5 Hurdles to Overcome as an Expat Entrepreneur

Arriving in the UK at the age of 13, Surinder Arora had no English and was far away from his native Punjab. To pay his way through school his mother had a day job in a factory and a night job cleaning offices in West London. At 18, he became a junior clerk for British Airways — his first entry into the tourism industry. Today, with a staff of over 2,000 and 16 hotels up and down the country, he is one of the UK’s most successful hoteliers. Arora Hotels is believed to make him worth £225 million. Although on the high end of migrant entrepreneurs fortune-wise, he is a perfect example of one of the country’s half a million migrant entrepreneurs.

A report released by the Centre for Entrepreneurs, a London-based think tank, found that 14% of start-up businesses in the UK were founded by emigrant entrepreneurs. 18% of The Formations Company’s customers started limited companies as expat entrepreneurs. Expats have established over 450,000 businesses which currently employ 1.16 million, and they tend to be eight years younger than their UK-born counterparts. Further, according to The Economist, 40% of the founders of Fortune 500 companies are immigrants and their children. Despite some negative stereotyping in media and political discourse, expats remain upbeat and entrepreneurial, looking for possibilities in one of the most dynamic economies in the world.

The UK has a rich history of migrant entrepreneurship: Italian food makers, Irish construction companies, merchants and trader families from the old Silk Route, which stretched from northern India to Turkey. The top ten nationalities also include Germans, Americans, Chinese, Polish, Pakistani, and Nigerians and are not just related to food, consumer goods and construction, but also manufacturing, IT, management consultancy and media. So the landscape is diverse but what challenges are they likely to face when setting up a business in the UK? And what are the best steps to not only overcome difficulties but to thrive here?

Visa Challenges

For those who live outside of the EU, visa issues will likely present the first challenge. The Tier 1 Entrepreneur Visa has been established for migrants who have either set up or taken over a British business or for those who plan to invest £200,000 or more. Individuals can make an application both within and outside the United Kingdom and up to two business partners may apply. A further incentive has been created to allow entrepreneurs who have created 10 or more jobs or who own companies with revenues of £5 million or more to fast track naturalization with a later option to become a UK citizen.

#MigrationMadeEasy is a campaign we recently uncovered, heralded by Migreat, featured in WiredUK’s Startup of the Week. Migreat is a portal — developed by a company called Sharehoods. They aim to make labour force migration easier by simplifying visa bureaucracy with user-friendly interface and navigation for immigration rules.

Financial Barriers

Financial barriers are often cited as one of the most common barriers to migrant entrepreneurship not just in the UK but across Europe and North America. The trouble of not having a credit history can present an insurmountable challenge to new arrivals. Migrants are often forced to look at informal sources of financing (such as friends and family); or end up working with undercapitalized businesses which never reach their potential.

A lack of awareness or willingness to go for grants and other sources of private funding can also hinder the process. The government offers grants, loans, and other forms of funding for small and medium-sized businesses and start-ups.

In the private sphere, Shell’s Livewire program, for example, offers start-up awards between £1,000 and £10,000 funding to young entrepreneurs in the UK. The Prince’s Trust also has an enterprise programme for entrepreneurs between 18 and 30. Take advantage of the various incubators offered in different cities and research the options available in your line of business.

Damian Baetens is my mentor. He rocks.

Mentoring Support

Mentoring can benefit businesses of all shapes and sizes. It is an excellent way to walk the path of others’ successes and bring out innate talents and skillsets. There are 27,000 mentors to support small businesses in the UK today.

A company that has caught our attention recently is Transmit Startups. They provide start-up loans that can help expat entrepreneurs get their businesses up and running as long as they are based in England or Scotland, aged 18 or over, and are starting a brand new business or within the first 12 months of trading. Beyond the finance element, they provide guidance and support through the early stages of a new venture from their team of experienced business mentors, their expertise is suited for every discipline from creative entrepreneurship to a myriad of other businesses.

Language and Cultural Understanding

One of the most attractive aspects of starting a business in the UK is the size of the market — a domestic population of 60 million plus an additional 500 million EU citizens. Enriched language skills and a deep understanding of culture will always spur diversification of migrant businesses. If English is your second language, then consider business English classes, which are offered across the country.

If your English is already up to scratch, think about business diversification. Targeting customers from native country communities may give migrant business owners an edge when starting, but in order to develop it is necessary to look past traditional customer groups. Think of slight adaptation of your products or services, or simply opening a branch in a new area. The key here, as always, is market research but expansion is possible with some creative thinking.

Lack of Access to Information

Finally one of the key challenges that the Centre for Entrepreneurs identifies for expat entrepreneurs is lack of access to information. Would-be migrant business owners may sometimes lack experience in market research, business plan writing and basic skills including bookkeeping, marketing, legal obligations and HR.

The UKTI Global Entrepreneur Program helps overseas entrepreneurs and early stage startups to relocate their business to the UK, aiding with business plans and providing introductions to investors.

Likewise formation packages can be a crucial investment for a new company particularly for those who are less familiar with UK regulatory obligations. The Formations Company offers different options for entrepreneurs, which allow quick incorporation.

As with every entrepreneurial journey, getting yourself versed in Startups 101 how-to-guides and ‘Best Practice’ may be key to success. There are also various events such as Global Entrepreneurship Week, Webinars, Digital Meetups and Popup University classes by City Unrulyversity.

This article is a version of an earlier article I wrote for The Formations Company.

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