An Insiders take of the restaurant biz in Ecuador

Something about Ecuador ignites the entrepreneur in all of us.

As my Ecuadorian mentor once told me, “people in Ecuador are more entrepreneurial than in a country like the US because they have to be, there are less decent employment options so you got to employ yourself. ”

I´d agree.

And this week, I´m going to interview my good friend Amir, who moved to Ecuador last year from Canada, and has since started a pizzeria in the Quito (Cumbaya) area.

I met him when he was a new arrival “right off the boat”, if you will.

Enter Amir… 

Amir, tell us about your restaurant?

Sure, the name is MegaPizza and we serve top-notch Italian-Canadian cuisine like pizza, putin, salads, subs, wings and more at reasonable Ecuadorian-style prices.  Specifically, we’ve got the best subs and pizza in all of Ecuador (Note from Domenick: I’d agree.).  The restaurant is right between the main park of Cumbaya and the San Francisco University in one of the top restaurant districts of Quito.

So Amir, why’d you choose Ecuador for living and your business?

Well, its warmer than Montreal, residency is pretty easy, taxes and rent are low comparatively and so are most of the costs of living.  In Canada it was too pricey to start my own place.  A restaurant like mine would rent for $4000 or more per month, utility bills would be several hundred dollars a month and employee costs would be several thousand a month.  In Ecuador, rent, utilities and employee costs are dirt cheap and you don’t have to worry so much about peripheal costs like insurance while at the same time I’m still charging about the same as i would in Canada for my product.

Why’d you choose Cumbaya for your pizzeria?

I like the warmer climate when compared to nearby Quito (30 minutes away) and it is an affluent neighborhood and lots of residences ideal for delivery. We have acquired licenses and various other documents for the region, including pay as you go food delivery insurance, and are slated to start very soon.

What were your biggest challenges when starting and running the business?  

The biggest challenge was finding a good place to rent for the business.  It took several months of checking the Internet ads in Spanish, the newspaper and driving around scouting out areas.  A lot of decent places that were available were offered not by the land owner but by the restaurant owner who wished to sell you their business, furniture and lease, often for upwards of $60k or more.  When I already knew the business and knew what I wanted to do i was not interested in buying someone elses know-how and used equipment and furniture.

Finally, we found a large empty locale and inquired with the caretaker and found out it was available, it had no sign, thats how you can often find the best deals in Ecuador.

Also, obviously communication was an issue cause I don’t speak Spanish well.  I took a one-on-one class in Quito for about two months when I first arrived for $6 an hour and that has helped a lot.

What are the lease terms like for your restaurant in Ecuador?

Well, my lease is for one year only with a security deposit equal to one months rent.  The rent is $1500 a month.  The locale has about 6 parking spaces and 90m2 of dining area plus an outdoor patio with capacity for about 50 people (about 15 tables).

Where’d you find your kitchen equipment and furniture needed for the restaurant at the best value?  

Honestly, searching on the Internet in Spanish helped a lot. I knew what I needed cause I worked for many years as an employee of top restaurants in Montreal.  I found one distributor online in Ecuador where I bought most of my kitchen equipment PROMAINEC.  For instance, we bought all new stuff… a 2 door industrial fridge was $2200, the pizza oven $1700, the dough maker $1200, and the stove-grill-hotplate all in one from the LOZADA store in Quito was $1200.

The wooden tables and chairs were ordered custom maid by a local carpenter, they came to $36 for each table and $40 for each chair with a seat cushion built in.  Those were the best prices we could find, it was much better than buying ready made tables and chairs from a place like Megamaxi or Mi Comisariato.

What was the total investment to get your restaurant up and running from scratch?  

Including the security deposit for the lease, about $20,000 USD.

Where the permits difficult to attain?  What permits are needed for us newbies to the business in Ecuador?  

Actually, this part was very easy in Ecuador.  It all starts with the SRI (the IRS tax agency in Ecuador).  You need to get a RUC or tax ID number (free).  Once you have that you need to go to the IEPI or Institute that copyrights Intellectual property in Ecuador to register your company name and logo ($115).  Then you have to go the Municipal and apply for your LUAE or license to operate.  After application they will send inspectors to pass your business, first the firemen (bomberos) and then the health department (salud) and Secretary of Tourism.  After passing the inspections you can pay your annual Municipal patent (patente municipal) (varies by business type and location, around $100-250 annually).  A special license to sell liquor does not seem to be necessary in Ecuador from what we have gathered (we’re still confirming this one).

