This document provides an overview of key considerations and steps for starting a business in a foreign country. It covers topics like developing business planning skills, choosing a legal structure, registering the business, and understanding the local market. The document emphasizes adapting to the new country's culture and business environment. For example, it notes that customer needs, effective marketing strategies, and the value of skills can differ between countries. Overall, the document aims to equip entrepreneurs with basic knowledge for starting a business abroad.

1. Starting up a business in a new
country
Example module for the partners

2. Are you familiar with other How to communicate in a
cultures? new culture?
(Cross-cultural skills) (Ccommunications skills)
How to develop my
How to build networks? entrepreneurial skills?
(Networking skills) (Entrepreneurial skills and
traits)
How to start up a business in How to expand your business
a foreign country? to a foreign country?

3. How to start up a business in a foreign
country?
This module gives you basic understanding about starting a business. The focus is on
aspects related setting up a business in a foreign country, but the information offered is
applicable also if you are planning to start a business in your home country.
The topics to be covered in this module include formalities of business start-up, market
information, business planning skills and funding. We also provide you some links to
additional information about the topics.
Business planning skills Formalities of Market information
business start-up
Learning materials, tips
Funding
and links

4. Business planning skills
Every business needs planning. No matter if it is a start-up or a long established
company. The goals and aims of a firm need to be set, the steps toward the goals need
to be planned, as well as the criteria for monitoring your success.
Core competency areas needed in business planning
1. goal setting
2. organizing, analyzing and gathering data
3. diagnosing problems and their causes
4. predicting and forecasting
5. communicating
6. evaluating and comparing courses of action
7. implementing and monitoring actions. (Dan J. Power of Planningskills.com)
A business plan is a document which helps you to manage your plans.

5. What is a business plan?
“A business plan is a document that
summarizes the operational and
financial objectives of a business
and contains the detailed plans and
budgets showing how the
objectives are to be realized.
Because the business plan contains
detailed financial projections,
forecasts about your business's
performance, and a marketing
plan, it's an incredibly useful tool
for business planning.
For anyone starting a business, it's
a vital first step.”
(by Susan Ward, About.com Guide)

6. What is a business plan? (cont.)
• There are different forms for different audiences
1. a written presentation for external stakeholders
2. an oral presentation
3. an "elevator pitch"
4. an internal operational plan
A written presentation for external stakeholders is most
commonly referred as a business plan.

7. Why do I need a business plan?
• By creating a business plan you’ll make
the your ideas more explicit which gives
you an opportunity to evaluate them
critically and change your plans when
needed.
• A good business plan is a living
document. It should be updated
regularly.
• It is a concise way to inform your
potential financers and investors about
who, what, when, where, how and why –
some financers and investors even
require a business plan.
• Thorough planning is even more essential
when starting in a foreign country!

8. ”Business plan made it easier to
communicate our business idea with other
people. It was very useful when searching for
the premises to rent and when applying for
public grants and financing.”
”My mentor was a great help for me. He
encouraged me in entrepreneurship and
helped me in further developing and testing
my business plan. It is important to have
some ”outsider” to comment your business
plan.”

9. What should I write into a business plan?
• The plan should define specific business objectives and goals with general
parameters to guide the organization
• What should it include?
• basic information of the business (ownership, business form etc.),
• business idea,
• business environment,
• goals and strategies,
• marketing plan,
• product development plan,
• production and logistics,
• organisational and personnel plan,
• financial plan,
• risk analysis.
Remember: Business plan should be simple, specific, realistic and complete.

10. What should I focus on when
planning a business in a new country?
• The customer behaviour and needs may vary from country to country:
”We came from Persia and started an ethnic retail shop in Finland just before Christmas time. We ordered lots of figs for the season, which
all went bad. We just did not know that it was not a custom in our new home country to eat figs during Christmas time. Now we know better,
and order many kinds of special nuts for the holiday seasons. And they sell very well.”
• A marketing strategy that is efficient in one country may be inefficient in another:
”The Finns seem to be obsessed with the Internet! Being visible in the social media has helped our grocery in many ways.”
• Not only social environment (habits and valuations) differ, but also the physical environment – and it
affects the business as well:
”After moving to Finland I soon realised that the high season for selling garden furniture is quite short. Between August and April hardly
anyone will buy garden stuff. The gardens will be mostly frozen that time. Coming from South-East Asia this was something new. ”
• The value of skills and competences is always in relation to the environment you are in. Matching
your skills and competences to the needs of the new environment might be a key to success.
Eg. ability to speak fluent Spanish in Spain, may not be much of a skill, but in some other country it is an asset that gives you competitive
advantage, when starting a business dealing with Spanish speaking countries or enables you to work as a freelance Spanish teacher.

