CEO of quest project to “Leave the room” Artem Kramin sent a letter to the editor with a story about common mistakes, which are peculiar to Russian entrepreneurs in conducting business abroad. The author has experience in opening business in many countries of Europe and provides practical examples of what not to do when starting a project abroad. Opening for the last two years a dozen overseas branches and nassibov all sorts of cones, sharing so much experience. Opening a business in a new country, please deal with her mentality and habits.
For example, in Spain all the shops, and all services generally closed mid-day for a long Siesta. The only exceptions are cafes in tourist areas. At first, this seems wasteful shocking. After all, how much can you earn in those two empty hours when all competitors in the district are closed. Hard-working Arabs who work without breaks and weekends and are always closed two hours later, seem visionary expats who will succeed in such a lazy environment.
However, after some time you begin to notice that in a Siesta and no one really goes out for shopping. Yes, and you prefer to go for seafood to the local Jose in the late afternoon, when he was sure opened. Habit to take a break during the hottest time was so strongly rooted in centuries the people of what is now its essence. To work in a Siesta, still rowing against the wind sweat, but will move a couple of meters. If you remember this rule the next, deeper level, it becomes clear that in accepting you as a person with his individuality, your potential customers will be pleased if you, in turn, will take their habits and stereotypes in regard to your business.
A perfect example of this rule, I think, is Yevgeny Chichvarkin, who for several years working on the most complicated of the London wine market. On the one hand, it is interesting, original and is the face of your store. On the other, he plays Polo with Prince Charles, and diligently teach the language, and the shop itself is located in the exclusive area of Mayfair, is English to its very Foundation. As a result, excellent results, the respect of buyers and a large number of customers from the local elite. Everyone knows that Eugene is Russian, but he does in English.
In contrast to Eugene to give you another example from the same London. This restaurant marivanna restaurants. Deliberately splint with Russian blini and caviar, a bear in chains, and soup. Fortunately, a layer of Russian, nostalgic for the herring under a fur coat and dumplings, in London, presents widely, but because the restaurant is successful. However, local there almost do not go.
For one restaurant is not terrible, but to build a large brand in this approach is hardly possible. Insights. Keep a personal identity, but try to build a business in reality. Looking for staff among the locals, learn the language, learn the mentality. A typical Russian approach, in which the building is constructed first, and then retroactively prepare the documents, kill your European business in the first months of work.
On the one hand, regulatory authorities here look nezlobnaya and even fluffy. The situation when in the morning comes the fireman and closes you for a couple of weeks “before clarification of circumstances” here is just unthinkable. Almost any violation, you will simply write an order to “eliminate the problem” and will give it a sane time. So whats the problem. Construct, and then execute.
The trouble is that in Europe there are quite strict and detailed requirements to almost everything in the world. The size of signs, the area of the toilet, the height of the threshold, the capacity of the ventilation, size of Windows, color and material of the facade, type of cabling — all of this there are rules and standards. Break the trifle — get the prescription correct. Agree to extend the ladder 50 centimetres — a dubious pleasure. Not correct.
There is already on the court and closing. And bribes here will not help. Its a lot easier to initially attend a normal architectural solution for your store or cafe, to be agreed in advance with administration and then to live in peace than building everything on your own, then get a reference to the construction of Elevator for the disabled instead of a simple ramp. Besides, done properly, the documents are guaranteed to protect you from “folk activists” or conflicts with the landlord. We have, for example, one in Germany had a conflict with the inhabitants of the neighboring house, which for some reason decided that we plan to open in our basement “a place for bdsm parties”.
They dashed off a large claim to the local town hall. However, normally made of paper and a couple of visits of representatives of the municipality have resolved all the issues. A similar situation was recently in Moscow where Orthodox activists rallied at the construction site of a plant for the production of condoms. Than there the story ended, everyone knows. Insights.
Think about the documents for a month before they may need. If you are building a business for a long time — the paper must be in perfect order. Lets be honest — when planning to start a business in Russia, hardly anyone thinks about taxes. We all take into account the rental of premises, costs of materials and wages which will be paid on hand, but rarely calculates VAT or deductions for social insurance. As a rule, these figures remain “in the process we will understand,” as a result, “let the accountant think of something”.
