8 Common Issues and Hurdles with Early Start-Up Business Development in Latin America
Harris Gomez Group has been helping companies enter the Latin American market for 15 years. Throughout the years, we have worked with hundreds of companies, from small to large, as they have tried to enter the Region, all with varying strategies. We like to say around our offices that we have seen the good, the bad, and the ugly.
We often run into companies that are interested in developing the different Latin American markets for their products/services. The problem is that many companies end up doing nothing because they either do not know where to start or the cost of entering the Region is prohibitive. This is especially true for small to medium size companies where resources (time, money, personal) are limited. It doesn’t need to be, there are cost effective solutions.
On the other hand, we have also seen companies spend an incredible amount of money but without ever achieving their goals. They often end up frustrated with the endeavour. Again, it doesn’t need to be like that with the right guidance and plan.
SOME VERY COMMON ISSUES AND HURDLES WITH EARLY START-UP BUSINESS DEVELOPMENT
- Not all countries in Latin America are the same and one must take into consideration and understand the cultural differences that may impact the business deployment process.
- BDM’s or Sales Managers from foreign companies are typically non-Spanish speaking executives so they fail to effectively engage with customers and understand why things are done in a certain way or more importantly identify what the customer issues are.
- BDM’s or Sales Managers from foreign companies typically have global responsibilities so their allocate time to a specific region is split between continents or countries making it very difficult to engage and effectively service the area, resellers and clients.
- Relationships and trust are an important aspect of doing business in Latin America and like any relationship it needs to be built over time and not by flying in once or twice a year or making one or two phones calls.
- A lot of the key discussions and relationships need to take place and be built at site level away from the corporate environment and this also requires significant amount of visits to demonstrate commitment and trust.
- Many companies will not deal with companies that don’t have local presence or an in-country company representative. There is growing concern that suppliers will not respond fast enough when issues arise creating uncertainty with the supplier.
- Many companies appoint resellers feeling this is the all they need to do. The reality is that resellers are like employees in many aspects. They need to be qualified, incentivised, trusted, empowered, supported and frequently managed to ensure they are focused and aligned with your own business objectives.
- Without clear goals, agreements and objectives (strategies) it is very hard to stay focused on seeking new business, securing and servicing opportunities in the LATAM Region.
We know from experience that companies often fail at gaining traction because of the costs and time associated with developing a new market. In order for a company to be successful they need to obtain sales. In order to secure those first sales, there are a lot of steps and factors that need to be accounted for which can be even more difficult for foreigners who don’t understand the language, business culture or have an established network.
That is why we have partnerships with companies such as AUSMINTEC and owner Ramiro Mesina. Ramiro grew up in Australia, comes from a Chilean background, and has a track record of helping foreign mining suppliers enter the LATAM market in their initial stages.
AUSMINTEC provides on-the-ground business development support that helps minimise the cost and risk of entering the Latin American Region while also minimising the time it takes for companies to achieve their first sales.
- You have access to a staged framework and controlled environment for evaluating the market and conducting business.
- You are seeking, working and managing local business partners appropriately.
- You are talking to key personnel and decision makers.
- You are identifying and enhancing the right opportunities.
- You are focusing on the right sales leads.
- You are developing your own relationships with local partners and end users.
- You are learning about the local market including what to do and what not to do.
- You are making informed decision and optimizing resources.
- You investing appropriately when and where it matters.
- You are creating an on-the ground-presence & growing your business.
There are a thousand ways to enter a new market. The one tip we always give companies is that they should not underestimate the power of having in – country support, especially in the early days. It does not need to be expensive but it will speed up the process and allow you to navigate around the many problems that tend to arise when doing business in the Region. The key is to find the right partner!
Harris Gomez Group is a Common Law and business advisory firm, with offices in Santiago, Bogotá, and Sydney. Over the last 15 years we have been supporting foreign companies with their growth in Latin America. Many of our clients are technology companies, service providers and engineering companies that focus on the mining, energy and infrastructure markets.
To better understand how we can support your management team in the Region, please contact Cody Mcfarlane at firstname.lastname@example.org