Starting any business is a complicated prospect, and it can get even more so when you’re planning to start operations in another country. You may already have a business and you’re simply hoping to branch out and elevate your business, or perhaps you want to set up your business in a different country and start it from scratch.
In any case, it’s important to make sure that you know exactly what you’re doing before you set up any business. Starting a company is an investment of your time, effort, and money, so you should try to ensure that you get started on the right foot. This guide will help you through the process.
- Your Business Idea
Every business starts with an idea. Whether you’re planning on setting up a small side business to give you an extra trickle of income, or you hope to start a business that will support your household and continue to develop, you will need a solid and tangible business idea before you can go any further.
Ideally, you’ll have come up with a basic idea when you decide to start a business. The two tend to come hand in hand. If not, think about your talents and what you have to offer. What qualifications do you have? What services or products could you deliver to potential customers?
As well as considering what you have to offer, you also need to consider what your target audience will be and what they will need. This is something every business owner needs to think about, but it’s especially important if you plan on setting up a business in another country.
Once you have your basic idea set in stone, you can set up your business plan. To begin with, your plan may be as simple as an idea and a name, but a business plan is the only way to ensure success. You don’t always need a formal business plan to set up a business, but it does come in handy.
A business plan is essentially a way to clarify your strategy for growing your business. In it, you will identify roadblocks and figure out how to overcome them if they arise. You will also determine what resources you need and, most importantly, decide exactly how viable your business is.
Even if your business plan isn’t optimistic, it’s far better to spend the time putting pen to paper rather than wasting more time on a business idea that’s doomed to failure. This is even more important if you’re taking the extra risk of setting up your business in an unfamiliar country.
- Raising Funds
As well as creating a general plan for your business, every budding business owner needs to make sure that they can raise the funds needed to set things up. The funds and resources you need will depend largely on the type of business that you’re planning to start.
Some businesses, especially small side hustles, will need very little financial investment. You can set yourself up as a freelance content writer with only a laptop and an internet connection, if that’s all you have. Even better, you can work wherever you want, so you can set your business up in your home country for ease and still earn money from the other side of the world.
However, most businesses will require some more investment before you can get them off the ground. You may be able to raise the funds yourself. This gives you complete control over the business, as you aren’t beholden to anyone. However, it does carry more risk. Once that money is gone, you’ve lost it for good.
Another option is to take out a business loan. This is where you will have to do research on the country that you’re planning to start your business in. You will also need to put together a formal business plan. Different countries have different laws and regulations when it comes to taking out a loan, so make sure you’re familiar with the process so that you don’t get caught out.
Finally, many businesses raise funds by involving investors or shareholders. Essentially, someone buys a small portion of your company. This sale raises funds for you to set up the company. The shareholders will earn money as your company grows and earns a profit. As with the business loan, you will usually have to put together a business plan to encourage people to invest in your company.
Getting people to invest in your company can range from an informal arrangement where a friend lends you money to get started, to a service like Go Fund Me where you can ask members of the public to informally invest in your company, to something far more formal involving shareholders. In every case, you should research the regulations of the target country for your business.
- Business Registration and Other Legal Paperwork
Before your company can open for business, it will need to be registered in the country that it’s based in. Most countries will require you to register your business as either:
- A sole trader or proprietorship, where you are a freelancer. A sole trader works on their own and is directly linked to the company. This option provides the most flexibility and freedom, but it also carries the most risk. You are directly responsible for the solvency of your business, meaning that if your company owes debts and goes bankrupt, you’re on the hook.
- A partnership, which is very similar to a sole trader, but you’re working in tandem with another freelancer.
- A limited company, which is a very popular option. The business owner of a limited company is only responsible for the debts that they have invested. This provides far more financial protection to the owners. If the company goes under, then they don’t have to tackle all of the debts accrued alone.
- A corporation is a completely separate entity to the owners. This provides the most protection against debts, but it also provides less freedom to the owners and the initial cost of establishing a corporation is far higher.
One way to make this much easier for yourself is to use a service that can help you set up a business. For example, this package is specially tailored to suit the needs of non-residents who wish to register a limited company in the UK. A package like this can simplify the process of registering your company and, even better, make it far less likely for you to make any potentially expensive mistakes when you’re setting it up.
If you don’t plan to live in the country of your business, then you will likely still need to register a business address there. As well as registering at least a PO Box, you should have someone local nearby who can receive any legal documents or other correspondence and pass them on to you.
As well as the legality involved in registering your company, you will also have to consider the taxes and other regulations before you can get things up and running. Depending on what country you’re in, this may be simple or complicated. If you don’t fulfil all of these legal requirements, however, you can’t legally run your business. You could risk getting shut down before you can even get your business off the ground.
Take some time to learn and understand the rules. Ideally, you should consult experts in the field, so that you don’t miss anything and risk losing your company. Lawyers will be able to help you to navigate the legal requirements of your business and clear up any issues.
- Language and Cultural Differences
Even if you get the legal side handled, your business is still at risk of failing before it can truly get started if you don’t research the language, culture, and economic climate of your target country. This relates back to your target audience.
You need to ensure that there is a need for your product or service in that market, otherwise you’ll waste your time and money. Market research is your best friend, as is looking into similar companies who are established in that country and seeing what they’re doing right or wrong.
Every country is unique. Even two English speaking countries will have major differences in culture and even language. For example, in the UK, some words are spelled differently as they are in the US. You may even find words that have different meanings, so a message that would work in the US might not work as well.
Not only that, but the UK has a vastly different culture to the US. Yes, there are similarities, but you need to know what that audience is interested in before you can make a sale. A US-style marketing campaign won’t be as successful in the UK as something tailored to that audience.
If you’re tackling a nation with a different language and a culture less intertwined with one you’re familiar with, then these issues are even trickier to handle. Always do your research first.