Where do you source your ingredients and food?  Whats cheaper and whats more expensive compared to Canada?

This part was more tricky in Ecuador than in Canada where one phone call can get you everything you need within a few hours.  The big things like flour and cheese we buy in bulk from distributors we found online.  We had to test the quality of several before we found ones we like.  The prices of things like pizza boxes varied greatly so shop around before you commit.  We often would take the phone numbers of the distributors off the labels of the products in the supermarket chains.  We’d stop the trucks delivering supplies and drinks to stores in the street.  The little things like jalapenos can only be found in the top-end supermarkets like Supermaxi, so we buy those there.

Chicken and fresh produce vegetables are much cheaper in Ecuador than in Canada.

Some things are more expensive in Ecuador, like pepperoni which is $5/kg in Canada while $13/kg in Ecuador.  Some things are cheaper like cheese which is $22/kg in Canada while $7/kg in Ecuador.

What are some interesting things you’ve learned about selling food to Ecuadorians?

Ecuadorians don’t drink much coffee compared to North Americans.  They love hot sauce.  And they’re surprised by all the different pasta options we offer like tomato, pesto and alfredo sauces, but in a pizza shop they usually ignore our fringe offerings and go right for the pizza.

How did you find your staff?  

Well, my friend and I started the business, we are the cooks for now, and my friends brother moved to Ecuador as well to help out.  We hired one waitress to attend the clients and answer the phones (since we dont speak much Spanish).  We pay her $400 a month plus tips which is a bit over the minimum wage in Ecuador for a full-time 40 hour a week employee.  We found her quickly by placing a classfied ad in the Quito Sunday newspaper.

What are your profit margins like for the food you sell?  

Well, if you don’t count the fixed costs like rent and so forth , just taking into the account what we pay for the food itself and what we sell it for the profit is about 70%.  That number can get higher if we sell more and are able to buy in bigger bulk.

How much do you sell on a good day?

Our goal based on our price level, roughly $8 a meal, and restaurant capacity is to sell $40 per table for a total of $1000 of sales per day.  That is a good day for us.

Any other tips for a new restaurant owner wannabe in Ecuador?  

Sure, the cost of living and rent in Ecuador is cheap compared to a place like Canada so take your time to find a good location, it could take several months of searching, don’t kid yourself with an average location, you win before you begin.

How can we learn more about your restaurant or give it a shot ourselves?

Check our our Facebook page MegaPizza Cumbaya to see pics of our food, we are right on the corner of Orellana y Chimborazo in Cumbaya or call 02-603-9983 for more on how to arrive, obviously, we speak English, open 7 days a week.  And on Monday nights we have EXPAT NIGHT from 6-10PM where if you show a foreign passport you get a free beer or beverage of your choice with any meal purchase.

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Why I left Cuenca…

 

I hear it all the time…

“Man, Cuenca was too da** cold and rainy.  I came south to get away from that.  But the coast is too hot and humid for me, I think Ecuador is not for me.”

You’re right.  It’s freakin cold!

Cuenca doesn’t have eternal spring weather like what you’ve probably read elsewhere online, for me, its more like eternal late fall.  I’m talking late October early November in the midwest here.

Cuenca, Quito and Loja are simply cold.

The coast is hot.

But this is the tropics man, all you have to do is find the right elevation that gives you your ideal year round climate.

Like instead of Cuenca, try nearby Gualaceo, Paute or the Yunguilla Valley.  They all are mountain towns that have warmer, yet not too warm, weather.  For you, maybe just right.

Instead of Quito, which is too COLD for me, try living in one of the lower valleys nearby like Tumbaco or thr Valley of Los Chillos, both have much more pleasent truly eternal spring-like weather.

Instead of chilly, overcast Loja, try more mild, sunny nearby Malacatos, Zaruma or Vilcabamba.