11. Why not start today? It’s fun.
It is not hard!
You can also get help if you need (see the links below)
Free business plan templates and more info on using the
business plans:
• Bplans.co.uk, Free Sample Business Plans and UK Business Plan Software
http://goo.gl/jF84v
• Bplans.com, What makes a good plan, Business Planning Basics, http://goo.gl/KMXzl
• Bplans.com, Business Plan Outline and Instructions: http://goo.gl/7QIMB
• US Small Business Administration at http://goo.gl/34qge
• About.com, Small Business Information, at http://goo.gl/3xQsc
• VA-Interactive, Developing a Business Plan http://goo.gl/2XOA1

12. Legal forms of business
After you have decided to start a business one of the important issues is the form of
business entity that will serve as the vehicle in pursuing the business.
There are many legal forms of business available for you as a business owner.
• Choosing the form of business that best meets
your needs may:
• Protect you from unnecessary risks
• Help you to minimise your taxation liability
• Save you time and reduce paperwork
• Help you to avoid government regulation and
unnecessary bureaucracy

13. Legal forms of business
• The following three forms are the most common
ones for a start-up entrepreneur:
– Sole proprietorship/sole trader
– Partnership
– Limited liability company (LLC)
• It should be noted that
– the regulations governing particular forms of business
may differ a lot between countries.
– there might be also other kinds of business forms
available, depending on a country.
• You should always check the country-specific
information. European Commission’s web portal
Your Europe, your opportunity - Practical guide
to doing business in Europe provides country-
specific information and links to Points of Single
Contact in each EU country.

14. How do I choose the legal form of business?
• Choosing the right form of business is important because it will determine for example how your business
is organised, and how your business is taxed.
• It is good to know that your initial choice of a business form doesn't have to be permanent.
• It might be advisable consult business professionals when choosing the form of business.
• There are no fixed rules determining which is the most suitable form of business. The most suitable and
appropriate form of business depends on the individual circumstances of each business owner.
Considering the following issues might help you to choose the most appropriate form of business for
yourself:
– Number of founders
• If you start your business alone, you can choose between sole proprietorship or limited liability company. If you
have one or more partners then you have more alternatives.
• You can think about your working habits: Do you prefer to do things alone?
– Required capital
• The amount of capital needed for the business depends on the type and scope of the activities. Usually sole
proprietorship requires little capital whereas in a limited liability company a monetary investment is required.
• If you aim at having a large number of investors, a limited liability company is the most suitable.
– Division of responsibilities
• A sole trader is responsible for any liabilities of the business with his/her personal property. The partners in a
partnership have a similar personal responsibility. The responsibility of shareholder in a limited liability
company is limited to the capital they have invested in the company.
(Enterprise Finland. Different forms of business. http://goo.gl/VXcYB)

15. How do I choose the legal form of business?
(cont.)
• Flexibility of operations
– A sole trader makes all decisions alone and is responsible for the activities with his/her personal property. The
partners in partnership make decisions either solely or jointly. Limited liability companies are usually represented by
their Boards of Directors.
– Limited liability company requires more statutory paperwork to take care of than the other forms of business.
• Continuity of existence
– A sole trader’s business operations are the most vulnerable on the death of the entrepreneur. In a partnership the
share of the partner may usually be transferred to another person with the agreement of the other partners. In a
limited liability company changes in the shareholders do not affect the existence of the company.
• Profit distribution and loss coverage
– A private entrepreneur retains any profits himself/herself, but is also responsible for the losses incurred by the
business.
– In partnerships profits and losses are distributed among the partners, but there are some variations between the
specific types of partnerships.
– A limited liability company pays its shareholders a dividend. Only the profit of the previous accounting period and
unrestricted shareholder's equity may be used for dividends. A shareholder's losses will only amount to the
investment.
• Taxation
– Tax treatment varies depending on the form of business. Also each country has their own laws and regulations that
need to be followed.
– When determining the tax burdens falling on different forms of business, attention must also be paid to the tax
burden of the entrepreneur. The joint effect determines which form of business is the most profitable in terms of
taxation.
(Enterprise Finland. Different forms of business. http://goo.gl/VXcYB)

