Building a successful business in Asia... Australians, don't check your brain in at the airport!


Right now, I'm in Kota Kinabalu, a delightful spot in the north of the island of Borneo. There's a real estate expo going on in the shopping centre downstairs and I have overheard lots of Australians here talking to the real estate agents at the expo about moving to Sabah and setting up a business. There are significant business opportunities for Australians in Asia. Those considering opening businesses in Asia should, however, be aware of the pitfalls than can befall any person trying to establish a successful business.

Asia’s rise to strategic and economic prominence creates thousands of business opportunities, seemingly on every street corner. But the Asian landscape is littered with the remnants of Australian businesses that decided to set up here. They ploughed money into these ventures to see little or no return on their investment.

Whilst working across Asia for the past 10+ years, I have witnessed, first hand, the enormous number of people/businesses who have returned home with their tail between their legs after dropping a heap of money. Typically, Australians make a number of similar, fundamental mistakes. I have summarised the most common that I have come across below:

Cultural norms and hierarchy.

Many of the problems Australians have with Asia are founded on the lack of understanding of the culture and hierarchy that perpetuates throughout Asian societies and work places. This hierarchy is a powerful controller of behaviour and it affects staff and their relationship with managers. There are thousands of websites/blogs/YouTube videos that outline doing business in Asian countries, but Australians continue, generally, to ignore this information.

Even recently, a friend from an Australian IT company that is currently establishing a regional office in Bangkok was telling me that the Asia Pacific Regional Manager (who has never been to Asia) was offended when he told her that managing in Asia is different to Australia. She told him that the staff who would be recruited "would have to work in her (Australian) style if they wanted to work for my company." I have been making a list of Filipino beliefs that I hear. Here are some of them (more on these in a future article)...

  • Don’t cut your nails during Tuesdays and Fridays;

  • If you eat dark coloured foods when you're pregnant, your baby will be dark skinned;

  • Don’t sweep dirt all the way to the door because all your blessings will be washed away;

  • If you eat food from the plate that a pregnant female has been eating from, you’ll get sleepy;

  • Taking a bath in the afternoon or at night causes anaemia

How can an Australian manager really believe that staff will follow an Australian style of working when the fundamental beliefs are so different? Take the time to get to know the culture of the country first before trying to impose any type of management style model on Asian staff and you'll greatly increase your likelihood of success.

Relocating to Asia.

Australian staff typically do little to prepare themselves for conducting business in their respective Asian country. Many do not understand the local cultural norms, especially those relating to the way that business is undertaken. It’s akin to playing a board game blindfolded and nobody has told you the rules.

When you 'clink' beer glasses in Asia, it’s often a sign of respect to clink the glass lower than the Asian person you are entertaining. It’s knowledge and execution of thousands of these subtle cultural differences that may well be the difference between success and failure on that proposal you have been working on.

Lack of management oversight

I previously completed a project in China reviewing the security policies, procedures and programs for a large European multinational. They were losing IP which had resulted in a reduction in their China revenues of more than 33%. I learned during the four week project that there were no policies, procedures and programs in place. The entire operation was run by locals and there were no European managers providing oversight. After submitting an extensive report and briefing to the local management, with an offer to assist / resolve the issues, it was not surprising that there has, to date, been no action to implement any of the corrective actions. And the reason why, because local management are profiting very nicely, thank you.

I have frequently witnessed the ‘we don’t need expats’ syndrome throughout Asia – Asian branches of companies start objecting to expats holding management positions within the country branch. They say things like, “we want to employ locals – foreigners cost us too much” or “a Westerner is not a better manager than a local”. In most cases, the Western companies fall for it and suddenly regional management has little oversight on the day to day operations of the branch. Before long, operations are not being run as effectively and revenues stall or begin to reduce. The reality is that mafia-type organisations can quickly become embedded in Asia-based organisations. These groups exploit the lack of oversight and the reluctance of subordinate staff to report the irregularities and skim funds through other means.