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21 Things you can ONLY see in Ecuador

That’s the reason we travel, right?

To see stuff we can’t see in our home country.

Well, here are 21 things you could never see in the USA or Canada (or elsewhere for that matter) but you CAN see in Ecuador.

1.  When pulled over by the cops, Ecuadorians tend to get out of their cars and walk over to the cops and try to reason with them.  If you tried this in the US you would be shot dead on sight and left to lie there in your own pool of blood.

2.  Getting honked at while sitting at a red light.  I’ve only seen this happen in Ecuador, and a lot.  If you tried this in the USA you would make the evening news as a victim of road rage.

3.  Self-made speed bumps.  Thats right, especially along the coast, a lot of folks in small towns decide from one day to the next they’re going to make a speed bump.  Usually they are perfectly camouflagued and right at the end of a speedy curve, yes, they’ll rattle your teeth all right.

4.  Unrefrigerated Milk in a box.  I never seen this in the USA, but its commonplace in Ecuador.

5.  Women in high heels in a grocery store.  No, they are not on their way to a wedding or something, Ecuadorian women will put on heels to go grocery shopping.  Better than the other extreme, boy, did I get tired of watching lazy American college girls who roam around all day still in their pijamas.  I for one hope that trend stays in the US.

6.  At 5’6 getting on a crowded bus I can often still see over the tops of everyones heads.  In the US I would be catching the draft of ‘silent-but-deadlies’ on my forehead.

7.  Love motels.  Maybe I was too nerdy but I never saw one of these in my first 20 or so years of life while living in the USA.  Love motels in Ecuador are pay-by-the-hour places with heart-shaped beds, no windows, and all the channels on the TV are p orn.  You go there to do one specific thing and leave.  My first time in one they looked at me funny when I asked if there was a 10 minute rate.  Seriously, in 10 minutes I’m done, showered, shaven and smoking my second cigarette. Unless of course I have one of my bubblers and in that case, it might take a little longer.

8.  Gas station gas pumpers.  This is a long extinct career in the USA.  But every gas station in Ecuador has them.  I guess they think pulling a lever is too complicated for people.  But what is the training like for these people that help you pump your gas?  I can see it now, “OK men, easy and steady, aim high, don’t go crazy with it, if you get it on the rim you’ll hear it from the misses.  And if you shake it more than 3 times you’re playing with it.”  Maybe thats why only men seem to be qualified for this one.

9.  Coca cola in a bag.  So what happens if you order one of those famous, standard $1.75 Ecuadorian plate lunches to go?  That’s right.  They will give you the coke in a bag.  To look as Ecuadorian as possible you need to proceed to bite the corner of the bag and “suck that titty”.  Come on, don’t be a baby, (no pun intended) we’ve all done it at one point, or various points, in our lives.  Other wierd things in bags can also be seen like ketchup, mayonesse too.  Strange.

10.  Carrots larger than a grown mans forearm.  At the sight of one of these massive carrots one female tourist asked me if everything in Ecuador was that big?  Why yes mam it is.

11.  Cars with 100% tinted windows and police-style strobe lights.  This seems to be permitted in Ecuador cause I see it eveerywhere.  Too bad its not permitted in the US or I would have lost my virginity 2 whole years sooner in that parking lot that one time.  Men understand, this is an important monkey to get off your back.

12.  Roosters that crow at midnight.  Anyone that has lived in the countryside of Ecuador can sympathize with me on this one,  Must be the equator, but rooster in the countryside of Ecuador have a seriously messed up internal clock.

13.  Watching the Metro door close with so many people packed in that someones arm is stuck out the door as the tram starts to pull away.  Only in Ecuador.

14.  Beer and dogs on the beach.  Ah, I remember in when I lived in Southern California dogs were quarantined only to a few very specific beaches and beer was a big no no and could even get you arrested.  In Ecuador, Ecuadorians don’t go to the beach to surf, or jog, or any of that lame stuff.  They go to drink beer, and lots of it!  It would be tough to find an Ecuadorian beach without beer and at least a half dozen stray dogs roaming the cuff.

15.  Chicken feet soup.  theres just some parts of animals we’re not used to seeing in our food, or for sale at the grocery store, like chicken feet, bull balls, kidney, and more.

