In part 2 of our fourth episode, we revisit Kreston's Latin American business arm with Cesar and Francisco to share some words of wisdom, and get some great insight into how to be successful when expanding into Brazil and other Latin American territories. New guests next week!
Link to the full Kreston Global report can be found here: https://bit.ly/3RAdWhV
Written, hosted, edited & produced by Infinite Global: https://infiniteglobal.com/
Kreston Ep 4 Part 2
Hannah Robinson: [00:00:00] Hello. And welcome to Kreston Global's, the International Intepreneur Podcast.
Welcome back again for episode four, part two. I'm here again with Cesar and Francisco. Uh, welcome back to discussing Greater Depth Kreston Global's Business Culture Research, the Intepreneurial mindset, key report takeaways, and how the business landscape has evolved over the years since they've both been in business.
If you've just joined us as a new listener, I'd recommend going back and listening to last week's part one. To fully appreciate the [00:01:00] context, though I can guarantee you'll still get some great tips and insights from our Intepreneurs If you want to stick with this one for now. As we've mentioned before in previous episodes, A big part of Kreston's research and subsequent report has been around this idea of an Intepreneur, uh, coined phrasing for international Intepreneur, and it would be great to hear what you all take the mindset of a successful Intepreneur to be.
What is it that gives them the confidence to take that leap of faith and, and expand into territories?
Francisco Bracamonte: Um, let me, let me start. Uh, a lot of characteristics of business people or Intepreneurs, for example, one is being very optimistic now. They believe that the world is abundant and there are a lot of opportunities of doing businesses.
Um, if you are negative, obviously you are not going to take the risk. Of, uh, that are needed to make, to do a business. So I think it's the first characteristic. Other is that they [00:02:00] are very innovative. They want to innovate and to create different things and to, to see what are the market needs and to cover these needs in a different way.
Uh, other point is that you need to have still nerves. You need to be very balanced emotionally. Emotionally balanced. Uh, uh, taking risks sometimes is hard. You, you, you, you are human and you have, uh, emotions and, and sometimes, uh, you cannot sleep obviously if you are very concerned. So these Intepreneurs are, uh, in general, I think, uh, strong emotional, uh, managers, and these are three characteristics that I think are very common in business.
Cesar Ramos: For me, um, nowadays we have this, uh, diversity of the, the world. So the Intepreneur, I think they have to improve his skill of looking for this kind of, uh, uh, [00:03:00] current needs to be, uh, diversity and also, uh, to be persistent, innovative. And of course, any Intepreneur, they have to, they must have those. Also, most of the time they don't have a kind of a, let's say, management skill.
So I think they need to, uh, to invest some time to, to know how to run the business. Cause sometimes they are all Intepreneur, they have a good view for the future, but they don't have this kind of, uh, at least a small knowledge of, uh, um, uh, management skills. So I, I, in my opinion, they, we. Any Intepreneur should have those skills.
Well, that's my my comments regard, the mindset of the Intepreneur,
Hannah Robinson: and given the wealth of experience you both have, it would be really interesting to know how the Intepreneur landscape has [00:04:00] evolved since you entered the workplace. Has technology been the biggest influencing factor, or is there anything else that's changed dramatically over
Francisco Bracamonte: the years?
If you want, I can. I can start. I started almost 30 years ago. Obviously the business environment was really different because a lot of things, but because of technology, for example, now it's really easy to have contact with the everybody in all the work. In the past, it was really hard. When I started, we didn't have even the.
So imagine the complication of working in that environment and Latin America and particularly Mexico have a foreign investment mainly in companies extracting raw material like, like a minor, for example. Now Mexico had at that time a free trade agreement with United States, so we started having a lot of companies of manufacturing, automotive industry, and a lot of service industry.
So [00:05:00] they demanded a. Of work from the big firm firms, but also from medium sized, uh, firms like, like us. And it was a very good opportunity of starting, but we need to adapt a lot of of things now as we talk. In the past, probably the main barrier, not was not necessarily technology, but the culture to understand how the American people think.
For example, for me at the beginning was, was different. We were, we were born here in, in this kind of culture. So the first time that you start dealing with people, uh, you, you, you feel the barriers of. Cultural change. What, what? Uh, but you need to adapt. If you want to do business, you need to adapt. And obviously we are, the three of us are not too young, so we need to adapt to technology and, uh, it is a challenge.
