Startup Costs For International Business

By Akhil Shahani

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Building up a business from scratch needs great amount of patience apart from a good financial back up. Though every business has its own specific cash requirements throughout the various stages of development, most businesses go through almost similar set up costs.

  • Every business has its own nature of start up costs; it is wise to keep aside an additional expense account, for unforeseen expenditure especially in case of international business.

Some of the startup costs for international business of course will be one-time, for example the fee for incorporating your business and the expenditure of putting up a sign on your building. There are other expenses of course, which are a part of the ongoing process, such as the cost of utilities, inventory, insurance fees, etc.

  • An effective way of calculating your startup costs is to use a worksheet that lists all the various categories of costs, which are needed to be understood before starting your business.
  • Many entrepreneurs today prefer setting up business abroad keeping in mind the large profit margins. A general survey will tell us that prices in most parts of Europe and some of the south east Asian countries would be equally or at times even more expensive than in North America, while it is easier and less expensive to do your business in most countries around the rest of the world.
  • Expanding your business abroad, especially in some of the developing nations is a great idea.
  • The business opportunities are tremendous but the cost of setting it up is much less as compared to developed European nations.
  • One must of course counter local problems and politics and involve more of local administration in order to be successful.

The presence of a large number of unskilled labor, contributes to the low startup costs for international business. This is in fact one of the many reasons why these days there are so many multinational companies, which have opened up factories in developing countries like Indonesia, India and China. The cost of daily wages per laborer is incredibly low. Also production facilities are much cheaper than what it might have cost you for a local set up.

  • Even a posh locality in an underdeveloped country would be much cheaper than an average location nearer home.
  • Basic infrastructure development is easier and much cheaper as a result one can afford the best equipment and top grade man power for running operations.

An international business in some of these countries would mean saving on a lot of money in basic raw materials. This would be very important for you if you were thinking of manufacturing or importing the basic materials.

Cheap transportation is another reason why setting up your business abroad could mean better business sense from every angle. Apart from that, expenses incurred on day to day living and personal expenditure are much lower, resulting in overall growth in profit percentage.

  • Apart for the basic start up costs that are to be incurred in most international business one might have to keep aside funds for local rehabilitation and stabilizing of the local political factors.
  • Commuting from the base at home, might be costly an done could make a cut in such costs by incorporating more of locals for overall running of the business instead of a long distance management team.

A word of caution though, that though the overall cost of living in these countries may be lower than in the States, the possibility of hidden startup costs for international business could loom large on you.

Hi, I'm Akhil Shahani, a serial entrepreneur who wants to help you succeed. If you like to work smart, check out http://www.SmartEntrepreneur.net It's full of articles and resources to help you start and grow your business successfully. Please visit us & download our special "Freebie of The Month" at http://www.smartentrepreneur.net/freebie-of-the-month.html

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