16.  Screwing screws in with a wrench.  Thats right, I’ve seen Ecuadorian construction workers screwing in screws with a wrench.  I swear, give them a shovel and a hammer and they can build you a house.

17.  Leaving your dirty food tray on your table at the mall.  Thats right, just get up and leave it, if you try to throw it away in the bin you may be tackled from behind.  OK, maybe not, but you are putting someones job in jeapordy who is in charge of cleaning the dirty trays.

18.  Watch as an old lady tries to get off a moving bus.  Ahh, only in Ecuador.

19.  The Drivers Ed class where they teach Ecuadorian drivers that stop signs at night really mean, “flick your headlights, honk twice and then drive right through”.  I guess they couldn’t fit all that text on the sign.

20.  The freelance eye-drop seller that tries to sell on the bus, but when he actually puts it in his own eye to show how to use the product he has to brace himself and wince to get it in.  Can I see that health registration again, please?

21.  The floor-to-ceiling mirrors in the handycap stalls in La Escala Shopping Mall in Cumbaya, a suburb of Quito.  I’ve never seen this anywhere and whoever thought of this should be shot.  I mean, come on, who wants to watch themselves and they’re ‘giving birth’ faces as you re sitting there on the pot?  There’s a certain amount of self-respect you lose for youself after watching yourself in this position.

I know, please don’t rush over to Expedia and buy your ticket to Ecuador too fast now, ok?

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The dirt on Cotacachi, Ecuador: March 2014 Market Report

This week I had the pleasure to interview Olga Plavidal, one of the most knowledgable people I know on the Cotacachi real estate market.

Cotacachi is a small mountainous community a few hours north of Quito, and 15 minutes from Otavalo, which has experienced quite an influx of North American expats in recent years due to many factors like its healthy lifestyle, low costs and mild, comfortably warm year-round climate.  For me, its one of those few places in the world, and even in Ecuador, where you really don´t need heat or AC in your home and you re still comfortable.  Rare.

So lets turn to the local expert on the ground to get the dirt on whats really going on in early 2014…

Enter Olga.

1.    Why did you choose Cotacachi?  

–       I came to Ecuador 3 years ago, stayed in Quito for a month and was making short trips to various destinations. When I came to Cotacachi for a day trip, my soul whispered me: ‘That’s it, darling, that’s your home…’ Some places looked like from the fairy tales to me!

I’ve been captured by the beauty and the cleanness of the town. Every morning the owners of the stores wash the pavement in front of her/his business with soap (!) There is hardly any signs of deterioration on the pavement. I have the same quality of pavement back home, but I work with a Gettysburg based sealcoating company and they fix it regularly. They beautify their exteriors with flowers. People are very friendly and they greet you on the streets even if they don’t know you. Gorgeous views of 2 volcanoes of Cotacachi and Imbabura and the stable climate, like May time all year round. Even at the rainy season we have just occasional showers in the afternoon and over the night. Hardly ever until the afternoon.

Concrete, on the other hand, is a rigid pavement. Its function is simply to bridge soft spots in the soil. Poured concrete will crack and break due to loads, shrinkage, soil expansion, and frost heaving of the sub-grade. Concrete is one of the most vital materials in construction, but poured in place concrete makes a poor paving surface. This is due to its relative inability to flex and its low tensile strength. Some of the advantages of pervious pavers are that they can appear to be indistinguishable from non-porous pavers. They are a very attractive option for use on paths, terraces, driveways, parking areas or low-speed low-volume roadways. They come in a wide variety of styles, shapes and colors that can enhance your project site. They are as attractive as other styles of precast pavers. The driveway pavers Los Angeles, california is a long lasting, low maintenance cost product which looks great over time.

2. What do some expats complain about in Cotacachi?  Or why some folks decide not to stay in the area?  

–       Some foods are not available that you’ve used to – but use your creative juices and find the alternatives, lots of them! Probably, not too many things to do, as they might think. However, we have lots of activities here now; new businesses are popping up and many volunteer activities as well. But it’s everybody’s choice if they just want to stroll from one restaurant to another and gossip on everything, or to get pro-active in many new opportunities that we have to offer now. Many business opportunities are still not here. You chose this country to live in. Get creative and go for your dream! Turn your hobby into a new venture and create the lifestyle that you desire!

