When you begin a startup in your home country, there are plenty of obstacles to overcome like financing, what method of incorporation, licensing, etc. Any entrepreneur will tell you it takes a lot of hard work and more importantly patience to get a new product or service off the ground. However, if you intend to start a business abroad the hurdles to overcome expand exponentially. From our experience in assisting entrepreneurs in launching scalable startups overseas, we recommend these four things in your initial stages of development.

First, start by learning the local culture BEFORE your launch.

When we use the term culture, we are encompassing an overall understanding of the primary language spoken, how people live their daily lives and having a thorough understanding of what best business practices means in a local context. This cultural knowledge will help mitigate misunderstandings with potential employees, local governments, and your customer base. Most entrepreneurs are chomping at the bit to launch their company and say, “I will learn the language on the side.” This thought is well-intentioned, but inevitably gets put on the back burner.

We recommend that each entrepreneur spends at least one year learning your host country’s culture in a language school or university that caters to expats. Many institutions that work with foreigners have simple requirements (e.g., 10 hours per week of class time to get a student visa) and whatever remaining hours can be used refining your startup idea.

Second, scale your startup idea.

Entrepreneur magazine states, “Your time and money are extremely valuable to you. You can’t afford to waste them by investing them in producing a product or service that fails in the marketplace. The more you test your product before you produce and sell it, the more likely you are to earn the sales and profits that you desire.” (1) This advice is just as accurate for startups abroad. Never jump in with a large amount of capital or agree to a lease for a brick and mortar location without doing your due diligence. It is paramount before your launch to investigate if people want what you are offering. One suggestion is to create a small prototype of your product and validate it through social media. Taking this small step can be done through Kickstarter campaigns or Gofundme sites.

Third, seek local advice from an expat lawyer & local accountant.

Seeking help from an expat lawyer and hiring a local accountant are two significant investments that you should include in your startup budget. A lawyer can help you in the incorporation process and file the necessary paperwork with local authorities. An accountant will help you understand your host country’s tax structure, payroll requirements, and fees that keep your startup legal. Finding quality people in those professions can be difficult, so reach out to others in the expat community to get recommendations on who has a good track record.

Fourth, consider the source.

At the core of Solbon is the belief that good businesses affect the source. It’s this concept of social entrepreneurship as an act of managing a business with respect for others in mind. Recent, statistics prove that people want to buy from my companies like this. For example, in a 2015 Nielsen survey said that 66% of online consumers would pay more for services from companies that are socially and environmentally responsible. The same study also indicated that consumer-goods’ brands with a commitment to sustainability outperform those that don’t. (2) This change of promoting purpose over profit is pushing every startup no matter where it is located to consider all aspects of who and what is affected. Make sure to include this in your business plan because money is not the only driving factor in today’s global economy

Sources:

(1) Bryan, T. (2005, August 15) The Importance of Market Testing. Retrieved from https://www.entrepreneur.com/article/79446

(2) Nielson (2015, October 12) CONSUMER-GOODS’ BRANDS THAT DEMONSTRATE COMMITMENT TO SUSTAINABILITY OUTPERFORM THOSE THAT DON’T. Retrieved from https://www.nielsen.com/us/en/press-room/2015/consumer-goods-brands-that-demonstrate-commitment-to-sustainability-outperform.html