5 Secrets of Successful International Entrepreneurs
Starting a new business is always a challenge--the U.S. Small Business Administration reports that only 50 percent of new businesses are still around after five years. And starting a new business overseas can be even more challenging. International entrepreneurs have to negotiate different cultures, economic markets, laws and tax structures. Despite these challenges, MBA grads are turning to international markets to find new opportunities for their business ideas.
According to the Thunderbird School of Global Management, in a survey of graduates of its executive MIM/MBA programs, 40 percent of respondents are or have been entrepreneurs. Nearly half of these entrepreneurs had both U.S. and international customers, and 50 percent worked with U.S. and international suppliers.
How do international entrepreneurs make it work? Consider these tips from MBA grads whose businesses have crossed borders.
5 tips on starting a successful business abroad
1. Take advantage of business school resources
Many MBA programs offer classes, activities and facilities to help students who are interested in becoming entrepreneurs.
Mitch Gordon, MBA and co-founder and president of GO! Overseas, a student travel website based in Berkeley, Calif., started his company while enrolled in business school at the Haas School of Business at the University of California, Berkeley. Gordon said he benefited from both the material resources and the professional advice offered at his program.
"The professors of entrepreneurship have been very helpful in assisting me with a long-term strategic vision," he said. "Office space from the school was a huge help in getting off the ground in an economical fashion."
2. Learn how to network like the locals
As soon as an entrepreneur gets on a plane to another country, the rules of the game change. Each country has its own way of doing business.
In 2003, Thomas Christel got married and settled in his wife's native Italy, where they founded La Torretta Bianca, a bed and breakfast near San Benedetto del Tronto, overlooking the Adriatic Sea.
Christel advises aspiring entrepreneurs to get to know the country in which they plan to work. "You can't assume it works the same as in the U.S.," Christel said. "You need to adapt to the local culture, or at least try to understand it."
In the United States, an entrepreneur might cold-call a potential partner and quickly close a business deal. In Italy, Christel said, a lot of business depends on who you know or personal connections, so entrepreneurs in the country must network as much possible to grow their business.
3. Consult reputable advisers
International entrepreneurs may work across multiple legal and financial regulation systems. Huda Serhan, MBA and managing partner at Glowskies, a retailer and distributor of paper lanterns and mood lights based in Dubai, recommends that international entrepreneurs check import/export laws, regulations and costs. "The UAE [United Arab Emirates] is a tax-free country, but the rest of the world isn't," she explains. "All these [things] should be figured out previous to entering a new market."
When working in a new country, consider hiring a local expert to make sure you don't run afoul of the law. For example, an international entrepreneur in Italy could hire a commercialist--similar to an accountant and a tax lawyer--to meet governmental obligations, Christel said.
4. Speak the local languages
Although English has become the language of business, an international entrepreneur can reap huge rewards by becoming fluent in the local languages.
"Having a full grasp of the local language is a must; better yet ...multiple languages," Christel said.
Language skills are useful when reviewing local contracts, negotiating with local service providers and motivating local employees. In addition to the spoken language, international entrepreneurs should learn to understand indirect communication and body language, because subtle gestures can have hugely different meanings from place to place. For example, a thumbs-up is an obscene gesture in Egypt--certainly not a good way to close a business deal in Cairo.
5. Look for new opportunities--but be prepared for new challenges
"To become an international entrepreneur, a person must have a relatively high risk tolerance, especially if their product or service is filling a gap in the market where there is no real precedent to draw from," said Selena Cuffe, an MBA and owner of a wine-import business.
Cuffe got the idea for her business after a visit to the first Soweto Wine Festival, where she learned how black vintners were having difficulties distributing their products in South Africa.
"My new goal was focusing like a laser on bringing these fantastic wines and the inspiring stories behind them to the United States," she said. In 2005, Cuffe and her husband Khary founded Heritage Link Brands, based in Los Angeles, which is now the largest importer and marketer of wine produced by black vintners in Africa.
International entrepreneurs should be ready to thrive under unexpected conditions. "My initial plan was to start in the UAE and then expand geographically to other countries in the Middle East," Serhan said, but as word of her company spread, clients from places such as the United Kingdom, Italy, France, Seychelles, the United States, South Africa and India ended up coming to her.
That kind of opportunity is part of the draw for international entrepreneurs--and part of what makes meeting global challenges worthwhile.