16. Sole proprietorship / sole trader
A sole proprietorship is a business owned by one person.
As a sole trader you may operate the business alone or may employ others.
• An easy way to start to • You are personally liable
 Cons
+ Pros
run a business for the debts incurred
by the business
• Usually does not require
lots of capital • There’s no job security
when you work for
• You have control over yourself
your work: what you do,
how much you work, • Might be lonely
when you work
• Irreregular income – it
• Keeping records and might take a while
accounts is fairly simple when you start earning
• You can keep all profits
you make!
(Business Link: Business Structures, http://goo.gl/t1djE)

17. Limited liability company (LLC)
A limited liability company is a flexible form of enterprise that blends elements of
partnership and corporate structures. It is owned by its shareholders, but has a
separate legal entity from its owners.
• It allows you to separate • There are more
 Cons
+ Pros
business and personal paperwork and
affairs accounting
• It protects you from requirements for LLC
personal bankruptcy – than for a sole trader
you are not responsible • It might require some
for the debts of the starting capital
business
• It might be considered • There are more rules
more credible business governing the activities
of limited companies
• It allows more flexibility than there are for sole
in arrangements traders and
between its shareholders partnerships
and directors
(Business Link: Business Structures, http://goo.gl/t1djE)

18. Partnership
A partnership is a business owned by two or more people who agree to share in the profits or
losses of a business. The three typical classifications of for-profit partnerships are general
partnerships, limited partnerships, and limited liability partnerships.
• It is easy to set up • You need to share the
 Cons
+ Pros
profits between partners
• Does not require high
investments • Each partner usually has
unlimited responsibility
Pros
• You can yonnn business
share the of liabilities
responsibilities, costs and the
workload with your partner • You do not have total
control over the business
• You and your partner can
support and motivate each • You need to make
other compromises
• You do not have to know
everything by yourself – you
can compliment each other’s
skills with your partner
(Schaefer: Is a Business Partnership The Right Choice for You? http://goo.gl/B4YLc; Business Link: Business
Structures, http://goo.gl/t1djE)

19. How do I register my business?
Administrative procedures related to business start-up
• The business registration procedures vary between countries
• There might also be different registration procedures for each form of businesses
• Typically, as a new business owner you need to register your business to the authorities
• Also you need to take care of social security registration and tax registration
• In some countries it is also mandatory for a business owner to insure himself against
retirement, unemployment and death
Each EU member state has set up “Points of Single Contact (PSC)” that are
e-government portals helping businesses complete their administrative procedures on-line.
You can use the "points of single contact":
• to get detailed information about doing business abroad or in your own country
• to complete administrative formalities concerning the establishment of a business or
the cross-border provision of services.
Points of Single Contact – Easy completion of formalities for service providers:
http://ec.europa.eu/internal_market/eu-go/index_en.htm
(European Commission. Your Europe – Start-ups. http://goo.gl/Dl6vo)

20. Market information
Knowing your target market is extremely important for all
businesses. Get a business idea
But when you are starting a business in a country other than
your origin, the knowledge about the markets becomes even
more important.
No matter how good your product or service is, in order to sell it
you'll have to convince people they want or need it. Learn the needs of your
customers
This means you have to first find out what it is your customers
actually want or need. Then you need to know your competitors
in order to compete in the marketplace. No matter what you're
selling, the chances are your customers are already buying
something similar from someone else.
Find out who the
competitors are and
Once you know your customers' needs, you can align your
product or service to meet them and get those sales. Use this what they do
knowledge to differentiate your service or product from the ones
offered by the competitors. Making customers aware of how
your business is better is how you'll convince them to buy from
you.
Rework on your business
This section provides you information on the essentials of idea to offer something
markets: what do you need to know and how and where you can special to your customers
find the information?

21. Market information
• When you start a business you need to be aware of your
markets:
– In what kind of markets are you planning to operate?
– What is your target market?
– What are the needs of your target market?
– Is there lots of competition in the market? Who are the competitors?
What are they doing?
– What are the market trends?

