Doing business in Latin America: Five top tips for micro firm owners
As a vast and complex region of over 600m people and 20 different countries, Latin America is not an obvious choice for those new to exporting. But if you have a specific interest in the region, Gabriela Castro-Fontoura explains how to dip your toes into the market.
With 20 different currencies, legal and tax systems, Latin America can be daunting region to consider as a beginner at exporting. But many micro business owners might want to at least dip their toes into exporting to this region.
So what can you do if your find yourself tempted – or pushed to – export to Latin America, and you only have a handful (or two) of people in the business?
(1) Make sure Latin America is for you
If you’re approaching this region as a micro business owner, make sure you have a good reason for it. I have found one-man vans and tiny businesses across the UK succeeding in Latin America. What’s their secret? They either had very strong links to the region, or it became a strategic imperative to focus on it.
In the first case, it might be valuable personal or family connections that take you to countries like Mexico, Chile or Argentina. I wouldn’t waste those opportunities, but make sure they don’t distract you from your bigger, more strategic plans. Use those connections to learn, and to make further connections that could take you to other countries or to grow your sales in the long term.
In the second it might be that for example, you manufacture a product that is ideal for at least one or two Latin American markets. For example, you might work in agriculture and want to target Argentina, or in bottling and want to target Brazil. Or you might manufacture products that are sought after by expats in Argentina or Colombia. If that is the case, Latin America is strategically key to you and you must be prepared to invest in research and in travelling to the region. Remember that personal connections are very important in our region and that doing everything remotely will have its limitations.
(2) Be careful with what you give away
I have heard of micro businesses owners (and businesses in general, to be honest), giving away the rights to Latin America, to the first good distributor they found, say, in the US or Brazil or Mexico. Never do that. It’s unlikely that this distributor can tackle the whole region, and you will regret it later.
If you are targeting Latin America, you probably have a good idea of why (if you have a niche product that suits a Latin American market in particular) or where to start (if you have connections already). The more you focus, the more likely you are to succeed. It’s great to have a good regional overview, but you will need to focus your limited resources or you’ll soon be overwhelmed.
For example, rather than say you are targeting Chile, how about focusing on the one city, say, Santiago or, even better, choosing to focus on the one neighbourhood. You’ll need to do some digging to know where to pinpoint (unless it’s obvious because of the nature of your business), but the return on that research will be no doubt high.
(4) Use social media
Social media can be powerful for micro businesses. Connect to others on LinkedIn, Twitter and Facebook. Be brave to ask people for help or guidance (do double check any information, though, and remember that everyone’s opinions are relative). Making connections is where social media channels shine, but they are also good for gathering information, keeping up-to-date with news, and doing research.
(5) Get free information and support
There is a lot of basic information out there on the web. Invest time to research it – from country reports (check the UKTI website but also those from other similar agencies in other countries such as the US), to specific sector/product reports (Euromonitor International has some great webinars) and statistical and economic analysis (such as The World Bank databases) – it’s all out there, you just have to look.
There are also some free export programmes, webinars, seminars, roadshows and other events you can attend. If you want some bespoke research, certified international trade advisers are a good option if you have the funding available to use them. Or why not join forces with a local university or college and apply for some joint international research funding together?
As a micro business owner myself, I know what it takes getting on that plane, giving that presentation and waiting for that deal. Believe me, it can be done. I wish you all the best.
Gabriela Castro-Fontoura is director at Sunny Sky Solutions.