Starting a business in China.
Hmmm. Can a foreigner even do that?
The vast majority of people that do this do so with a Chinese business partner. I went down a different route and formed a partnership with a British company that has been active in China for over ten years.
Oh okay. Thanks, Andy.
Andy Navias is an Englishmen I met when living in China five years ago.
He’s still there and has gone from English teacher to starting his own English-education consultancy. In last week’s article, we covered the basics about Andy’s move to China: the reasons why, the local culture, etc. Today, we home in on the business side of things. In the wrap-up of this two-part series, Andy shares a list of the good and the difficult of doing business in China.
Andy in China Part 2: Doing Business
Let’s start with the difficult.
1) There is a hell of a lot of paperwork. In Britain (and USA I think) you can fill out a few forms online, pay a tiny fee, and you are all set up and legal. For us it was like a six month slog, and we needed a hell of a lot of evidence that it was a real business. This was very costly.
1a) EVERYTHING takes longer than you’d imagine. There is a famous saying when doing business in China, “Until everything is sorted, nothing is sorted.” Crazy example for you: last June I had a successful demo class and meeting with a 5-star hotel. This was our dream client as it would give us massive credibility. Next month we will finally start their consultations. Nearly a year!
2) Marketing is tough. We were originally targeting factories (to teach their marketing people how to win customers and keep them happy). Getting through to the decision-maker was incredibly difficult. He was very rarely in the office. I have business-to-business sales experience in England, so I know all the tricks of getting past the gatekeeper (receptionist). But it’s much more difficult here.
2a) Relationships are everything. This is well known in China, and it has proven to be true. We’ve spent a lot of time and money on cold calling, but most of our business has come through our team’s friends of friends, etc.
2b) Brand recognition is essential. The fact that most people don’t know us has made things really difficult.
3) Less emphasis on quality. Our services are priced above average because we hire the best teachers and spend a lot of time preparing. I absolutely believe that although we aren’t the cheapest, we offer good value for money because the students learn faster and more effectively. The one thing wealthy people don’t need to waste is time, but getting that message across is tricky.
4) Finding good Chinese staff is really tough. The truth is the education here has not improved as much as the economy. How could it have? The result is that finding good people for entry level positions is tricky. We lost a key member of staff (at the time our only salesperson) during summer 2014, and I honestly couldn’t believe the caliber of people I was interviewing. Literally people that wouldn’t even visit your website before coming for an interview and starting off the conversation with salary demands. We ended up just not replacing her until Chinese New Year.
4a) Family ties. I’ve also lost two members of staff because their families have opened businesses, and the staff were pressured into going to help them. I am close to my family, but no way would any of them ask me to quit my job for them.
Those are the challenges. But in my opinion, they are easily outweighed by the positives.
1) Opportunities everywhere. I’m the head of an educational group comprising four companies. I’ve launched an online school, a business consultancy, a children’s tuition service, and an English-learning app. There’s not a cat in hell’s chance that I’d have done that in England. I know a lot of really successful people out here that would not be doing anywhere near as well in the West, in my opinion. I don’t know if you met Sean Moran, Irish fella who owned a small school. It isn’t so small any more. He’s got branches everywhere, and is absolutely killing it. (By the way, he recently told me how much he lost in the first two years, and the figures were frightening!)
2) Staff work hard. The nature of running a new startup is that new things come up all the time, and they are often urgent. If I call my staff late at night or I need them to come in during the weekend, etc., they really will try to help.
3) Emphasis on anything international. Most Chinese people and businesses know that their best future is an international one, and they aren’t currently geared up for this in terms of their English language skills or cultural understanding. Therefore, they are really keen on international companies like ours.
4) Foreign staff. The emphasis on international goes both ways.
We offer work experience to Western students and recent grads. Interns are a huge part of our business and we wouldn’t have been able to attract as many good people if we were in England. So many people want to come and experience China.
We have a wide range of roles from international marketing to syllabus development and graphic design. They would suit somebody that has either just graduated and wants some hands-on experience, or somebody that needs to complete a work placement as part of their studies.
For work possibilities or any other questions, people are welcome to email me for more information at firstname.lastname@example.org.
And If you’d like to share your story on The Periphery, please email me at email@example.com. We’d love to hear all about your adventure.