Critical Mistakes International Entrepreneurs Must Avoid

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Becoming a domestic entrepreneur is a challenge, but at least you know enough about the culture to understand what is going to work, and what isn’t. Taking your business international, though, is an entirely different ball game. You don’t know what makes people tick, and so you can’t always work out what they want. 

Unfortunately, entrepreneurs often wind up making critical mistakes when they try to take their companies overseas. And it can often wind up costing them a lot of money. 

In this post, we take a look at these mistakes and what you can do to avoid them. 

Failing To Assimilate The Culture

Assimilating culture is challenging. You have to step outside of your existing assumptions and then carefully observe how people in different places live their lives. It requires tremendous mental discipline and acuity of mind. Frankly, it’s not something that anyone finds easy. 

Just look at the trouble that international chains have had exporting their business models to other parts of the world. Amazon is still a fringe player in Asian markets. Fast-food chain Subway continues to struggle to replicate its North American business model in India. And even banks, like Citi, struggle to replicate their business models across the globe. It’s a nightmare. 

Before exporting overseas:

  1. Think about your target market and get to know them. If you’re struggling with this, get local people to do it for you.
  2. Take their word for it. If something doesn’t seem to make a lot of sense to you, don’t just ignore it.
  3. Run with it.

Usually, the people on the ground know more than you do. 

Failing To Get Proper Translations

We’ve all ordered products from China that came with poorly-written manuals. It’s kind of funny, but also frustrating at the same time.

Unfortunately, a lot of entrepreneurs are perpetuating this problem when they sell overseas. They fail to use proper documents translation, and so they wind up with something that sounds totally unprofessional. 

If you have any copy or media that you want to create in a different language, always get it professionally translated. Don’t rely on machines. 

Failing To Visit The Business Itself

When it comes to managing an international business, many entrepreneurs take a decidedly hands-off approach. Not a good idea. 

People on the ground will always tell you that things are going great. But unless you actually inspect what they’re doing yourself, you can wind up in all kinds of trouble. Remember, international managers always have an incentive to portray a rosier picture than what is happening on the ground—bear than in mind in your interactions. And make regular visits to your locations to check that everything is ship-shape. 

Failing To Use International Accountants

Accountants are usually very good at managing domestic affairs. However, they will often struggle when it comes to international matters. If you have complicated tax relationships, you need to ensure that you get skilled people on your team to manage them. Otherwise, you could wind up paying more than you need.

Top 5 Countries For Businesses To Flourish In 2019

Economic development is a crucial criterion in the determination of the country’s development. Since 2001, when the economic reforms in many countries were suggested by the World Bank, governments have different countries have been taking initiatives to make it easier for economic operations within their respective borders.

The period between June 2017 and May 2018, witnessed a record 314 reforms introduced by 128 governments to benefit small and medium business and entrepreneurs.

The world bank makes use of 11 indexed measures to rank the best countries for businesses to flourish. These include ease of starting a business, registering property, scoring credit, tax filing, contractual enforcement, labor market regulations, minority investors’ protection, electrical supplies, construction permits, resolving insolvency, and trade across borders. Based on this matrix, the top 5 countries for setting up business and smooth operations are listed below.

1. New Zealand

The ease of starting a business in New Zealand is unmatched. It takes only a few hours time for an entrepreneur to get together all the necessary paperwork for establishing their business. Ever since the recession in 2009, New Zealand has achieved 2-3% annual growth in its economy. According to the World Bank, minority investors’ protection reforms and free trade agreements along with efficient tax codes are a few contributors to New Zealand’s top-ranked economic model.

2. Singapore

This Asian country has emerged as a global leader for investments and business start-ups. With various government grants available and regulatory policies in place such as Startup Enterprise Development Scheme, Early Stage Venture Funds, Productivity and Innovation Credit, and many other schemes alike, Singapore is set to manifest the biggest innovation and technology industry, globally. The government has specifically emphasized on boosting the tourism sector with the help of Business Improvement Fund, which is available to all registered businesses operating in the tourism sector or relating to it.

3. Norway

One of the richest countries in the world and the fastest growing in Europe, Norway offers the best ecosystem for entrepreneurs. With its digitally advanced technology and stable political reforms, it has been offering three types of corporate entities to its entrepreneurial audience. These include Norwegian-registered Foreign Enterprises, Sole proprietorships, and Private Limited Liability Companies.

4. United Kingdoms

The cost of starting up a business in the UK is as low as £81 (~100 USD), which is very low as compared to any other country in the world. Low business costs, high labor supplies, and quality of life make it most favorable to the industrial entrepreneurs. According to a study, people in the UK strongly adhere to the thought that hard work can get them ahead in life. The World Bank supports this statement for it to rank amongst the most favorable countries for businesses.

5. Macedonia FYR

This southeastern country, formerly the Yugoslav Republic, has been reforming it’s economic grounds since it’s independence in 1991. World Bank indicates at the pace of economic growth in the country owing to the industry-specific regulations and favorable foreign investment schemes. The country has recently made a mark in its foreign investment policies to encourage non-resident entrepreneurs and businessmen.

For setting up a business, the political atmosphere, the taxation norms, the paperwork, and an insider can prove helpful when establishing a business out of native boundaries.