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Bumps in the Capitalist Road for Cuba's New Entrepreneurs

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MSNBC producer Mary Murray reports:

When Cuba’s Communist government recently eased restrictions on “mom and pop” businesses, Rolando Hernandez decided to pursue his lifelong dream of starting a small restaurant. Regrettably, he never learned the business axiom “location is everything.”

The staff is well-trained, having worked at Havana's top hotels before signing on to work for Hernandez. The food is good, the portions generous -- but the customers aren't packing the place the way Hernandez expected.

“I imagined business so brisk that no one here would have the time to sit down," he said.

But, with a location in working class Habana del Este, far from Havana's tourist area, Hernandez is finding it difficult to spread the word -- especially in a country where advertising doesn't exist to let people know his restaurant, well, exists.

Last month, the Associated Press began following some of Cuba's new entrepreneurs to track their progress in a new economic system foreign to most, if not all, residents of the island nation.

Reporter Paul Haven wrote:

As Cuba’s new business class journeys cautiously forth, some, are enjoying the first fruits of success. Others say the terrain has been rockier than anticipated. Some have already closed the door on their entrepreneurial dreams.

Haven kept tabs on Javier Acosta, who is "struggling to get customers into his upscale Havana restaurant. And Yusdany Simpson, a young single mother making a modest income selling coffee and sandwiches from her front yard, a humble venture that resembles a child’s lemonade stand."

According to Lorenzo Perez, a former IMF economist and member of the Association of the Study of the Cuban Economy, a nonpartisan Washington, D.C.-based think tank, "few have business acumen, raw materials are hard to find, tax rates can be exorbitant and myriad government regulations still restrict basic activities."

Some economists have warned that the average Cuban does not have enough disposable income to support those who have taken the plunge into private enterprise.

However, the AP's Haven maintains that most people pick up extra money by doing odd jobs, receiving remittances from abroad, or, wait for it...stealing from their government workplaces.

Will it be enough?

As restaurateur Rolando Hernandez tells MSNBC's Murray, “Las Margaritas could turn out to be my dream or maybe my nightmare. Only time will tell.”
POSITION:  No positions in stocks mentioned.