone that has that experience.
15. Management Systems. Apart from management experience, you must have a system that will give you accurate information that will tell you what’s working and what’s not. Does one advertisement work better than another? How do you know?
16. Working In Your Business and Not On Your Business. A common trap for many small business owners (including myself) is that they become so involved in the day-to-day operations of the business that they lose track of the big picture and neglect to see that the areas that need drastic changes in order to achieve long term success.
17. Stock Control. You have to ensure you have control over your inventory. You can’t have too much but of course you can’t have too little either. Inventory control requires careful planning.
18. Credit Control. Credit does NOT work in quite the same way in Costa Rica as it does in many other places. Many suppliers will expect immediate payments and will not give credit of any kind and you have to make sure that people that owe you money, pay you. Many small business have failed because one of their biggest and best customers stopped paying them for whatever reason.
19. The Right Team. It is important that you understand in business that you cannot possibly do everything. You will need professional help. A good accountant, banker and attorney in Costa Rica are invaluable and will keep you out of a lot of trouble.
20. Financial Planning. Although income is obviously important, you should not focus only on building an income, you should always be thinking about how to build equity in your business. Why would someone want to buy your business?
21. Style & Personality. Try hard not to be just like everybody else in your profession. At the end of the day, you’re also in the ‘people business’ and you should if you let your style and personality shine through, you will stand out from the crowd.
22. Dedication and Understanding. Building a small business requires determination and a whole lot of very hard work. Many business don’t even make money in their first year and you must be prepared to work like you’ve never worked before if you really want this new business of yours to succeed. Your loved ones must also understand that this commitment probably means that you will all have to make sacrifices over the short term that will hopefully benefit all of you over the long term.

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Written by Scott Oliver, author of 1: How To Buy Costa Rica Real Estate Without Losing Your Camisa, 2: Costa Rica Real Estate Scams & How To Avoid Them, 3. Costa Rica’s Guide To Making Money Offshore and 4. ¿Cómo Comprar Bienes Raices en Costa Rica, Sin Perder Su Camisa?

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Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.