You are probably not surprised by these facts (reported by CGU Migrant Small Business Report on 22nd Jan 2018):
Is small business a long-term solution for immigrants?
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.
Initially, it is cultural and language barriers make it harder for the first-generation immigrant to find employment through normal channels.
On the other hand, most immigrants inherit the distinctive character like an entrepreneur: hard-working, forward-thinking and risk-taking. Also, most of the immigrant who does not come to Australia on humanity reason, are highly skilled with education.
When Searching a long-term solution for the immigrant especially the first-generation immigrant, small business becomes a good route for the immigrant to establish themselves in a foreign country like Australia.
In CGU Migrant Small Business Report, it is evidenced that the longer you have been migrating into Australia, the larger the chance you will find the long-term solution that is doing small business.
That’s why first-generation immigrants twice as likely to own small business after being in Australia for 10 years.
Why immigrant failed 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 immigrant were closed down or forced to close down within their first two years.
Immigrants are not an exception to business failure but fail by different course. Over years of serving Australian immigrant, we understand 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.
- Much of Immigrant only focus on taking opportunity rather than choose suitable business according to their skills and business knowledge.
- Some immigrant business owners are unfamiliar with local business labour 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 loan and experiencing more financially fragility.
- Much immigrant business relies solely on family support and unaware the business support from local and federal government such as small business grant, woman business project.
- 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.
Have you ever asked those questions before taking on a 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 in immigrant 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 the essential guidance.