According to data from the U.S. Bureau of Labor Statistics, about 20% of businesses fail in their first year. The percentage increases to 50% after five years, and 70% at the end of a decade. Owning a business has its rewards if you can put in the effort—financially and emotionally. However, being an entrepreneur comes with many obstacles that are even more challenging when you want to launch your business in another country.
Tough as it can be, these five tips can help you increase your chances of success when you launch your business in a new country.
#1: Have a clear plan
The first step is to find a market that will readily accept your product or service. Not everyone can sell ice to an Eskimo, so find a country with suitable laws and standards where your products or services will be openly welcomed. When you find a market, draw a list of things you expect to achieve after launching the business, along with a roadmap on how you plan to achieve it. A sophisticated plan requires that you answer several questions, including:
· Where and when you want to establish the business?
· What kind of manpower, skills, tools, and other resources will you need to ensure business success?
· What is your mission and vision of the business?
Having a solid plan allows you to minimize your risk and maximize your output.
#2: Open a foreign bank account
Before you operate your business, you need to open a bank account in the new country. Having a business account in the country where the business is being established allows you to operate more smoothly. Your financial transactions can easily be processed in minutes. You also get to avoid volatile exchange rates and other risks involved with the foreign exchange market. If you choose to use the bank in your home country, you might lose some of your profit while converting from one currency to another. Check out the best Hong Kong banks where foreign entrepreneurs can open an account for their new business.
#3: Get a local representative
You stand a risk of making mistakes or unintentionally violating laws when you want to launch a business in a new country—and something quite expected considering that you are unfamiliar with the laws of the new country. Get help from local experts. You can hire an attorney or an accountant to guide you, and help you avoid mistakes that you are unaware of. And often, your U.S. accountant may belong to a worldwide network of financial professionals or have referrals for you. Your local representative will see to it that you comply with the laws of the country in financial and legal activities. This local agent can also help you source for the best minds that will make up a great team for your company.
#4: Study the country
Spend time gathering as much information as you can about the country. Learning the environment makes it easier for you to cope and reduces the difficulty of settling down. There is a lot to learn about the new country, including the climate, regulations, politics, economy, culture, and more. Each of these factors, directly or indirectly, affects your business, so study them to ensure you make adequate plans to help your business. For example, in the new country, it might be disrespectful to shake hands with a person or hug a lady; making mistakes like this can be bad for your business.
#5: Have a budget
Capital is one of the most important factors of production, and a lack of capital could lead to business failure. Starting a business is risky, and when the business is being launched in a new country, it poses even more risk. As an entrepreneur, be optimistic with your projections of revenues and profits. According to Forbes, people tend to finish projects later than the expected time and end up spending more than the budgeted expense. To prove this claim, and even though it’s a U.S.-based example, the state of Pennsylvania ended a contract with IBM after IBM spent an extra $60 million on top of the initial budget and delayed the project for more than three years. Ensure you review your budget again and again, and make your capital available to keep the business running until you start to get profit.
Launching your business in a new country is a huge step and you cannot afford to fail. Be realistic. Consider all the negative outcomes of the venture and find ways to tackle these outcomes. If you follow the tips listed above, you will easily avoid the numerous stresses involved in launching a business in a new country.