22. Where do I find information on markets?
• There are many sources of information you can exploit for
identifying potential markets:
– Reports and articles: business magazines and the business section of
the newspaper provides information on the economy and the effect
it’s having on different types of businesses or markets.
– National statistical offices can give you an idea what’s happening in
the economy, population and trends
– Trade associations for your industry can offer industry-specific
information
– Local authorities and Chambers of Commerce can provide local
information
– Market reports can be found free of charge from the web, also market
research companies sell them online
– Market research is an excellent way to gather various kinds of
information

23. How do I conduct a market research?
• Some basic market research is usually essential in
order to be able to develop and provide high-quality
service or product to the customers
• If you have money, you can hire a marketing research
company to do the resreach for you
• Alternatively, you can do the market research by
yourself
• TO BE CONTINUED

24. Do I need some funding for my business?
Starting a business requires funds. There are many things that you’ll need to
purchase – office equipments, means of production, stock, etc. You’ll need to
ensure your own living during the first months, too.
How much funds are needed depends on the type of business you are starting,
too. The cost are much lower when starting up a consulting firm or a hot-dog
stand than when starting a high-tech factory or a leisure centre.
But even if we are talking about different amounts of money, the fact is that
some money will be needed. Most business-owners tend to underestimate the
amount of money needed for start-up. Read more about estimating realistic
start up costs at http://goo.gl/cy0T4.
Where can you get funds? Your own savings perhaps? Your family and friends?
Bank loan? Public grants? Privat investments?
How to get them?

25. Where can I get funding?
• Own savings
+ You will be independent and don’t need to worry about
instalments of loans
- The amount of money is often quite limited; your business idea
will not be tested by ”outsiders”
• Family and friends
+ Family and friends can be trusted; owing them motivates you to
work even harder for your business
- If the financial situation of the firm gets bad, there is a risk of
disagreements, which can harm the family or the friendship
• Subsidies
+ Free money that you don’t have to pay back
- The amount of money is often quite small; the procedures
involve reporting and other red tape
• Bank loans
+ You don’ t loose your command on the business
- The money is on a market price, many times you’ll need a solid
security

26. Where can I get funding (cont.)?
• Public guarantee schemes and public
loans
+ reduces your need for solid security
- ??
• Angel investors
+ looking for high growth and high return, more
likely to invest smaller amounts than venture
capitalists; also with lesser ownership
- you will loose some right of disposal in your
company
• Venture capital
+ ready to invest large sums of money, usually in
high-growth and high-tech industries, willing to
invest in start-ups
- you will most likely loose more than 50% of your
ownership

27. When starting a business in a new country,
how do I know where to look for help in financing?
Raising funds in a new country without networks and connections is a little bit harder than
at your country of origin.
Every European country has its own public funding system as well as business support
system, which you should find out before starting a business.
Country-spesific information and links to locan support organisations can be found at Your
Europe Portal: http://goo.gl/K599
• Other helpfull places to start are:
 European Small Business Portal, Obtaining funding http://goo.gl/E4es9
What is it? European Small Business Portal gathers together all the information provided by the EU on and for SMEs, ranging from practical advice to
policy issues, from local contact points to networking links.
 Enterprise Europe Network: http://goo.gl/qh31R
What is it? The Enterprise Europe Network brings together business support organisations from across 49 countries. They are connected through powerful databases and
know Europe inside out. With more than 580 member organisations they are always close to where your business is based.
 European Commission, Enterprise and Industry, More risk capital http://goo.gl/hnKV5
What is it? EU policy highlights overview with useful definitions and links.
 EBAN (European Business Angel Network): http://goo.gl/xhsFR
What is it? EBAN is a representative of business angels, business angel networks, seed funds and other early stage investment
professionals across Europe.

28. ”We sold our land back home in Greece
before moving to the UK. So, we had little
money to invest. And when we faced
difficulties in finding jobs, we decided to
start up a business of our own. ”
”We got a start up loan as well as a start up
grant when we started. The local start up
agency helped us a lot and explained us all
where we could get financing. A well written
and specific business plan helped us to ’sell’
our business idea to the financers. ”

29. How can I plan my needs of financing?
You’ll need to sit down with a calculator and spend some time in planning your future.
Don’t get scared, it is not as hard as you think.
If you need help, look for an accountant at your area. Especially, when operating in a
new and foreign country a local accountant is priceless. There are numerous
practicalities and regulations that you must be aware of when running your business
and in a new society it is not always easy.
Three essential parts of financial planning:
1. income statement
2. balance sheet
3. cash-flow statement

30. What is an income statement?
• Income statement is a company's financial statement that indicates how
the revenue (money received from the sale of products and services
before expenses are taken out, also known as the "top line") is
transformed into the net income (the result after all revenues and
expenses have been accounted for, also known as Net Profit or the
"bottom line"). It displays the revenues recognized for a specific period,
and the cost and expenses charged against these revenues, including
write-offs (e.g., depreciation and amortization of various assets) and taxes.
The purpose of the income statement is to show managers and investors
whether the company made or lost money during the period being
reported. (en.Wikipedia.org.)
 templates for income statement: Microsoft Office templates
http://goo.gl/4nMTW, SME Toolkit http://goo.gl/vyG9f , Vertex42
http://goo.gl/Mqqhh and with search engines you’ll find many more –
even on your own language!