3. What are current market prices like in the different areas of the town and for different types of property and the per meter price of vacant land in the area? 

–       Depends on the area. Closer to the center, the higher the price, of course. The typical Ecuadorean house, not the new one, can be around $250-300 per m2, while the new construction in the gated community can run up to $750 per m2. You pay for what you get – quality of construction and finishing materials, security of the gated community, etc.

The land is the same – the closer to the center – the higher the price. $40-50 per m2 closer to the center and smaller lots, and can be $15-17 per m2 just outside the town for the bigger acreage. Again, it all depends on the location, neighborhood, views, size, and many other aspects to consider.
4. How has the market performed over the last year?  over the last 3 yrs?  over the last 5 yrs? 

–       It’s steady growth of about 15% a year, the more people get to learn about Ecuador, the more they come here. The property prices have tripled here in the last 3-5 years. They will be still growing, but there’s still a great chance to get them cheaper than in the US or Canada. If you want to get more detail about heating and cooling repair services, then click this url . Also, please consider that you don’t have to pay cooling or heating humongous prices, property taxes for most of the properties are under $100 a year (!). You can go to this web-site for more about the heating and cooling repair service. The heating, ventilation and air conditioning system in your home plays a crucial role in making the household members comfortable even in extreme seasons.

Giving it due care and attention is therefore important, otherwise, you will be suffering certain consequences like having to pay for incredibly expensive machine repairs or replacements. To prevent anything like this from happening too soon, you can avail of the ac repair services rendered by professional HVAC companies in your area. These people usually have the skills and knowledge required to provide solutions to any trouble or concerns you raise in regards to your unit.

Also, what you pay for food, services and some other things are incomparably cheaper that in the US and Canada. You have to weigh all this on your scale and don’t just look at the property prices, but rather the whole picture of your monthly spending here. You know it yourself that you can live here comfortably under $1,000 a month, even renting a modest property, or under $500 if you own it.

5. Do you see any notable tendencies in the local real estate market?  

–       I sure do. More people are looking now into income producing properties, businesses to support them in case there will be some political changes, affecting their lifestyles. They are looking mostly for B&B’s, restaurants, farms and agricultural land. However, there are still quite a few folks who’ve built their nest-egg, sold their property back at home and want a nice comfortable home to live here peacefully.

6. Where in the city is best for an expat to invest and where are some areas to avoid?

–       To avoid is definitely the areas out of the city, where the Indigenous communities are occupying. If you decide to live in one of those communities, you should be really adaptable to their lifestyle and culture. Otherwise, the whole city of Cotacachi is not so big, let me know your desires and I’ll do my best to assist you in finding the best place for you!

7. For someone looking to invest in a rental property, what would you advise them and what type if property should they buy and where to keep it rented?

–       Most of the folks are looking to rent in the center of Cotacachi, a few minutes walk to the center. It’s easier to rent it out. Inexpensive, maybe Ecuadorean style home with all the basic furniture. Many renters want it for a short period of time, up to a month or a bit more, so that accommodate them, as it’s cheaper then hotel and gives them more privacy.

8.  What are the prices of nearby farm land and what types of crops are most common in the region?

–       The most common crops here are corn and beans, avocado trees are abundant as well, lemons and oranges grow well here, tree tomatoes (it’s a local fruit), potatoes, tomatoes, cucumbers, lettuce, cabbage – so many things, this soil is so rich, I think that whatever you stick in it, will start popping up J

Prices can be very different, depending on the location and the size of the land. $1-10 per m2.

9.  What other opportunities do you see for investors in your area?  In other words, what would you do with $100-200k in your area right now?

–       I’d buy some good rental property that will bring some good ROI. Also, land for development or a good inexpensive land for agriculture. No matter what the future holds for us, people will always need the place to live and the food to eat.