An example of this was a review I completed on a department of a large multinational oil company in the Philippines. The position of country security manager was the last position held by a Western manager, however, at the insistence of the country chairman, the regional management caved in and the position was filled with a local applicant. As a result, the review I conducted established that the department was probably losing more than US$5 million a year due to fraud and business practices that were not in line with the company’s code of conduct. Once that expat was removed, the gloves were off and the local staff were forced to collude and became nothing more than members of a local organised crime network.

If you establish a business in Asia and think it's ok to head home to Australia for Christmas for 4 weeks, think again...

Lack of controlling ownership

When Australians arrive in Asia, many literally check their brains in at the airport arrivals area. One of the typical brainless activities they will do is to go into business with a local person, be it their Thai girlfriend, girlfriend's brother-in-law or some person they met at the local pub. In many Asian countries, foreigners are not able to own a majority stake in a company. In Thailand for example, the most an Australian can own is 49%, so the Thai girlfriend will typically own 51%. I remember meeting an Austrian fellow on his last day in Thailand. He had built up a hugely successful motorcycle rental business in Phuket until one day his Thai girlfriend (and business partner with 51% ownership) told him to leave. He had no legal recourse and lost everything... business, life savings, great lifestyle and had to return to Austria and find work.

There are a number of legal ways to get a controlling interest in those countries where there are some limits placed. Taking the time and doing the home work on business ownership instead of blindly trusting people you barely know will reduce the risks and save your precious monies.

Establishing a successful Asia based business?

To get your Asian business into a position to succeed, I recommend you implement the following:

Opportunity analysis:

An initial step, before you write the business plan and start operating, is to undertake an opportunity analysis – is there really an opportunity for you to establish a business in Asia? There are a number of companies (including mine) that provide these services. Spending a small sum of money at the start to undertake an opportunity analysis will probably save you tons of money in a failed venture down the track.

Keep costs down:

Keep your costs down as low as possible. Unless you absolutely have to set up in a particular location, I’d recommend you select a low cost country to establish your business. Cities such as Singapore, Hong Kong and Tokyo are massively expensive, especially in relation to office and apartment rents. Cities such as Jakarta, Bangkok and Manila are much less expensive to operate from. After living in Singapore for 5 years, I then relocated to Bangkok and I did this for a number of reasons, but primarily because 1 month of rent in Singapore = 6 months’ rent in Bangkok. Please note that the cost to incorporate your company in these low cost locations maybe higher and the process is much longer, but the cost savings of living and running a business are significant.

Sometimes however, it’s not only about cost – it’s also about where is the best location for the business to establish. An Australian software company previously approached me. They were unsure whether to set up in Manila or Bangkok and were seeking guidance. Manila was the significantly cheaper location and provided the company with the IT skill pool they required but the company was also focused on staff security, safety and quality of life. I completed a detailed analysis and presented the facts to company’s board and they used the facts to make their decision (Bangkok won).

Do your research:

Don't assume that because you were on holiday there once before and you liked the location that it's the best for business (as so many do!). Take 3 months and visit numerous Asian cities and make contact with people on chat sites and blogs and really get the low-down on each location. Find out who the people are that offer advise that you can trust in each country and make contact with those people (there are so many shysters out there including Australians who make out that they have the knowledge... but they don't). Use your brain and keep notes on each location and identify the pros and cons of each. Try to identify numerous business opportunities and use an application like Idea Growr to record your ideas.

Conclusion

You still need to do the hard yards and research, research, research to make your business successful, even if you're wanting to move to Asia, enjoy the Asian lifestyle and set up a successful business. Don't make the mistake that many do and, upon arriving in Asia, leave your brain in the airport. Keep your Australian brain with you and you'll greatly increase your chances of business success.

If your website is more than 1-year-old, you’re missing an extremely powerful tool in your marketing arsenal.  Read on and I’ll explain why.

How effective is your current business website?  Assess it using our website self-audit tool. Details below.

