“Which country is the most attractive market for my expansion in Latin America?” –
“What is the best strategy to enter and conquer this market?” –
“How do I find the right partner to support my business in Latin America?” –
“What are the costs and risks involved in our market entry and how can we control them?”
If you are in charge of expanding your company’s presence in Latin America you will inevitably be confronted with questions such as these. And you will have to come up with the right answers. Every case might result in a different answer, yet there are some generally valid points that every company or investor should keep in mind when planning to do business or invest in Latin America.
Here’s what I have learned in 9 years of advising and supporting foreign companies and investors as Market Entry Specialist in Latin America:
Step 6: Get Help for Your Market Entry: Choose the Right Local Experts and Partners
When you enter a new country you will be confronted with a myriad of tasks and responsibilities such as:
- Finding the ideal partner for sales and distribution
- Meeting your key clients
- Hiring and training the best local talent
- Finding office space
- Forming a local company
- Making sure you have enough liquidity during the startup phase
- Paying your employees and suppliers on time
- Making sure you are complying with accounting and tax regulations
- The list goes on and on
Many of these tasks – if not handled correctly – can result in costly delays, put your company at risk and result in penalties, lawsuits etc.
To make sure this will not happen and that you will have enough time to focus on your key responsibilities, you will need the help of local experts.
There is a saying that it is good to have a lawyer, a physician and a priest as your friends. To do business successfully in Latin America I would modify this statement to: It is good to have a lawyer, an accountant and a consultant with broad local experience who ‘gives it to you straight’.
The attorney will help you with the formation of your company, in drafting commercial and labor contracts and protect your interests in the case of legal issues.
The accountant will help you stay compliant and keep the tax authority happy. If hired in a more complete role as finance manager – either as an employee or external service provider – he can also handle your payroll, payments and other administrative tasks.
The consultant at your side should be trustworthy and experienced enough to give you straight answers, provide honest feedback, explain cultural aspects and will not shy away from telling you the truth even if it is unpleasant. Having such a person by your side as your sounding board will prove invaluable and help you avoid the pitfalls of doing business in a new country. This conviction is based on my personal experience.
In my previous career as executive of a global supply chain company I was tasked with the company’s market entry in Chad (Central Africa), one of the poorest, most corrupt countries in the region with desolate infrastructure. With very little time to set up our logistics and start delivering to our customer, the United Nations, I had to rely on local experts and providers to make things work. But as my employer did not have contacts or previous experience in Chad, I had no other help than my gut feeling to tell apart serious suppliers from empty show-offs. I made some good calls but I also got fooled a few times. Having a trustworthy local consultant by my side, giving me reliable facts, would have saved me a lot of energy, time and money!
Summary: How to choose the right local experts:
- When entering a new market, focus on your core responsibilities and hire local experts to take care of the rest.
- Avoid compliance issues by hiring experts in the areas of law and accounting.
- Look for a local consultant that can help you choose the right partners and suppliers and give you reliable information on diverse topics.
- You make the final decision. Hire for experience and trustworthiness and listen to your gut feeling!
Following the 9 steps during your market entry process will bring you a big step closer to success. At Ongresso, we help you unlock the potential of Latin America by assisting you with successful market entry and long-term growth in the region.
Contact us to set up a free consultation to talk about how we can help you succeed in Latin America.
Daniel Breitenmoser is the Founder and CEO of Ongresso, a Market Specialist in Latin America who assists foreign companies with market entry and the achievement of long term success in the region. In his 9 years in Latin America, Daniel has helped an extensive list of clients across a variety of industries understand local business culture and implement their business model. His passion is to share his knowledge with like-minded people to jointly unlock the potential of Latin America. Originally from Switzerland, Daniel has found his new home in Medellin, Colombia.
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