You are probably not surprised by these facts about the business run by Australian immigrants as the followings (reported by CGU Migrant Small Business Report on 22nd Jan 2018):
Is small business a long-term solution for immigrants?
Initially, it is cultural and language barriers make it harder for the first-generation immigrant to find employment through normal channels.
As you can imagine when immigrant competes with the Australian locals for work, it is rather difficult unless there is a shortage in a certain type of work like construction, elderly care… Often this type of work is low skilled and short term needs.
Nevertheless, if an immigrant does not come to Australia for humanity reason, this immigrant is very likely having some skills or education as over 75% of immigrants are skilled, some of them are highly skilled and educated.
Most immigrants bear a distinctive character such as an entrepreneur: hard-working, forward-thinking and risk-taking. So it is natural when Searching for a long-term solution, small business becomes a good route for the immigrant to establish themselves in Australia.
In CGU Migrant Small Business Report, it is evidenced that the longer you have been migrating into Australia, the better chance you will find the long-term solution that is doing small business.
That’s why the statistics show that first-generation immigrants twice as likely to own small business after being in Australia for 10 years.
Why immigrants often fail their business so quickly?
More than 60% of Australian small business were closed within three years. According to CGU Migrant Small Business Report. 65% of businesses operated by immigrants were closed down or forced to close down within their first two years. Why?
Immigrants are not an exception from business failure but fail by different courses.
Over years of serving Australian immigrants, we studied the ground of business failure is intrinsic to the character of immigrants.
- 70% of immigrant entrepreneurs do not have a wealth business experience back to their original country, but they are inspired by the possibility of financial success to run a small business.
- Many immigrants take on a business because it is the best opportunity to be employed. The difficulty in finding a job has always been a major issue for immigrants.
- Many immigrants only focus on taking opportunities rather than choose suitable businesses according to their level of skills and business knowledge. Sometimes they did not handle the opportunities well.
- Some immigrant business owners are unfamiliar with the local business labor market and lack of understanding of the regulatory environment. They often got themselves into trouble with the local or federal government, such as work safety or tax.
- A portion of immigrant business owners has difficulty in culture and language adaption. Some are affected by the hidden social code of Australia.
- Many immigrant businesses have difficulty in acquiring a loan and experiencing more financially fragility.
- Much immigrant business relies solely on family support and unaware of the business support from the local and federal government such as small business grants, women business projects.
- Many immigrant businesses have no-long term plan or exit plan for the business, which means when the owner is sick or unable to work, the business will be discontinued.
How to avoid business failure from the start?
Not surprisingly, lack of due diligence when buying or starting a business is the No. 1 reason for business failure by the immigrant.
When an immigrant is focusing on seizing the business opportunities, their enthusiasm and excitement override thoughtfulness and thorough check.
Ask those questions before taking on business
- What exactly you were getting yourself into with business?
- What strategy your business will employ when it comes to managing a business?
- Does the structure of business provide you any advantage in respect of tax and investment?
- What is the best way to negotiate a good term of contract when it comes to buy or sell your business?
- Did you consider the Tax and CRS planning for global tax issues?
- What are the appropriate visas for an immigrant to run business in Australia?
- What is the required license or approval for business operation?
The Ultimate e-Guide for Immigrant Business success
Much of the frustrations from the immigrants in business are not necessary and can be avoided.
If you are finding it difficult and time-consuming to understand and operate a business in Australia, The Ultimate e-Guide for Immigrant Business Success will provide you with the essential guidance.