Starting a business

Well. There is a potential and also competition for gym and bar.  I won't speak about Natal especially but in general. You cannot actually start very small. You need to rent a local (3 years minimu, material, hire people, marketing/ads. Well if you got experience in these areas and you think that your project is better than the local ones (and you invest your time and money to maket it happens), why not.
Bars...I won't ever invest in entertainment/night life business...only if you want to pay locak mob and protection. Welcome to Brazil.

Don't forget that for anything but the smallest, home-based businesses you're going to bump up against all kinds of bureaucracy. In order to be "legal" you need to apply for a CNPJ (Cadastro Nacional de Pessoa Juridica) which is your federal tax number. You'll also need a state license/tax number called Inscrição Estadual (IE for short), from the municipality you need a business license (Alvará de Funcionamento). If you're operating a bar, snack bar or luncheonette then you'll have another level of bureaucracy too, with ANVISA (Agencia Nacional de Vigilância Sanitária) and/or the municipal Health Department.

Cheers,
James
expat.com Experts Team

There will be bureaucracy with any business. I figured the bar would be more difficult because of the food/drink aspect but I could make more money. I did not think about paying protection money.  I will have to research if this is a problem in Natal. Is there another business type either of you would suggest?

Ares5679, well, you highlighted the main problem for foreigners in Brazil. If you aren't the lucky ones who arrived with an "expat contract", it is very tough to make a living here.
A lot of expat try in teaching; very difficult. I am working in IT; I have a got a web agency (because).  Difficult too but I have been in IT all my life so ultimately it was the best bet and it worked.  Services business, teaching, etc...don't need any investment.
Natal is one on the most dangerous city in Brazil (like Fortaleza where I am living). If you did not see these issues, it is because you did not search well enough.