Why Starting a Business Abroad May Not Be Right for You: Considerations Before You Take the Plunge
Previously Published on TheBlackExpat.com
Moving abroad can provide a variety of professional opportunities. I’ve written about some of the many considerations you should think through before starting a business abroad, now I’ll go over the reasons why starting a business abroad may not be for you.
If You’d Really Prefer to Work for an Employer Abroad
Excellent business ideas and businesses may be formed by people who are unexpectedly laid off from their employer or simply out of necessity. However, if you would really rather be working for an employer abroad for financial stability or any other reason, that is valid and you should do that. You may have to be flexible on location, position, salary, or a whole host of other factors.
But if you’d prefer to work abroad with an employer, I strongly urge you to seek out a qualified headhunter or recruitment agency to make that happen. Too many people believe that finding a job abroad is or will be too hard so they think that entrepreneurship is the easy way forward. However, that is definitely not true for many. Making a business successful, acquiring and sustaining profitability is not necessarily easier than getting a job abroad. I’d only suggest embarking on entrepreneurship if it is your desire to leverage your skills and talents into your own venture.
If You’re Looking To Make Fast Cash
Entrepreneurship is not a get-rich-quick scheme; ask the people who seemingly have overnight success (read: just became more visible due to a major feature in a magazine or on social media or a television program). Even people who are met with immediate demand once they hang their shingle for business, know that demand and interest do not necessarily mean fast cash. Great sales often require the expenditure of funds to maintain or expand systems to deliver the products or services.
Many factors may take a ‘big bite’ out of your dreams of a fast cash endeavor, such as your overhead costs, like the cost of developing or manufacturing your product or service, delivery costs, marketing, and so on. Overhead costs could balloon directly with an increase in sales, which means immense sales don’t necessarily translate into immense profits, depending on your margins. Some profitable business owners don’t take a salary from the business for years because of the need to reinvest profits into the business to continue growing. Obviously, this is extremely dependent on the type of business you have, among other critical variables, but most legitimate business endeavors are not fast cash schemes.
Your Finances Aren’t In Order
If you are experiencing financial instability, I would not recommend starting a business abroad full time. It may be in your best interest to start with a side hustle, gain some financial breathing room, then try to go full time. Due to my aforementioned belief that most businesses are not and should not be thought of as get-rich-quick schemes, experiencing financial instability with the pressure of ‘having to make a business work’ is often too much for anyone to bear. It works for some people but not for others, therefore I suggest making sure you have a financial safety net (savings or a full-time job) that can support you and your family while getting started.
Low Tolerance For Risk
Entrepreneurship can be a gamble, there is some amount of risk you must be able to stomach. Depending on the venture and the investment required, you should ask yourself (or write up in a business plan) when you project:
-to break even (when you will recoup your initial investment).
-you will be profitable (making money in surplus to your cost of running your business).
-you will be able to pay yourself (for real).
Not everyone can withstand this type of uncertainty or can only withstand it for a specified amount of time (and not a day more). Even with the most carefully laid plans, the unthinkable can still happen – like a global pandemic, for example – so assess your and your family’s tolerance for risk to determine if launching a business abroad is for you. Perhaps determine a deadline for profitability that works for you, such as ‘if this business is not profitable, meaning making x dollars (and I’m able to to take x dollars out of the business to pay myself) by six months or one year, then I’ll find a job, go to school, pivot in some way’.
Unwilling to Pivot
If you’re unwilling to be responsive to the market, your business won’t succeed. Remember, you’re providing a product or service that in essence should solve a problem faced by your target market. Refusing to listen to the people you hope will become customers, take their feedback into consideration, or refine in a way that your audience requires will not be fruitful.
In addition to it being a poor way to treat prospective clients, you may lose out on valuable insights by being inflexible and also miss out on your next great business opportunity! So although you may have the next great big idea or you just know a certain business will really take off, if you are inflexible or unwilling to be molded by market feedback, if you’re unwilling to pivot your business to be responsive to the market, then you shouldn’t launch your business. A business is constantly iterating due to external factors like trends, audience taste, logistics, taxes… If you’re unwilling to be flexible then you will most likely break and business is not for you.
You Don’t Have A Clear Vision, But The Idea Of Having Your Own Business Sounds Appealing
I believe in having a well-researched and tested business idea. I don’t think a lot of people have the capacity to be able to move to a different country and fling themselves into entrepreneurship without a vetted idea, community support, or target-market knowledge. If you’re interested in launching a business but you’re not sure just what business it will be or you’re lacking clarity, don’t just fling yourself into it. I recommend taking more time to think about the problem you’re trying to solve and the people you want to service. Perhaps interview some of the people that you think are your potential target market to really assess their needs and desires.
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