Roatan Business

“Buying or starting your own business on the island”

Why On Earth Would You Listen to Me?

I have launched multiple businesses in the USA, experiencing both significant successes and spectacular failures. I was deeply immersed in the dot com boom, co-founding a company that graced Forbes magazine’s cover within a year, only to see Microsoft acquire the fragments 18 months later when the market collapsed.

Reality Check

The notion of owning a bar, lounging on the beach all day, and passively reaping retirement rewards is more dream than reality. Profit margins may not be sufficient to afford a talented manager while providing substantial income. Without your direct involvement, profits mysteriously dwindle.

Common Pitfalls

  • Lady spent $70,000 on restaurant with expiring lease - lost everything in a year
  • Numerous bars fail in West End - razor-thin margins, slow season kills them
  • People hand over laughable income projections with no local knowledge
  • Buyers deceived about “cash business” potential
  • No non-compete clauses - previous owners open competing businesses
  • Rent increases force successful businesses to close

Employees Are Your Most Important Asset

When buying a business, existing staff are the most vital intangible asset. They are your representatives, hold all previous experience, and ideally are reliable and trustworthy.

If you purchase a business, your staff should be regarded as your instructors during the initial month or two, not the other way around.

Labor Laws

  • 60-day probationary period
  • Extended shifts require substantial overtime
  • Must pay extra month’s salary in June and December (“Aguinaldo”)
  • 14 months in the Honduran work year (6-day weeks)
  • 10 weeks fully paid maternity leave
  • 10 paid days off + 11 paid public holidays
  • 26 weeks sick leave at 66% pay

Starting a Business

Requirements

  1. Copy of corporation documents
  2. Copy of RTN (Registro Tributario Nacional)
  3. Environmental inspection
  4. Copy of rental contract
  5. Copy of property tax payment
  6. Corporate and personal local taxes
  7. Registration with chamber of commerce
  8. Fire department inspection
  9. Written petition

Strong Suggestions

Be Smart

Hire a capable accountant and lawyer. Peace of mind is a valuable investment.

Research

Get over the notion that your ideas are top-secret. Talk to bar owners, bartenders, suppliers, customers. Listen more than you talk.

Buy More Than Intangible Assets

Whenever feasible, own the property. I’ve witnessed numerous businesses forced out due to escalating rent.

Do the Math!

Revenue should cover purchase cost within 3 years or less. Don’t rely solely on provided information - investigate thoroughly.

When Buying a Business

You’re obtaining three key components:

  1. Tangible Assets: Physical property, vehicles, equipment
  2. Work Methodology: Contacts, recipes, trained staff, look and feel
  3. Goodwill: Reputation and trust built over time (easiest to damage)

Critical: If you acquire a business, refrain from making any immediate changes for several months. Understand every aspect first. Otherwise, you risk squandering your investment.