In the United States and Europe do not succeed. The meticulous collection of taxes is the alpha and omega of the European approach to the business, and accruals for salaries are often associated with life insurance. Tax inspectors are working on the conscience, without looking at the authorities and the size of the tax base. In the last six months while Im in Barcelona, the whole country rocked by two high-profile scandal connected with this subject. Montserrat Caballe got on fictitious residence in Andorra and try to escape in this way from taxes in Spain and barely escaped a huge fine and probation.
Followed by the icon of all the fans of world football Lionel Messi received a 21 month suspended sentence and a €3 million fine for the use of clever tax schemes. On the other hand, the approach of the tax authorities may surprise the experienced Russian businessmen for its informality and democracy. For example, two years ago in preparation of tax reporting in London, we are faced with the need to include the cost of regular purchase of vegetables and flowers at a nearby market. Trade with it, but because without any checks. In our Russian understanding, to include these costs in the Declaration, nothing was impossible.
However, our consultant on this greatly surprised us by proposing to simply write a letter, saying, “Im-so-regularly buy bouquets of flowers here in this market for the total amount of such”. Date and signature. This document accepts the tax as a reason to write off expenses. The word of a gentleman really has weight. Insights.
Please check what taxes you have to pay. Most likely, it will be a decent amount of about 20-30% of net profit. Not to take them into account in the calculations — destructive practice. Choosing the city to open its business and, therefore, the place of his future residence, many entrepreneurs are guided by impressions from their holidays and travel guides: All these promises are ignoring a very important point.
Moving abroad with your business, you may first time have the unique opportunity to choose a unique location for your business. A city that will suit your business style and financial. You need a large and paying audience. Look at Paris or Berlin. Requires a high concentration of students.
Consider student towns in the UK. Want to earn on tourists. Includes Florence, Rome and Barcelona. Russian language courses, if honest, will be more in demand in Kazakhstan, scooters in the cities like San Francisco, and quasi-medieval design has long been all tired. Also, dont forget that the tour experience is often radically different from the experience of permanent residence.
Los Angeles is divided into the districts of the city, which has its points of attraction, each of which is full of life. However, between areas the people traveled by car and rarely walk. New York- surprisingly littered the city with a small number of parks. This observation contrasts sharply with the tourist impression of Central Park. But be honest, the locals out there to take a walk only once a month, spending most part of my life on Avenue F, G and H in Brooklyn.
In addition, in your case, most likely, there are some constants that you will have to be considered. Each country has its own visa rules and you will fit one or two option of all. However, when you know the country, leave yourself room to maneuver, choosing the city. For example, one of our partners, clearly defined Italy as a country, have studied all the possible perspectives from business point of view. As a result, the rim has fallen off due to the presence of strong competition, Florence and Venice because of the dominance of tourists in Milan he just didnt like, and live in the South in the summer is problematic because of the terrible heat.
In the end, our games opened in Turin city in Northern Italy. Hes the perfect size, with a large student community and sane prices. Conclusion. Perhaps for the first time, you have the opportunity to choose ideal conditions. Should not this opportunity be neglected.
This recommendation seems contrary to the first thesis, but let me explain. Russian culture, which carrier are you on, business experience in the Russian reality, this slight paranoia that we have all the Russian expats, is your unique properties which you are positioning in a new market. The authors of the book “My neighbor is a millionaire” analyzed the business results of immigrants in the United States on a national basis. And found an amazing thing. All three waves of immigration from Russia in the 20th century gave America a great many successful entrepreneurs.
Moreover, the percentage of successful entrepreneurs are higher than from any other country. I dont know what we feed, but the result is visible in the figures. If you remember, Steve jobs was the motto “Stay hungry, stay foolish” (“Stay hungry and foolish” — approx.ed.). And I think that our generation, the generation of the children of Russia from the 70s and 80s, fits perfectly into this formula. I still remember the coupons for oil and meat in 1991, these pink and green.
And I remember the shelves of the stores in Kazan. And perhaps its this memory that wont let me sit still. Shake that got all of us on the change of times, is a unique experience denied to European and American entrepreneurs. The only task is to use this experience in a constructive way, sublimina it in and. Creating new ideas and businesses.
Email us at [email protected] if you have an interesting story or a view on a market topic. Dont be shy — we love readers letters.