Dateline: Kuala Lumpur, Malaysia
Imagine three words being the difference between success and failure.
It was several years ago that I realized myself what those three words were. I had invested in a home services company that was teetering on the verge of insolvency. The company had a small base of loyal customers but had greatly shrunk in size as the owner got a divorce and stopped paying attention to it.
Two hires and a few days’ of marketing efforts later, the company was on its way to what turned out to be very rapid growth. Within a few months, I had to hire a general manager to keep what was supposed to be a low priority annuity for me humming along as a well-oiled business.
When I hired him, I told him the marketing strategy that had helped the company grow five-fold in a few months with very little interaction from me.
I took my phone out of my pocket and showed it to him. I explained that we did business in a very different way than almost any of our competitors. The reason, I explained, was that when a customer called, we “answer the phone”.
Looking back of my successful ventures in several different industries, I realized that just showing up was often the biggest part of the equation.
When I started and managed what turned into a relatively large consulting firm in the broadcast infomercial business, our firm was often brought on by independently owned radio stations who were one step away from turning out the lights.
Some of our clients back then told us they would have literally been out of business if we hadn’t worked with them. Each time my team went in a helped turn a station around, we did only one thing: get the station on the map. Make calls to people with money. And answer the phone.
The truth is, running a business doesn’t have to be difficult if you have something that people want. I am a firm believer that control of your economic situation means control of your freedom.
Over the last few weeks, I’ve had the privilege of being interviewed on several of the world’s top business podcasts and radio shows. From my interviews on Radical Personal Finance and Entrepreneur Next Door to my soon-to-air guest spot on John Lee Dumas’ #1 rated Entrepreneur on Fire, I’ve been asked one question over and over: “what is your most concise advice for making money?”
The answer is always simple: be available to do business. That’s at least half the battle.
If you’re reading this, you likely already know that you need to have your own income stream and savings, be it from a business, investments, or something else. Chances are, you already use one of those methods to live on your own terms.
However, in light of just how hard the United States and other western countries are trying to make it to leave their over-taxed and over-regulated borders for greener pastures, I wanted to share a few examples of how you, too, can apply my shockingly simple system for success.
Today, my system includes doing business in markets where it’s even easier to succeed thanks to fewer competitors and a system that is constantly catching up with itself.
Emerging and frontier markets have less complicated markets in many cases. Here in Southeast Asia, for instance, there are a number of Amazon-style companies that will deliver practically anything to your door for free.
I just bought a $250 juicer for under $100 using one of these sites, and I didn’t even have to walk to the mall. Because many Asians don’t yet have credit cards, the company accepts cash on delivery.
Yet the system has some flaws that could be improved on by an entrepreneur. And I have a growing number of friends who are using this same principle of improving upon a less than developed market to build successful businesses.
One guy who recently moved to the Philippines is training Filipinos to speak different European languages so he can market their services to businesses in expensive countries back home. Unlike the United States, countries like Norway and Denmark don’t outsource a lot of business process tasks, even though labor and social contributions there are crazy expensive.
While everyone and their brother has flocked to the Philippines (and now Vietnam and elsewhere) to set up BPO companies, very few people have marketed their services to anyone but English speakers.
Meanwhile, businesses like South Korea and Japan are feeling the squeeze with few options to lower their costs of doing business. The same is true in much of Europe. All my friend has to do is get his name out and “answer the phone” to get B2B business from companies that don’t have nearly as many options as their counterparts in the USSA.
Of course, there are an endless number of untapped possibilities in the local markets. Heck, even well-developed Kuala Lumpur has very few options for Mexican food. Chances are a first-world city that doesn’t have a Mexican restaurant is missing a lot of other high-demand products and services, as well.
While setting up shop overseas can be challenging at times, there are advantages that give you marginal benefits over doing business at home.
Because many emerging consumers don’t have credit cards, businesses often deal strictly in cash. I can’t tell you how many over-priced frozen yogurt stands I’ve passed throughout Asia and Europe that only take banknotes and tokens as payment.
The yogurt place at the Suria Mall at the base of the Petronas Towers charges more than any store I’ve ever seen in the US or Canada, but refuses to take the 3% hit by running my Visa card.
Being able to charge higher prices for novelty products and not have to pay for someone else’s free airline miles are a few of the smaller benefits opening a business here affords you. That will of course change as each market becomes more developed, but by that time you should be able to stake out your own share of the market; a share which will be rather valuable by that time.
And then there is the “offshore advantage”; the stuff we talk about here every day. While big businesses like Apple use Double Irish Dutch Sandwiches to lower their tax rates to near zero, small businesses that physically do business in one country are on the hook for whatever the local authorities demand.
Here in Malaysia, AirAsia is the phenomenal success story of an airline that went from insolvency to one of the largest in the world. The airline’s hub is at Kuala Lumpur Airport, but the company is based in Labuan, Southeast Asia’s little-known tax haven on eastern Malaysia.
By getting their taxes down to practically zero, AirAsia can offer super competitive fares and not only win a larger market share of existing business, but cater to people who have never been able to fly before.
When you can offer fares from Southeast Asia to Australia for $100 one-way, you’ve got to be doing something right.
On top of that, airlines in this part of the world aren’t going bankrupt every other day like US carriers. (Service is a hell of a lot better, too.) AirAsia has been profitable every year since inception in 2001 thanks to improving on formerly poor management in the airline industry, low wages in developing countries, and virtually no tax.
The hacks at United couldn’t pull any of that off.
It goes to show that coupling the power of growing consumer markets where people conduct sustainable spending with cash, not credit, with the power of zero taxation using an offshore company is very powerful.
If you don’t use the “overseas advantage”, not only will your profitability suffer as western economies stagnate, but you’ll miss out on some of the best opportunities in the world right now.
The principles of making money in these places are the same as anywhere. It just happens to be easier much of the time when you go where your capital is respected by the government and your product is desired by consumers.
In many cases, it’s even easier the than three words I used to build my own personal fortune back in The Land of the Free.