The Chinese market is rapidly expanding every day, and American entrepreneurs are deciphering the best strategies for growing a successful business in a foreign country.
However, it is not easy. There are several mistakes business owners can make while expanding their business in China. Luckily, business owners can avoid these mistakes while building their company in a new country.
Not adequately prepared for the market
One of the worst mistakes an entrepreneur can make is not understanding their market. Companies should know everything about the country and culture they are conducting business in, and if they don’t, it causes problems including low consumer appeal and improper practices.
For example, eBay is an e-commerce giant in America, but a similar competitor, Taobao, dominates the Chinese market. Why? Taobao understands Chinese consumers want a social and personal experience while shopping, so they incorporate unique features like chatting to help facilitate that retail experience.
Underestimate the time and effort
It takes time for business owners to develop a strategy and hire personnel in a new location. It may take months or years to negotiate property terms, find a local manufacturer, and collaborate with community members and research competitors.
Along with the time commitment, it will take an extraordinary amount of effort to bring the business to life across seas with a small chance at success. If you are genuinely passionate about your business and expanding to other countries, you need to know the level of time and work it will take.
Assume it is a “done deal.”
According to Forbes, there are a lot of factors that may influence a China-U.S. business deal. Many deals fall through because of cultural differences or lack of legal knowledge of those industries. It does not necessarily mean entrepreneurs cannot correctly execute a business deal in China, but it is important not to assume a deal is foolproof until the legal documentation is drafted and signed.
It’s critical for business owners to understand ethical business practices can translate into most foreign markets. If there are concerns or questions people have about bringing business to China, consulting with a legal expert may be in your interests.