31. What is a balance sheet?
• Balance sheet is a summary of the financial balances of a sole proprietorship, a
business partnership or a company. Assets, liabilities and ownership equity are
listed as of a specific date, such as the end of its financial year. A balance sheet is
often described as a "snapshot of a company's financial condition". Of the four
basic financial statements, the balance sheet is the only statement which applies
to a single point in time of a business' calendar year.
A standard company balance sheet has three parts: assets, liabilities and
ownership equity. The main categories of assets are usually listed first, and
typically in order of liquidity. Assets are followed by the liabilities. The difference
between the assets and the liabilities is known as equity or the net assets or the
net worth or capital of the company and according to the accounting equation, net
worth must equal assets minus liabilities. (en.Wikipedia.org.)
 templates for balance sheet: Microsoft Office templates http://goo.gl/SOjLi, SME
Toolkit http://goo.gl/FdPNM, Vertex42 http://goo.gl/KKwsq and with search
engines you’ll find many more – even on your own language!

32. What is a cash-flow statement?
• Cash-flow statement is a financial statement that shows how changes in
balance sheet accounts and income affect cash and cash equivalents, and
breaks the analysis down to operating, investing, and financing activities.
Essentially, the cash flow statement is concerned with the flow of cash in and
cash out of the business. The statement captures both the current operating
results and the accompanying changes in the balance sheet. As an analytical
tool, the statement of cash flows is useful in determining the short-term
viability of a company, particularly its ability to pay bills. (en.Wikipedia.org.)
 templates for cash-flow statement: Microsoft Office templates
http://goo.gl/fkL3c, Small Business Arena http://goo.gl/0yFh0, Vertex42
http://goo.gl/Z45jq and with search engines you’ll find many more – even on
your own language!

33. Is it ok, if I think of the financing
only when starting up my business?
Plan
Evaluate Execute
Monitor
• Financial planning and the financial resources are tools – not
goals themselves.
• Financial plans are living documents which you should update
on a regular basis. Plan also for the future. Big investments and
their financing need to be planned well ahead.

34. Learning materials, tips and links
• Financing for for-profits: http://managementhelp.org/businessfinancing/index.htm#anchor800883
• Financing tips http://entrepreneurs.about.com/od/financing/Financing_Funding.htm
• Financing options for start-ups http://www.startupnation.com/business-
articles/890/1/AT_FindingFundingThatsRight.asp
• How to raise money for your business?
http://www.entrepreneur.com/howto/raisemoney/index.html
• Practical guide for doing business: http://ec.europa.eu/youreurope/business/index_en.htm
• www.entrepreneur.com/  A valuable resource for entrepreneurs and those who think about
becoming one.
• www.entrepreneurship.org - Resource center for entrepreneurs, lots of blogs etc.
• http://hbr.org/  Harvard business review, lots of blogs etc.
• www.sba.gov/  U.S. Small Business Administration (business plan templates, information on
starting a business and managing a business, help on various issues)
• http://ecorner.stanford.edu/  Stanford University’s entrepreneurship corner, lots of knowledge
and inspiration
• www.bplans.com/  Business Planning Central, advice in writing business plans, how-to-articles
etc.

35. Learning materials, tips and links
• Points of Single Contact – Easy completion of formalities for service providers: http://goo.gl/a1X9
• Business Knowhow, Starting a business: http://www.businessknowhow.com/startup/
• Open a European Company. The European Company Formation Experts:
http://www.openaeuropeancompany.com/
• Startups. Build a better business: http://www.startups.co.uk/
• Startupnation. Everything you need to build a business: http://www.startupnation.com/
• Tips and tools for conducting market research: http://www.inc.com/guides/biz_online/online-market-
research.html
• How to conduct market research: http://managementhelp.org/marketing/market-research.htm
• 21 market research tips http://www.sitepoint.com/market-research-tips/
• Survey monkey -tool: http://fi.surveymonkey.com/