As I’ve said before, starting a business can be challenging and starting a business in a culture or country different from your own is even more difficult. This is why you want to make sure you are taking the right steps to set your expat startup for success. In this post, I’m going to explore three common mistakes expat entrepreneurs make and how you can avoid them.
1. Not Understanding Your Customer
No matter where you start your business, getting out and talking to your customers is vitally important. When your business is not in your home culture, this is even more critical.
We have to understand that our businesses ultimately exist to serve our customers. They will be the ones using your product or service. Even if your business doesn’t sell to individual consumers, there will be someone who makes the purchasing decision and they and/or others will be using or reselling whatever you offer. So you need to make sure it meets their needs.
To do that well, you need to get out there and talk to your customers. This is why it is so important that you spend time in another country before you start a business there. You need to spend time getting to know the people and the culture, and you need to be able to identify and talk with your future customers.
Spending time with your customers and asking them questions will allow you to find out what problems they face and figure out their needs and desires. I recommend you do this yourself and in person. If this is not possible, get someone on the ground to help you identify your customer and talk to them over video. You can use surveys to get a greater sample size, but those face to face will provide better information. Do this as much as you can.
Once you have a good understanding of your customer and their associated needs, desires, or problems, then you can build your product or service around this information.
2. Not Creating Enough Value
For customers to buy your product or service, they have to feel it provides more value than they are paying. This can go hand in hand with the first mistake of not spending enough time getting to know your customer, but not always.
Even if you are able to create a high level of value for your customer, they have to feel your price point falls below this. Research shows that customers feel a heightened sense of joy and satisfaction when they believe they received a good deal.
Please don’t hear that this means you should charge low prices. I am in favor of charging for what you are worth. However, if you want your customers to be satisfied, you need to consistently overdeliver on what they are paying for. This is what keeps them coming back and telling their friends and family about your business.
However, if you charge more than people feel your product or service is worth, they will go someplace else. Even if they view your product or service value as equal to what they pay, they will constantly be on the lookout for better value from your competitors through a lower price or a higher level of value at the same price.
3. Being Unsustainable
In order for your company to survive, you have to make sure your business is going to turn a profit within a given time period. If you don’t know how long you have to get there or you don’t have a plan to reach profitability, you will pay for it.
This is known as your break-even point, when your sales are equal to or greater than your expenses. Until you reach this point, you are not making a profit. As long as your expenses exceed your sales, you will be losing money.
This is how most businesses start. They take a certain amount of time, it could be months or even years, before they turn a profit. One of the things that keeps them from going out of business is having a good understanding of how long this will take and having a plan on how to get there.
To create this understanding you need to know a few things. First, you need to know how much money it is going to take to launch your business. Then, you need to have a good understand of your current cost or expenses and how these will grow as your business grows.
Knowing this information will help you figure out at what level of sales your business will start to make a profit. Then you can look at your cash and see if you have enough money to supplement your current sales until you reach your break-even point.
Because this process can seem complicated or even overwhelming, many business owners don’t take the time to figure this out. However, taking the time to project you sales and expenses and over the next year or more can significantly increase the chances of your business surviving for years to come.
If you try this and it seems complicated, I encourage you to reach out for help because it is a vital step towards growing a sustainable business.
Do This Now
If you haven’t done these three things and are currently thinking through your business idea, I encourage you to set aside some time over the next week to create a plan to think through how you can accomplish these tasks. These few simple things will create a lasting effect on the long-term success of your business.
And if you feel overwhelmed and don’t know where to start, I would love to help. Please reach out to me through the contact portion of the site and we can set up a free 30 minute call to see how we can get you started toward making your expat startup successful.