Tuesday, August 5, 2008

Top Five for entrepreneur relocators

Here is my top five for those who want to stop dreaming and move to a new country to start a business.

1. Learn the language!
Can you start a business in a new country and not speak the language? Of course you can. But if you have any local component to your business...it will take you longer and cost much more to get it off the ground. Invest the time to get a solid grasp of the language in which you will be doing business. Spoken and written! This will pay off not only in time and money, but also in good will generated with any local suppliers, customers and staff.

2. Don't be shy, but don't rely solely on expats
Expats are an excellent resource. They often have been through the same learning curve and can give you helpful advice or make introductions to valuable contacts. If possible, make contact with them before you even arrive.

Here in BA some popular online groups used to suss out thoughts and ideas are BANewcomers, the new Internations.org (invitation only) or forums like BA Expats and Good Morning Buenos Aires to name just a few.

You can also do a search for blogs in your area of interest. I have a few on my blog roll, but there are lists far superior such as Bloggers in Argentina.

Once in-country you can hook up with a number of groups like the Expat Connection, Buenos Aires International Newcomers (BAIN), Club Europeo or even visit the American Chamber of Commerce. I also like to cruise the jobs section of craigslist in Buenos Aires to keep a pulse on local hirings for expats.

But be aware! As you can see, connecting and hanging out with fellow expats is easy. However, it is no replacement for local connections. In fact, your best expat contacts are those who have already figured that out. Make the effort to meet locals. If you have invested the time to learn the language, it's also great practice!

3. Do your homework
Every country has their own way of doing business. Determine how local rules and norms will apply to your business. Things like legal quagmires can suck your time, energy and money. Monopolies and oligopolies do exist and can be difficult to crack. Take time to understand the local business culture and prepare yourself to deal with it.

4. Double prepare yourself for the unexpected
You may have done your homework, but every entrepreneur knows that unexpected or uncontrollable things happen all the time. You have probably made a conservative estimate of costs in your plan... doesn't matter. When starting a business in a foreign country double the margin of error you typically use. For example, if you think something costs X, you usually might anticipate X + 15-20%...Double it! This is especially true for time. Things such as getting a contract signed, finding a local supplier or even opening a local bank account can be unexpected major hassles.

Also having some extra cushion helps when it comes to riding out your everyday economic volatility or political instability. Recent examples in Argentina are the exchange rates, inflation and the recent conflict with the Campo. For example, the USD in Argentina has lost nearly 5% in the last month and though not "official", inflation rate guess-timates range from 25% to nearly 40%.

5. Be flexible, but be principled
There are ways to get things done..then there are "ways" (wink, wink) to get things done. The Brazilian "jeitinho" or "little way" is a classic example. Knowing how to work the local system is often where your local contacts become invaluable. However, be aware of what they are doing and how they are doing it. Question things that don't pass the smell test. If you're not sure about something, leverage your network of locals and fellow expats. They may have experienced something similar or can point you in the direction of someone who knows. But if something simply is against your principles, then don't do it. Besides the fact that standing on your principles is the right thing to do, you've already doubled your margin for error, so you have no excuse not to. It may take a little more time, energy or money, but you will be better off in the long run.

These are five points I'd bring up to would-be entrepreneur relocators. What would you add to the list?

1 comment:

Robert Evans said...

In the Face of Uncertainty, Remain Mobile.

If you're relocating to a politically or economically unstable country, invest as little as possible in the country. In other-words, remain mobile. Depending on your business this may not be possible, in which case pick your destination country carefully. The last thing you want is to to spend years growing a business only to have it destroyed by sky rocketing inflation or political unrest.

If Possible, Avoid Employees.

Understand the labor laws in your destination country and structure you business accordingly. Or better yet, pick a destination country based on the needs of your business. Getting sued sucks, avoid employing people.

What's My Motivation.

Are you in business to make money or pump up your ego? Either of them is fine but not acknowledging your motivations can kill you. If you're in it for the money, you damn well better understand the numbers. Model the hell out of your business.