Had a really interesting chat with a former Hewlett Packard colleague of mine last week. He needs a website built for his new business and we were stepping through some examples of websites that he likes.  What was interesting was that he gets it...that websites are a powerful tool for attracting customers, then engaging them, then getting them to purchase the product/service.


My former colleague shared 2 examples with me of websites that are at either end of the effective websites spectrum.

 

 

What you’ll notice when you open both is the differences across a number of parameters.  
Here’s some of the key components that make a 2016 marketing effective website so powerful.
Websites are powerful marketing and selling tools
Websites, like fashion, change frequently. That website of yours from 2014 is now out of date. Contemporary 2016 websites have been designed around selling psychology and engagement.  The format these websites are based on is a tried, tested and proven formula. Utilising this formula is a way to increase engagement and sales. If you’re not updating your website, you’re losing ground to your competitors.
Bold colour and minimalism.
Modern websites feel spacious.  Each page uses lots of open space, which, when paired with bright, flat, bold coloured shapes and images, create visually engaging moments.  The engagement happens from when the website opens and banner is a high definition stock pic. The minimalism that applies to the pages also applies to the number of pages, hence the move by some businesses to have minimal pages and, in some cases, a single page.
Tagline
It should be clear from the moment of opening the website what the business is offering.  The website should have a tagline that succinctly tells what the business is.
Content
Content continues to be king.  Adding value to people’s lives and helping them solve issues will develop loyalty, confidence and trust.  You have included a blog on your website that is regularly updated.
Giving before receiving
Offering viewers value from the moment they open the website is important and effective.  Another former HP colleague of mine is very effective at this - he offers a 30 min no obligation personal branding consultation and gets high conversion based on this. A website offering free stuff with no expectations adds to brand loyalty, confidence and trust.
Free – budget – moderate - high end
2016 websites will typically offer a range of options for the product or service. The base level is typically free – product can be tried but it may have only basic functions or limited time only offer, but gives users confidence and trust in the product/service. Fee paying options are then offered with a budget option then some additional levels which offer more functionality.
Mobile devices
Websites are no longer viewed mainly on PCs.  In fact, in some countries, more than 50% of online purchasing is now done on smart phones and tablets.  If your websites is not ‘responsive’ and unable to effectively reformat for these devices, or if your online purchase buttons don’t work, it’s possible that 50% of your viewers (and potential sales) are lost.
Constant updating
Because of the way websites are radically evolving, websites are no longer the ‘make and forget’ part of the business.   They are now dynamic core components of a business’s marketing program that need to be regularly refreshed and completely updated at least annually.  If your website is more than 1-year-old, it should be rebuilt in the 2016 format. By not doing so, your cluttered 2014 website with the side bar might be one of the factors contributing to that stagnating sales growth.
Pricing
The kicker for getting a new website build has always been cost, but that’s no longer the case. The highest quality websites with all the bells and whistles (including ecommerce), can now be created at super low cost. For example, my company are currently offering $150 stunning WordPress marketing-effective 1 page websites (http://www.asiaoffshoring.com/#!web-development/zoxdi), Our competitors charge similar prices.  Stop paying $10,000 for a website – there is absolutely no need.  Utilise low cost website services and put the remaining funds into your online marketing budget, or hire another social media specialist (offshored) to support your digital marketing program. (http://www.asiaoffshoring.com/#!virtual-staff/ya439).
Finally...
Getting a new website is no longer about providing viewers with a shopping list of products and services.   Utilising the latest web designs to create engaging websites means that you’re also utilizing marketing-effective websites based on recognised selling psychology.  If you’re not creating the websites of the ‘now, you’re negatively impacting your marketing strategy. 
How effective is your current website?  
Take a moment to see how your website aligns to 2106 marketing-effective websites. Try our website self-audit tool at http://www.asiaoffshoring.com/#!web-development/zoxdi
Andrew Styles is a highly regarded regional expert in utilising Asia for offshoring management He is also founder of Asia Offshoring Inc, an Australian owned business increasing profitability through the provision of digital and virtual services to Australian businesses. For more details, see www.asiaoffshoring.com 

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