Tips How to Launch a Business in Latin America

There are plenty of good reasons why expanding your business to Latin America could be the best business decision you’ve made in a long time!

First of all, there’s the population. The area is home to 630 million people, who are often living in societies with huge social and income discrepancies. That’s a lot of potential clients, to put it mildly.

True, Latin America may seem disorganized, especially regarding urban building and paperwork, but it's investing market is rapidly growing. For example, start-up investments became four times bigger in the period of two years (from $500 million to $2 billion in 2018), according to research done by the official capital investment association.

Brazil, Mexico, and Chile are the countries with the largest investments. The year in front of us should bring growth to Guyana, Panama, and the Dominican Republic.

Therefore, investing in Latin America has great potential. Let’s see which steps should be taken before you enter the market.

Find your niche

Do your homework properly. Analyze the market, and check which niche would be most profitable for you. For instance, with the medical cannabis becoming legal in Brazil, a lot of foreign companies are looking forward to exporting their products, as the country doesn’t have satisfying local facilities.

Pick the country

The next logical step is choosing the best market for your investment. There are 33 countries altogether, each with its particular advantages and disadvantages, so study the local markets well.

Prepare the employees

Choose your best people to run the business. Even if they don’t excel at languages, it would be wise to start taking conversational Spanish classes at Preply, or Portuguese lessons perhaps. Make sure to check what the official language of the country is before you start with the lessons. Spanish is not spoken in Brazil!

Having a translator is in order, but conversational lessons are invaluable for the next step.

Establish rapports

You’ll be entering a completely new market and you are aware of the fact that there's a plethora of rules, written or implied, which are challenging for foreigners.

To this end, it would be wise to find someone who knows the ropes. Find a local partner to make your expansion easier, and remember they take great pride in relationships.

How do you do that?

Being friendly is of utmost importance here. Generally, people from this region are said to be very chatty and enjoy small talk and the process of getting to know their potential business partner. This task may seem tiring for some, but it is worth the effort.

What is more, you’ll be using the same approach in negotiating business deals with future clients.

Get ready for paperwork

Or should we say, loads of it. Sadly, the waiting period to obtain licenses and other documents can be extremely time-consuming. Remember once again you’re leaving your comfort zone/country and these countries are notorious for their bureaucracy.

Catchy name

To quickly become one of the main recognizable competitors, invest some time in coming up with a suitable, catchy name for your brand. Win the customers even before they purchase your product!

Make a business plan

And get ready for surprises.

If this is your first time entering a new market, chances for hiccups and delayed actions are high. As a result, it would be wise to have a fund on the side just in case things don’t go as planned (which they never do).

Get the prices in order

In case you’re thinking about doing business across the continent, you’ll have to adjust prices accordingly. They are going to vary across countries so as to provide maximum revenues. Analyze the local costs before you compel to anything.

Slow Motion

Lastly, get ready for the slow pace of life. Time is money, but in this region, you can count on a huge time difference in comparison to how the business is run in your headquarters.

The general rule of thumb says you should count in 25% of extra time for whatever it is you are planning to do. That’s just the way things are.

Final tips

Finally, don’t forget to inquire whether there are any special perks for foreign investors. Outsourcing is a great way for saving money, too. Get ready, complete the tasks, and you’re in for an exciting (ad)venture.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.