Business Idea in Ecuador


Here are five important ideas about great places to be now.

Great Places To Be

  • Ecuador still offers small business opportunity.
  • Tip from a global traveler
  • Profits in Ashe County
  • How to cash in on Small Town USA

Dear International Friend,

Great places bring opportunity and more joy from life. London was a great place to be in the 70s and I increased my investments eleven times in two years by buying property there then. Naples, Florida was a great place to be in the 90s and we increased our investment five times in property there. Ecuador in the last decade has offered it all-low prices, simplicity, every creature comfort. Property we bought is sky rocketing up now. Business has been great.

So where are great places now?

ECUADOR STILL GREAT FOR SMALL INVESTORS

Here is a message sent to me last week by a French delegate at our last International Business Made EZ course in Quito.

"Ever since I came back from Quito in March after attending your seminar-which I so thoroughly enjoyed-I have been aware that I would like to start up a small business and in doing so help the Ecuadorians in some tiny way.

"It has also become an obsession that in the future I must spend part of my winters in that wonderful country! (I think in one of my past lives I have lived there!)

"I bought a couple of sweaters from Galeria Latina and have shown them to friends both here in France and in the UK, and they created a lot of interest.

"As you may remember I do not have a lot of capital so cannot buy huge amounts of stock. So this is where I would so muchvalue your opinion and advice. What about a mail order catalogue or sales on the internet? There is already an English company which sells Peruvian clothes through a catalogue and some of their sweaters sell for over £400! I ordered a dress for my niece a couple of years ago and it took 6 months to arrive!

"I really enjoy reading all your newsletters-long may they continue. I appreciate the fact that you are a very busy person but if you do have a moment to put down any ideas on the subject I would be most grateful. Do hope all is well in your world-please pass on my best wishes to Merri. Strange things seem to be happening in France at the moment but we are hoping for the best on Sunday! With kind regards from C."

My reply below provides a business idea that will work in many types of small businesses. Here was my reply.

Dear Carolyn, I am delighted to share some thoughts. I see several ways of doing this. First I have seen the Peruvian catalogue and you are right, they charge an arm and a leg for their products.

Ecuador is a perfect place for small business people as their industries are composed mainly of small businesses. Few big companies export from there because they cannot get sufficient supply.

I suggest selling from inventory. Build slowly. If you take orders and thentry to get product from Ecuador you may be overwhelmed with customer service problems. The task of continually telling everyone when the shipment is coming could be too much to bear. Buy as much as you comfortably afford, sell it and buy a little more each time.

An alternative is to buy and show samples, take orders and when you have sufficient orders (with a deposit that should about equal your purchase price), fly over and buy….plus enjoy your time there.

Call your service "Andean Buyers Club" or something like that. The story is simple. There are wonderful sweaters, coats, clothes, etc., in the Andes, but who has the time to get them all? You will be the customer's personal buyer. Give them an E catalogue, let them send you their order with deposit and credit card (so you can charge the balance when you return with the goods). When you have enough orders to cover your trip and give you a profit, run for DeGaulle! Good luck!"

TIP FROM A GLOBAL TRAVELER

The message below from a reader who has been living in Ecuador gives insights to how life in a third world city can be.

"Hi Gary, I just read your response regarding security in Ecuador and I could not agree with you more in reference to tourists not knowing what areas are safe nor how to behave. I also agree with you that Quito is no more dangerous than any other large, urban area in the world.

"I do have a couple more comments that I would like toshare with you, and please feel free to share my viewswith anyone you like. I lived in Quito for threeyears and only just recently moved back to the U.S. inorder to complete my graduate schooling. I am veryfamiliar with all regions of Ecuador and love thepeople, the biodiversity, the scenery, and the lifestyle. However, I have had my share of security issues and have talked to a lot of other people about this too.

