Find out some tips which you should consider before expanding your company into this amazing Latin American country
If you are reading this, then congratulations are in order. If you’re seeking to expand your business, that means you’re doing well at home and want to grow. But doing so takes care and preparation. If you chose Brazil as the next market for your business, then there are a few things that you should be aware of.
Every part of the world does business differently. Business culture is the result of laws, financial and fiscal politics, culture, religion, and more. As with any other part of the world, doing business in Latin America has its peculiarities.
There are twenty countries in Latin America, and each one works differently, so caution is required. Here are 6 mistakes which you should avoid if you want to expand a business to Brazil.
What to consider before expanding a business abroad?
You are probably very excited to expand your business internationally – as you should be. But don’t jump in without any preparation. All steps towards successful growth require smart planning.
Keep your goals in mind. Start with a business plan, which should answer these three questions:
- What do I want to achieve?
- How can I achieve my goal?
- How long will it take me to reach my goal?
The answers to these questions will help you to start planning your expansion. At the risk of sounding obvious, seeking out information is essential. Here are a few things that must be looked into when selecting a new country to expand into:
1- Market Research
Concise market research should never be underestimated. There needs to be a market demand for your product, but in addition, the market in question has to be feasible for you.
Market research will yield plenty of valuable information and metrics, including:
- Evaluating the competition
- Identifying how to transition smoothly into a new market
- Predicting how the market will receive your entry
- Planning a solid strategy
Competent market research will also provide you with the characteristics, impulses and patterns of your would-be customers.
2- The local economy and political system
It may seem like you’re entering into an unknown territory, but that doesn’t have to be the case. Consider the economy and political stability of your chosen destination before expanding. Are there any economic or political risks involved?
Check local inflation and its impacts on P&L, HR, salaries, cost of living, custom procedures, and operating licenses, for example.
Knowledge of these indicators will safeguard your growth going forwards.
3- Local laws
This should go without saying, but you’ll need a good working knowledge of your chosen country’s rules and regulations. Each country has its own rules and limitations for businesses, which determine what you can import or trade.
Make sure to research local laws governing employment, trade, corporations, taxes and investments, and ensure they won’t limit your growth.
4- The local culture
Another barrier to be overcome is the language and culture of your new destination. This may seem like a minor concern at first glance, but they can seriously affect your performance, especially when the time comes to build relations locally.
Make sure that your marketing and branding strategies are focused on the particularities of your chosen country. If you are the local spokesperson for your company, be attentive to cultural differences in order to keep relations respectful and make assertive statements.
Expanding a business to Brazil
First things first. One common error among foreign companies is to think that all twenty Latin American countries are the same. They are not. Latin America is a vast, growing, and culturally rich region, and every single country is unique in its own way.
If you choose to take your company to Brazil, keep in mind that it is the only country in Latin America whose official language is Portuguese. This is the first potential mistake you should avoid when expanding a business to Brazil.That’s not all. Here are some other mistakes which can affect your business in Brazil:
1- Not doing your homework
A company that doesn’t research the local economy, laws, and political system is bound to fail. That’s a fact.
2- Acting just like at home
Don’t standardize your procedures all over the world. Adapt them to the local Brazilian culture.
3- Hiring more expatriates than locals
Hiring the best employees for your company seems like common sense, but be careful not to take on too many expatriates. Value local minds, and don’t hire Brazilians for manual work only.
The country is full of-skilled labor that will bring a fresh viewpoint to your business, and bring it closer to the local market.
4- A standard company culture
Here’s that standardization issue again. We’ve already seen that keeping things as they have always been is not the smart way forward. Your company’s culture should take local values and behaviors into account, since this will increase productivity.
5- No patience for bureaucracy
Brazil is one of the most bureaucratic countries in the world – get used to it! This isn’t necessarily a bad thing. It just means that the rules are clear and need to be followed objectively.
Brazil’s considerable bureaucracy leads to accountability and transparency in relationships between private entities and public authorities.
6- Thinking Brazilians are all the same
This is the most important mistake to avoid. Brazil is a country the size of a continent, and each of its 26 states has its own quirks, influenced by immigration, proximity to other countries, and the after-effects of colonization.
- Brazil is home to the descendants of immigrants from Portugal, Italy, Spain, England and more.
- The country borders Colombia, Venezuela, Guyana, French Guiana, Suriname, Peru, Bolivia, Paraguay, Uruguay and Argentina. These cultures affect behaviors in border areas of Brazil.
Don’t give up
Don’t be discouraged. It seems like a lot to take in, but it will only ensure that you experience healthy and successful growth in the country. If necessary, hire a local agency to help you with the research and implementation of your expansion strategy.
Remember that Brazil is an expanding country, and one of the ten biggest economies in the world. Expanding your business to Brazil is usually an excellent idea. So be prepared, and break a leg!