10.  For renters, what are the average rental prices looking like?  What are the normal rental terms?  

–       Depends on where and what you rent. Gated communities can be $600-1,000 a month, all furnished and really nice. But you can find a small local Ecuadoreans apartments for $100 unfurnished, or a bit more furnished. All depends on your choice of lifestyle and budget. My friend rents now a 1 bedroom furnished apartment with a good size kitchen, full bathroom for $200 a month. Please, don’t ask me for rentals, I usually don’t do them.

11. What’s one thing most people don’t know about Cotacachi?

Gee, Dom! That’s a big one! Please don’t limit me on that one! Let me list some of them, at least:

–       You’ll pay for anywhere going in taxi in Cotacachi just $1, don’t even ask the driver ‘how much’, it’s just a buck, wherever you go. Can be $1.25 or even $1.50 if this is 5-10 minutes to the properties that are a bit out of town, Like Yana Pamba, El Batan, Jahua Pacha.

–       You can have a really nice lunch in a local restaurant, if you ask for ‘almuerza’, not going for ‘a la carte’, which is from the menu. Just from $1.75 in many little  local places, at the food court/bus terminal as well, to a fancy ‘La Tourista’ on Bolivar street for $3.50 – awesome! Just don’t forget the magic word ‘almuerza’, write it down now, or they will bring you ‘Menu del Dia’ and will charge you twice for a little bitty added to it.

–       Do you know that you can drink the water from the tap? Yes, it’s safe! It comes from the Cotacachi volcano and goes through the purifying facility here in Cota, and straight to our homes.

Thank you, Dom for interviewing me, hope that will help some nice folks to get some better ideas about living here.

Welcome to Ecuador! And, please check my website for the best properties in Imbabura area: http://chantal-realty-ecuador.com

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What Pablo Escobar taught me about life in Latin America

Many people don’t know this about me.

But my first ‘living’ experience in Latin America was when I lived almost a year in Medellin, Colombia.

I was young, 23 years old in fact.

And I have to admit I was mainly focused on going out, partying and chasing women.

But in the breaks from that, I picked up an internship with the Medellin Chamber of Commerce, export division.

While there, as an advisor to Colombian export businesses, I couldn’t help but notice one thing.

There was MAJOR opportunity in Latin America for a ‘gringo’ like me.

You see, day after day I met folks with great products and great ideas, but they needed help penetrating the North American market.

They were clueless.

Heck, they needed a ‘link’.  Someone that knew the culture and knew a bit about marketing to Americans.

No where can I illustrate better this fact than from a 4 minute movie clip from one of my favorite movies, Blow, when the main character (a gringo) meets Pablo Escobar, and goes into business with him.  Watch it here. 

No, I never met Escobar personally, but I did meet quite a few people who were fatherless because of him.  Not good.

And of course, I don’t suggest getting into illegal businesses like the main character did, why when theres plenty of legal ways to make money?  But the lesson is the same.

Which brings me to my point for today.

I’m actually a pretty average guy, average intelligence, was an average athlete, 5’6, soft-spoken, usually not a leader, chances are you’ll have trouble hearing me even when you are 3 feet away… in the USA I’d probably be someones ‘office b*tch’ aka ’employee’.

But I can attribute any successes I’ve had in Latin America to 3 superpowers.

By superpowers I mean things that set you apart from the pack.

1.  “Being” a gringo.  As mentioned above, many people in the business environment of Latin America will ‘listen’ to you just because you are from up north, many have a respect that is visible.   You really do have an innate sense of how other gringos think, what they want, and what makes them tick.  Knowledge that someone trying to sell something to them is certainly going to covet.

2. Speaking Spanish.  Take a few months when you first arrive and learn that sh*t.  Really, in order to get the most out of living here like the friendships and business opportunities you’ll need to learn it, without it you can’t be ‘the link’.

3. Knowing marketing, specifically Internet Marketing.  This is undoubtably where the world is going, where the world is, its how businesses get clients, cheaply, and many Latin Americans are not as schooled on this topic as North Americans.  That’s the key in literally anything you want to do down here, import, export, tourism, real estate, etc… Don’t believe me, just check out an Ecuador airlines’ website, (like Tame) even those multi-million dollar guys don’t get it.  The good news is you can learn this skill, often by self-teaching yourself online like I did.

With those three powers you can do some serious damage down here!

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