First, of all, walking on the street in Quito isreally only a security issue in the Mariscal sectorand the markets of the old city. In these places,criminals have learned that tourists are an easy target and unfortunately hunt down easy-looking prey. Other than this, it is generally not advisable to walk alone or even in small groups at night in other parts of the city as well – especially the parks (but would you walk around in Central Park, NYC at night? – please!)! However, both Mariscal ("Gringolandia") and the old city can be visited safely by keeping personal belongings tucked in and put away, traveling in groups, keeping a sharp eye out, andstaying out of dark corners. Additionally, taxis are very cheap in Ecuador and should be taken advantage of. When going out to bars or dinner in the evening, always take a taxi from one place to the next – even if your destination is only a couple of blocks away. Save your hiking for your weekend trip to Imbabura – the inner city isn't the place for it! I don't say that to scare anyone, I feel the same way about Washington, D.C. Unfortunately, crime has gone up over the last couple of years. What you mentioned about Guayaquil criminals moving to Cuenca is true for Quito. Guayaquil has become a MUCH safer city than it was, but many of the old gangs have found new homes in Quito.

"As for living in the Quito area, it can be a wonderful experience if proper precautions are taken. I have heard these stories of people's dogs being poisoned as well, but dogs are not the only precaution you can take. The bad thing about Ecuador is that you cannot put a lot of faith into the police system, you must take matters into your own hands. This is why you see private guards in front of the majority of shops and nicer homes. A private, full time guard can cost you as little as $120 a month. Now I have heard stories from Lima, Peru that suggested that house guards were often involved in robbing and kidnappings at the house they were stationed at. I have not heard this from Ecuador, but the key to avoiding this is befriending you guard. Feel free to interview a variety of guards and get to know your guard. This is not only a wise thing to do, but it can be a great inter-cultural experience if you are new to the country. If you are throwing a couple extra dollars, a meal here and there, and gifts on holidays to your guard – he is going to feel better treated than any other guard around and is very unlikely to turn on you. One thing that foreigners must always remember in Ecuador is that the blacks, indigenous, and lower classes are treated awfully by the middle and upper classes. Many 'upper class' people treat their servants worse than animals. If you treat your employees like people rather than objects, you will receive an unparalled level of loyalty and love. An additional advantage to having such a guard is that they can often co-function as sort of a house handyman, dog caretaker, etc. I lived in a small apartment building with 2-3 other roommates in central Quito. The other three apartments in the building were robbed three times during my three years, but our apartment was never robbed. I believe that this is partially due to the fact that we became such good friends with our guard, including allowing him to cook breakfast in our kitchen and call his wife from our phone. Our guard would pay special attention to us, would walk my dog, would come over to check on us on his day off, and often even washed the dishes and cleaned the house on the maid's day off! For good quality guards, I would recommend hiring someone with some military experience that has migrated to Quito from a rural province. I have had especially good experiences with guards from Los Rios.

"In regards to traveling in Quito, it is generally verysafe. Due to the conditions on the buses, I highly recommend car travel when possible. It is advisable to only travel during the day, due primarily to the road conditions. I would not advise traveling north of the city of Esmeraldas on the coast nor in the upper Sucumbios Province. Both of these areas are on the Colombian border and are infiltrated by guerillas.

"However, the Andean region (Sierra) is basically saferight up to the border. When traveling in the Esmeraldas Province and the coastal portion of the Pichincha Province, whether by car or bus, I would recommend day travel only as car/bus jackings are not unheard of in this region. I do travel at night in this area at times, but I also carry a .38. If you are uncomfortable arming yourself, travel in the day. Direct buses (ones that don't stop in every town) are the safest.

"On a final note, whether you decide to live in Quito,the suburbs, in the countryside, or elsewhere – surround yourself by good people. The people that I have heard about having their dogs poisoned, lived in a semi-rural area just outside of Quito and did not have many neighbors. Get to know your neighbors, choose live-in servants if you have a guest house, and get a guard. Guapalo, Gonzalez Suarez, Canal 8, Batan Alto, Nayon, and Cumbaya are all very safe neighborhoods for foreigners and making friends in these areas can function as sort of a "neighborhood watch". Also, shopping and going out in the nicer Ecuadorian places, rather than the "gringo" places for tourists, is perfectly safe. Quicentro Shopping, CCNU, El Jardin, Plaza America, CCI, and the shopping centers in Cumbaya and Tumbaco are all good examples of very safe places with a very American feel, but primarily Ecuadorian clientel.

