As an entrepreneur with years of experience working in Latin American countries, I have seen territories such as Mexico, Colombia, and Peru go through huge change. In the past decade or so, there have been waves of foreign direct investment and improvements to the countries’ infrastructures, and as a business owner, this presents unique opportunities.
Today, I want to share some of the investment lessons I have learned from my time in Latin America, and share advice with business owners considering making a splash in the market.
Act fast when you spot an opportunity
One question many business owners ask me is where to next for startups around the world. I have witnessed something of a revolution in Latin America over the past decade. There has been incredible growth both in terms of local talent launching businesses, but also small and medium-sized businesses from Western countries like the United States and in Europe choosing to expand into markets like Argentina, Brazil, Colombia, Mexico, and Peru. Ten or twenty years ago, most Western businesses would not have dreamed of opening in these markets, but we’re living in different times, and it’s important to embrace globalization if you want to succeed and grab a slice of the market to future-proof your organization.
If I could give business owners only one piece of advice if they’re considering investing in Latin America, I’d tell them to act fast. There are a finite number of opportunities available in all sectors, and if you’re too late to understand the benefits of international expansion, then you are likely going to enter into the market once your competitors are already dominating.
I have seen businesses go from $50,000 revenue turnover in the United States to becoming million-dollar businesses when they bring their products and services into Latin America - it’s all about understanding demand for your products and tapping into the local market when the time is right. If you wait too long, then these opportunities will pass, and there’ll never be another chance for you to be the first fintech banking provider or the first B2B recruitment or marketing agency in a LATAM market. You’ve got to act today to capture these opportunities.
It’s essential that you embrace local culture
If you’re coming from the West, then you’re naturally going to need to take some time to get to grips with Latin American culture. Not only is there a language barrier to get over - you should learn how to speak Spanish as soon as you can - but you need to change the way you approach virtually every aspect of your business life if you want to be taken seriously.
Latin American men tend to embrace their business associates with both arms and then offer a handshake, whereas women offer a gentler embrace with an air kiss. Simple things like this may seem obvious or trivial, but they make all the difference and allow you to fit in and show potential clients that you respect and appreciate their culture. If you’re too blasé, then they will likely be offended or won’t want to work with you, so it pays to put in the time to get to grips with all of the intricacies and differences and truly embrace Latin American culture.
Know when to hand over the responsibility to someone else
When you invest in Latin America, you’ll probably want to do everything you can on your own, as you won’t have many business contacts and won’t know who to turn to for help. But if you’ve got your finger in every pie, then you’re not going to perform at your best and your output will suffer as a result. Know when to hand over a task to someone else, whether it’s applying for a visa, incorporating your business or marketing your products - the chances are that there’s an expert just around the corner who can help. Networking is everything.
You must be a natural entrepreneur
I’ve spent a lot of time honing my Australian entrepreneurship skills but my attitude toward business certainly changed when I moved to Latin America. I’m now responsible for a team of professionals across 13 countries, and as such my management style has had to change to accommodate cultures, attitudes, personalities, and working styles. If you want to succeed in the country, then you too need to adopt a more flexible approach to doing business and accept that not every one of your employees is going to work in the exact way that you do.
You cannot expect to invest in Latin America and form a new business without at least some entrepreneurial experience - if you’ve yet to do so, then consider getting experience as a manager or a team leader in your home country. There are going to be times when you don’t want to go into work or when a team member isn’t performing as well as you had hoped - but those are the moments when your level-headedness and experience will see you through.
You’re going to make mistakes
Finally, it’s important to mention that you’re going to make mistakes along the way. Heck, if you don’t make mistakes when investing in a venture on the other side of the world, then you are probably doing something wrong. I have taken the attitude that I can learn from every mistake, no matter how big, and that challenges help me to become a better entrepreneur.
Having said that, there are some mistakes to avoid in business in Latin America. Not getting to know the local culture and language is one, and second is trying to ‘cut and paste’ your business venture from one country to another - every market needs a unique strategy. Next is not reacting to the market - you must be on the ball and really get to grips with what your customers want, or a competitor will come along and swallow up your hard work overnight.
There’s no denying that investing in Latin America can be hard work, but provided that you have the right attitude and you’re ready to put in the hours, you’ll be able to make a success of your new venture. I wish you the very best of luck and encourage you to get in touch with my team at the Biz Latin Hub if you need any assistance with your international expansion.