Running a Business in Chile

by Jack
(Villarrica, Chile)

Starting and/or running a business in Latin America is a special challenge and probably more difficult than in North America. I've been involved in starting up two businesses in Chile.

The first was a printing business, which, although I had been a buyer of printing before I had come here, I really learned the trade in Chile. The other business was a retail tire business, which is still active today.

There are various permissions and regulations that must be followed that may be daunting to a newcomer together with the fact that cultural differences may sometimes shock with what you're used to. One of the most frustrating things I continually ran into was getting certain papers or permissions, waiting in long lines to have the processed, then being told that I had to get another photo, signature, or other detail before the thing would be complete. It almost seemed impossible to get someone to tell me -- in advance -- all the steps and requisites that I needed to complete a given process.

There were times I felt that I was being taken advantage of because I was a foreigner, and other times I've found that being a foreigner has actually made things easier for me.

In the first category I often felt that people were charging me higher that they would otherwise because of their perception that gringos were rolling in cash. I've gotten around that by having a local partner who will do some of these negotiations for me, with me in the background to keep an eye on things.

There seems to be a popular conception in Chile that gringos are more honest and responsible than the locals, so this has been an advantage in establishing a positive impression of the business from the start.

One of the things that I implemented from the start of each was a customer-service oriented policy and quality control based on what I was accustomed to in North America. These two things were very positive in the success of both my businesses.

In the retail business, it was a struggle for the first couple of years to teach my employees to treat customers the way I felt they should since this simply wasn't what they were used to, but in the long run it paid off because now our business has become the standard by which other businesses in this area are judged. We have also gained national recognition for the level of customer service which we provide even in a small community several hundred kilometers from Santiago, the capital.

Even simple things like how to answer the telephone was a challenge. At first, my employees weren't even used to having a phone in their homes, let alone answering the phone in a friendly way in which they identified the business, gave their name and offered to help the caller. Now, it's become second nature to them, and even new employees pick it up fairly quickly.

Some things, like the level of productivity which I'd been used to before coming here have been, and still are a challenge, and are complicated even more by labor laws which tend to pit the boss against the employee and impede flexibility in working out mutually agreeable working and payment conditions.

An example is overtime during our busy peak summer months. All of my staff would be happy to work extra hours and receive extra income during this short span, but the law requires that no employee can work more than 2 hours extra on any day, a maximum of 10 hours extra in any week, and must be given Sundays off at least twice per month. Because of these legal requirements, I'm forced to hire extra staff during the summer and my existing employees don't get to earn the additional income they'd love to have over this brief period.

In spite of the difficulties, the result, in large has been mostly gratifying and worthwhile. I now have a business which can virtually run by itself with minimal supervision on my part with loyal and responsible employees.

If you'd like to ask some specific questions about business in Chile that I might be able to help with, please contact me through my business in Villarrica, Chile. See our website Neumático Centro for contact information.

(It's all in Spanish, but if you're heading to Chile, I'd hope you at least have a rudimentary knowledge of that.)

Of course, if you're interested in buying tires, we'd be delighted to help you with that, too.

Best wishes,
Jack

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