Starting A Business Abroad: Is Your Dream Viable?

Posted on 09. Dec, 2009 by Emmanuelle Archer in Blog, Expat Entrepreneurs, Expat Life
3 comments

Since you’ve decided to start your own business, I bet you’ve spent entire nights wondering, “Is it going to work?” Today I’d like you to ask yourself, “Is it going to work for me?”

It’s not quite the same thing. Small businesses don’t fail because the concept itself was bad – most ideas can work, with a few tweaks here and there, or a different business model. The majority fail because the idea wasn’t a good fit for the owner’s personality, goals or circumstances at the time.

You have a dream for your business (what fancy people call your vision), and for you to succeed, your dream has to be compatible with your current location, your lifestyle and your ambitions.

Ready for a little reality check? Here are some questions you should ponder before you go any further.

Your host country

- If you are starting a local business, how relevant to that market are your products or services? How much market research have you done? Who do you know who could point out cultural, religious or economic factors that you may have overlooked?

- If you are doing business internationally, what image does your host country have in the rest of the world? Can it impact how clients see your own company?

- Is corruption widespread where you live? If so, are you prepared to deal with it, and how?

- How much red tape and what tax rates are you looking at? Starting a small business in some countries can be a bureaucratic nightmare, and sky-high taxes will make it harder to become profitable.

- Are there frequent strikes, political instability, or natural disasters? How reliable are the telecommunication infrastructure and the postal service? How will these factors impact your business?

Your personal circumstances

- Can you speak the language reasonably well, and do you have strong local networks? Even if none of your clients are local, you will still need to fill out government paperwork, and you’ll need someone to help you troubleshoot your computer – the more connected you are, the better.

- If your start-up budget is limited, think twice before opening a brick-and-mortar business where you’ll have to pay for a lease, staff, stock, etc. It is much less expensive to start an online-based service business, and you can usually keep working full- or part-time while you’re growing your client base.

- Do you have children, or other relatives who depend on you? How easy will it be to find someone to look after them while you’re working?

- Do you have health issues, or does a certain disease run in your family? Make sure that you have adequate health coverage, even if it is expensive where you live. What is your contingency plan in case you’re not well enough to work for a while?

The lifestyle you want

- Is your business model compatible with the kind of money you want to make? Any business where you trade your time for money – be it consulting by the hour or making crafts to sell online – means that your income is capped once you reach your maximum capacity. If an affluent lifestyle is what you’re after, you need to look at other options.

- If your priority is to travel, spend more time with your children, or pursue a favourite hobby, you need to structure your business to be as flexible as possible. Online-based service businesses and location-independent “portable careers” are probably your best bet.

- If you tire easily, or if you want to take time off regularly, forget about opening a restaurant, a B&B or a retail shop – the hours are long, you’re on your feet all day, and you need to be physically present at all times. Even if you can afford to hire permanent staff, it will take time and a lot of training before you can leave them on their own for extended periods of time.

Back to the drawing board? Not necessarily

If your business idea passed this reality check with flying colours, congratulations! It sounds like your concept is well thought out.

However, if any of these questions made you a little uncomfortable, or caused you to worry, don’t despair!

For one thing, it’s much smarter to address these concerns right now, before you invest any more time, energy and money in a business that isn’t going to give you the results you want.

It also doesn’t mean that you have to give up on your idea altogether. Most likely, all it needs are a few tweaks here and there: maybe find a way to sell online rather than through your own shop, or create additional streams of income so that you don’t have to be hands-on 24/7.

If you truly believe you’re onto something, don’t give up – gather some friends for a brainstorming session, use a bit of creative thinking, and watch your initial idea blossom into a viable and even more exciting business concept!

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Emmanuelle

Images by Scoobymoo (top) and iwantamonkey (bottom), both via Flickr Creative Commons“