This week’s question: As Cuba slowly opens up, what advice would you offer an entrepreneur starting up a business?
Cuba is certainly a risky venture and its early steps into entrepreneurship is also an ethical question. Personally, I feel people like myself and others like me should play a major role in aiding Cuban economic development. However, this must also be done responsibly and with the intent to maintain the flavor of the Cuban culture. I believe any mentoring should include the expectation of adapting their culture into opportunities.
Alejandro Badia, orthopedic surgeon and founder, OrthoNOW
For an American entrepreneur seeking to do business in Cuba, I would tell them there are opportunities available. Many entrepreneurs have tried to find a niche in Cuba, but the climate for doing business with Cuba remains difficult. They need to remember that the U.S. embargo remains very much in place, so doing business with Cuba still requires people to understand and comply with the embargo regulations. At the same time, the Cuban government is only slowly opening up its markets, so entrepreneurs need to learn to be patient. Do not expect things to get done as quickly in Cuba as they do in the rest of the Americas.
Hilarie Bass, co-president, Greenberg Traurig
Many American hotel companies have had an eye toward development in Cuba as an emerging market for some time now. It seems that the infrastructure in that country needs to be better developed in order to support its potential growth. My advice would be to proceed with caution.
Peggy Benua, general manager, Dream South Beach
Learn Spanish. Understand that running a business in Cuba may be vastly different than here and be aware of the costs and constraints of regulatory compliance and other governmental requirements. Also, know your customer. You may have customers that are not happy you are engaging in business in Cuba.
Meg Daly, president and CEO, Friends of The Underline
Wait until this year's presidential election is over. Wait until Fidel Castro dies. Wait to see who dares to do anything of significance; entrepreneurially-speaking. And, at the end of this waiting period, if you really want to start up a business, come to Liberty City.
T. Willard Fair, president and CEO, Urban League of Greater Miami
If you are an entrepreneur considering doing business in Cuba, the first step is to make an assessment and evaluate the service, product or business-to-business offering to determine the feasibility of successfully entering and growing in this market. In that evaluation, you must assess the barriers to entry and have an understanding of the regulatory hurdles necessary to penetrate the Cuban market, and the expected demand for the type of service or product you plan to offer. Understanding the regulatory barriers and market demand are the simple first steps necessary to determine a go vs. no go evaluation. As a result of this process, an entrepreneur may in fact determine that the best path for growth may happen to be expanding domestically or in other international environs that pose less risk and greater return.
Alan Kleber, managing director, JLL (Jones Lang LaSalle)
My advice to an entrepreneur hoping to start a business in Cuba would be to wait and watch. I believe there is tremendous opportunity in Cuba, but it is not yet a place for entrepreneurs. Cuba’s business environment is very tough (to say the least), consumer spending power is lacking and there’s significant counter-party risk. That being said, it has potential for multinational corporations that can handle the risk and leverage the opportunity afforded by the location, low labor costs and prospects for growth. Entrepreneurs should be very wary as risk is high and returns are uncertain.
Mario Murgado, president and CEO, Brickell Motors
Tread carefully, and be cautious. Business is difficult even in a stable economy, and I believe Cuba still has a long road ahead before political conditions allow for a true private sector. The island will need to adapt modern policies, update its aging infrastructure, and allow the people to act and speak freely. That being said, Cuba’s culture, coastline, and proximity to Florida will certainly appeal to entrepreneurs looking for new ventures with the country. With the proper timing and the right kind of business, opportunity will certainly present itself.
Steve Perricone, president and owner, Perricone’s Restaurant
Until there is a clear system of law, be careful. Cuba offers a great opportunity especially for all of us in Miami. The danger is that property rights are still unclear. Investing in a great business deal that you don’t actually own due to the lack of enforceable rights will lead to distress and losses. Once the government is ready to really clarify property rights, then Cuba will explode. The current politics will also change if the rule of law is respected. This can resolve legitimate economic and political concerns.
Craig Robins, president and CEO, Dacra
As a young entrepreneur myself doing business in Europe in my early 20s, I understand the importance of respecting cultures and how business operates. In Cuba, you should be cautious, but ready to implement your idea when the circumstances allow; such as the ability to hire and pay Cubans directly. I also believe you should identify a young Cuban living on the island as a partner in the endeavor and consider how your idea serves and benefits the Cuban people. It’s important to understand the history and culture of Cuba, issues regarding human rights, as well as the nature of U.S.-Cuba relations.
David Samson, president, Miami Marlins
Any entrepreneur looking to do business in an emerging market should fully research the regulatory and legal environment and be prepared for that environment to change quickly and frequently as the market matures. You need to be nimble in an established market, and doubly so in a market in which the rules are still being developed.
Eric Silagy, president and CEO, Florida Power & Light
I do hope that Cuba can learn some of the more difficult lessons from us, so that they can avoid some of the same mistakes. For example, they have a rich and well-preserved environment due to their lack of industrial development. In particular, Cuba's reefs are said to be spectacular. I hope that they have the foresight to develop ecotourism with sustainability in mind and to protect some of their national ecological treasures for future generations.
Rachel Silverstein, executive director, Miami Waterkeeper