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Entered By: Mark
Entry Date: 2007-10-18 13:56:16
Subject: Hardware Store

   Jose is on a journey of discovery today in San Pedro Sula. He will be traveling from one hardware distributor to another looking for all the stock we need to sell and the best prices. Jose's wife Lourdis is really on top of things! She used to work in a large hardware distributorship herself as an accountant. She knows exactly what to ask. She's also been guiding us through the steps of starting a business in Honduras. The order is a little different here than in the USA as well as the taxes.     To start a business here, you get some kind of registration number (called an RTN) from a state office. This step is free. The next step is to actually start selling stuff. Then, within three months you must file with the tax office of the local municipality. This part is not free. You will pay taxes up front based on your stated initial investment in the business (the more you invest, the more taxes you pay...something like 20%). I am a little unclear of the translation but it seems like you also pay an annual tax based on the investment, not on profits. There is one other tax, which is charged to the customer. This last tax is basically a sales tax in the amount of 12% and change.     At the minuscule risk of a competitor reading this, I am going to divulge our strategy. Although we definitely have a convenience factor in our favor, we are not going to charge a premium as a 7-11 might charge on a bottle of Coke. I want this store to grow. I want the locals to always come to us first because there is no price advantage in traveling to town. (Price is everything here). I want our inventory to grow so there is less reason to travel. And finally, as stated in a previous journal, the Lord has given us a vision to expand in numerous locations in Honduras. These stores should provide a good living to an honest family and support local Christian missions (schools, churches, clinics and more). Children everywhere in Honduras need improved education and education is not cheap! There are plenty of nice buildings around but little in the way of funds to operate the schools they encompass.

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