As the dollar strengthens against other currencies, many entrepreneurs dream of starting a business in a foreign country.
If that is your goal, don’t pack your bags just yet, you need certain qualities and traits to succeed as a foreign entrepreneur.
This article is a must-read for anyone desirous of doing business in a new country. I highlight the challenges you will likely face and the necessary skill sets you will continuously rely on.
Let’s get started.”
If you are looking for business ideas to start in a foreign country, I wrote a whole article discussing 10 ways to make money as an expat.
Factors To Consider When Starting a Business In a Foreign Country
Before you invest your hard-earned on a foreign business, you want to consider these important factors.
1- Government Incentives
Have you done your due diligence to find out various government incentives in the foreign country available for investors? If you fail to take advantage of favorable financing lines, you could leave cheap money up for grabs. You can later use the money you have saved to acquire competitive advantages.
If you don’t know existing government incentives, you may miss out on tax exemptions and cheap credit lines from the banks. This would put you in a competitively disadvantaged position against competitors who explored these benefits.
You may have saved adequate funds to finance your business, but you will have an added advantage if you can access cheap credit when needed.
2- Available Demand For Your Products
A product can have high demand in your home country, but is it highly demanded in the country you want to invest in?
You can do market research to establish demand levels for the product you want to launch. However, sometimes you can be innovative to boost demand for your product or service.
Determine if there is a market gap your firm will address or specific customer pain points your competitors have not solved adequately. Once you have a solution for these problems, you have a better chance of making huge sales and profits.
3- Competition
Your company will likely compete with local firms and other foreign businesses. So, before launching a business in a foreign country, know your competitors.
You should also know their differentials and how your products or services will likely stand out against theirs. Do you have competitive advantages against them?
If you believe that competition is stiff and your profit margin will be minimal, it is better not to pursue the business. On the other hand, launch it if your market research shows that you can soar against your rivals.
4- Government Bureaucracy
You can survive even if you ignore government incentives; however, don’t ignore government regulations. Local companies can get an easy pass, but new businesses are often met with external bureaucracies in regulatory agencies and government offices.
Filing long forms can look like an eternity!
As a small businesses, countries with bad bureaucracies can make it challenging to operate smoothly. Big foreign corporations do not experience many challenges because they have massive legal departments and plenty of lobbyists.
So, how do you know the best country to start a business as a foreigner? You can consult the Index of Economic Freedom (IEF) to know how countries measure in terms of bureaucracy.
Some countries with tolerable bureaucracy include Hong Kong, Singapore, and New Zealand.
Ensure you have hired a lawyer and an accountant who understands the country’s laws to help you obey regulations. This personnel will help you even past the first year after launch, so don’t let them go after you have become an established enterprise.
5- Infrastructure
Most entrepreneurs considering starting a business in a foreign country rarely consider infrastructure. It may not come to you in the plans, but it is important.
For instance, you may launch your firm in a certain country without internet access. The region may have LTE, but when you want to expand, you may need to invest in additional internet equipment if the area has no fiber-optic connections.
So, establish if the country has a good infrastructure to support your future growth and expansion.
6- Economic Situations
If the country you want to venture into has low debt-to-GDP ratios, strong consumer spending, and a high employment rate, it may indicate a strong potential for success.
You should also look at rising incomes and low inflation as signs that a business can be profitable in these nations.
Nevertheless, you may have to deal with stiff competition because other companies also see these signs.
You might also enjoy reading: 8 Effective Ways to Make Money Overseas Online.
Traits/Qualities Need That You Need To Start a Business In a Foreign Country
Before you move to run a business in a new country, master the following traits. These trains may be similar to the qualities of an entrepreneur, but they are also different in many ways.
1- Be Thick-Skinned
If you need thick skin to succeed as an entrepreneur in your country, you may need double layers to excel in a foreign land.
In some foreign countries, you will be judged and harshly criticized for grabbing business opportunities from local entrepreneurs.
It is essential that you understand how to integrate business cultures and the cultural diversity of the country. You may find some aspects that differ from what you know, but that is the beauty of being an ex-pat entrepreneur.
The language barrier can be a big huddle for you, but even when you speak the native language fluently, you may still not know the culture’s business language.
The judgment and criticism may be upsetting and intimidating, but you will have to deal with challenges in a foreign country.
The solution?
- Don’t take criticism and judgment personally.
2- Ability To Learn The Local Language
Learning the local language seems to be an obvious trait you should develop if you want to start a business in another country. Customers identify with business persons who speak their language.
You may not need to be fluent, but at least have some basic knowledge before venturing into a foreign market.
Even if the foreign country you are starting the business has many people speaking your language, it is still essential to learn the local dialect.
Why should you learn the local language? Learning the native language will enable you to connect with your employees and customers, thus growing your business.
If your want your business to flourish in a foreign land, you must be willing to dive into the culture and immerse yourself in learning the language.
You can use free language apps, but the best way is to communicate with the locals even if you speak a broken version. Practice, practice, and enjoy it as others make fun of you. Sooner or later, you will be a native.
3- Observe The Local Rules
I am not just talking about the country’s legal rules but also the unspoken cultural business rules.
Living by these rules will positively impact your business and personal life. However, you may not grow your business successfully if you are rigid and unwilling to badge to the local custom.
But sometimes you may not know all the local rules about running a business in a foreign country. What can help you?
Consult with local business owners. You can also check local online forums to know these rules; otherwise, the locals may judge your business harshly if you flaunt the rules.
4- Networking Abilities
You want to cultivate networking ability before starting a business in a foreign country. If you have this quality, you may seize business opportunities available overseas.
Although LinkedIn provides an easy way to build professional networks overseas, in-person networking can give you better results. You can meet like-minded entrepreneurs and gather valuable insight from your collaboration.
Remember, networking skills need tact, diplomacy, and listening skills to help you build lasting relationships.
So, learn to build collaborations instead of focusing on selling products or services.
You can also pursue a degree at an international business school where you will likely build a valuable network. Your peers, professors, and those you meet will boost your range of skills and expertise.
5- Interpersonal Influence
If you are to succeed in starting and growing a business in a foreign country, you should be able to influence others. Why is this trait valuable?
Because you can use it to woo investors to fund your venture, encourage employees to accept changes in the business, or persuade customers to purchase your products.
You can improve your interpersonal influence by building professional relationships through networking, communication, and collaboration.
Interpersonal influence is so powerful that it can eliminate hard selling and encourage others to support your ideas. It helps you to be assertive without appearing aggressive.
Interpersonal influence can also increase the chances of success as you pitch for new business, motivate the team, and negotiate business deals.
Final Thoughts
The world has become small, with business people moving easily from one place to another and starting a business in a foreign country.
If the situation in your home country is not favorable for a start-up to thrive, you can cross over the globe and build your enterprise in a different environment.
However, like anything good in life, launching a new business in a new country is not free of challenges. You need patience and understanding to nurture your business and bring it to success.
What is an entrepreneur’s greatest trait before starting a business in a foreign country?
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