Sincerely, AH."

This is a real tip for success. Get good neighbors and treat people with respect. That's good advice anywhere, but how often we forget!

PROFITS IN SMALL TOWN USA

I can trace most of my profits (and those of my readers) to just a handful of incredible tips over the years. In the early 70s I wrote about getting out of the dollar into Japan, Australia, Switzerland, Germany and silver-gold. Profit increases were about four times.

In the mid 70s I recommended London real estate for an eleven times increase.

Writing about Hong Kong shares brought us to the top performing stock market in the world for a decade.

Then shares on the Vienna and Turkey bourses exploded upwards. In the early 90s I wrote about borrowing yen and investing in higher yielding currencies. This has been a profit spinner for a decade.

Finally I recommended buying land in Ecuador and this has been one of my better tips. Ocean lots that my readers bought just over two years ago at $2,500 are selling at $17,500 now. They are still cheap, but those readers have already increased their investment by seven times in just two years!

At the beginning of this millennium I also recommended investing in Ashe County when I wrote about investing in the area around Merrily Farms.

In the 2 years since, the price of land in the area has just about doubled. I reckon I have tripled or quadrupled my investment here by investing right. However on my return from Ecuador this Spring, I realized that opportunity in Ashe County was just a small reflection from a much bigger picture.

WHY YOU CAN CASH IN ON SMALL TOWN USA

The picture began to unfold while I was in Ecuador. This tiny Andean nation is heading for what I believe will be its four or five richest, best years. The Ecuadorian economy is growing faster than anywhere else in Latin America. Things are looking good. "Time for me to get out, I began to think." Ecuador is a great place for me to visit and I will always be attracted there for its spiritual values and to be with our many friends there, but when it comes to investing, I am a pioneer. Prices are now losing their competitive edge. The first clue came when I took two friends and a guide to the Crater restaurant and the bill was over $80. The handwriting was on the wall (the price per person last year was $5). Prices are not so much lower as elsewhere. When I tried to buy a house in Imbaburra and was beat out by a local who offered over the asking price, I saw that the bargain basement real estate sales were gone.

Safety has become a much greater issue as well as you have seen in this and my last two messages about Ecuador.

So I was already asking myself, "Where next?", after we had flown into Miami and were driving north. A second clue arrived when we visited our daughter in Naples (and our first grandchild, Garren Shawn Hall, born April 18!) when I saw that our old house there had recently sold for $3.2 million. This I promise you is much, much more than we sold it for just three years ago and is too much for a (albeit charming) 90 year old house.

The third clue came when we decided to get off the freeway and roam through the small, friendly towns that dot Florida, Georgia and South and North Carolina. Somewhere around Avon Park, Florida as we rode through an oak lined boulevard with Spanish moss hanging over clean sidewalks, in a traffic free zone, I got the message. Small town America is one place where the action is going to be. These small towns can be safe, the people friendly, real estate is exceedingly inexpensive and in global purchasing terms will fall even lower as the U.S. dollar falls, (for awhile).

I can now eat a hearty breakfast in Jefferson, North Carolina (our nearest town of any sort) for less than most places in Quito. And although the Ecuadorians are sweet so are these small town people. Also we came home to a house with doors unlocked and cars, trucks and jeeps parked with the keys in them.

9/11 changed people's values. Family, friends and quieter, more peaceful life is more important than before. Having these fine qualities is harder to achieve in downtown Manhattan or Central Chicago or in the heart of L.A.

We could be in for some difficult economic and social times. This means that the value of these small towns and their honest core values will grow. If the economy doesn't falter, and the world comes up roses instead; small towns will still not lose their appeal. The world's population continues to grow and as we look for an escape; small towns offer freedom from crowds, traffic jams, pollution and the hassle of city life. I believe these qualities will grow in value.

You can read more this Friday about the world's and U.S. economic problems in our Friday international Investing message. This week Merri and I are heading out for Cleveland, Georgia for our first small town inspection tour. We'll report on what we find next Tuesday in our "Great Places To Be" message. Until then, may wherever you are be great!


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