No, it's a incredible, wonderful, having this kind of technology. This is an example. We are in four different countries speaking that like if we were [00:06:00] here together, In, in my place now. So I think it's easier to do businesses in, in this environment. I think that lot of people are familiar with this kind of, of, of international, with, with international businesses.
The communication and the. Cultural, cultural differences in the past. For example, if you hear my English, probably you don't understand half of the things that I'm, uh, uh, saying, but now probably you and a lot of international people are familiar with different as essence of, of English and other languages.
So a lot of changes in these, uh, three decades that I'm in.
Cesar Ramos: Exactly, Francisco, uh, I totally agree with you again. And, um, I think like, um, what I see, uh, I mean almost 25 years working in this area. So in the past when we hired someone, your office, uh, the idea was the, the employee, they are going to [00:07:00] stay forever.
They're going to work until his retirement. So if I look at my father and my mother, so they, they were like this, they were, I want a job, I understand a job as, as long as possible. But nowadays, I think this new generation, uh, all of the younger people, they want to be entre Intepreneur. They don't have a patient to work in a company for maybe five, five to 10 years.
So that's, I feel like this te. Was a good thing for this new generation because they can be more creatively for things and, uh, that's why maybe we can see all the time in new, uh, uh, start startup companies because they, they, they are, they have this kind of, uh, uh, feeling. They, the new generation, they are up to develop a new.
I don't feel they want to work as an employee anymore. I [00:08:00] have a daughter, she's 16 years years old. She wants to earn now $30,000 per month. She said, I, I not to work to earn less than $30,000 per month. I say, okay, Butta, what are going to do to, to have this, this money per month? So she said, I don't know, but that's something that I see the new generation.
They, they are think all the time how to make money. Um, they don't want to be an employee and they don't want to stay longer in the company. So that's my feeling. If I look back in the last 30 years, I think this is the movement that I see. And, uh, so for, for them I think it would be good, but for. We, we have a biggie problem to, to hire new people or to retain the people in the office.
So that's why maybe sometimes we are change, uh, the profile of the new employees because, We [00:09:00] are looking for people, maybe sometimes a little bit too older because, you know, the younger people, they are not going to stay in the company longer. So we have a challenge, I think, I think they, they'll be great Intepreneurs, the, the new generation, but we still need someone to do the, the hard work.
So someone has to, to put hands on. So that's something that I, I, I see when I compare the past with the, our current.
Hannah Robinson: And how has your country in particular changed in terms of global business in that time?
Cesar Ramos: Uh, maybe, maybe I can start now. Francisco. I will give you like maybe 10 minutes to refresh your, your mind.
uh, I can see from Brazil. We, we have one thing in Brazil. Maybe it's different for other countries. Maybe we do have in Mexico, maybe do have in Chile, but we have the foray exchange variation effects. It's changing in Brazil. It's changed every day. So let's say I, I [00:10:00] wanna invest in other countries and I have like, uh, 1 million s 1 million s today is $200,000.
So, and it changes a lot. Uh, I, I think like one, one challenge for the, the investor from Brazil is because we do not control. The four exchange rates change every day, so I don't feel they are comfortable or they feel safe to initiate an investment outside Brazil that's going to be mainly in US a dollar most of the time.
If you compare 50 pounds is no way, but I mean, just talk about like US dollar, because today is five s. Our local currents five s for $1. So it's, it's very expensive before, um, any company that they're going to, to be aary outside of, uh, their local continent, to, to [00:11:00] play with this kind of, uh, uh, economic issue, which you call for exchange variation, which we do not have a control.
So that's something that, uh, we used to have in the. Uh, it was stable for some period of time, but it's back again. So I think one barrier for any Intepreneur or any, uh, businessman to, to have a business outside Brazil, it's not only the culture or the language, but also this, uh, let's say unstable situation of our local.
Occurrence because sometimes they cannot afford to, to keep the business outside Brazil. Cause they, they cannot pay the bills. So that's, uh, something that I see from Brazil. Especially from Brazil because we, we, we have this kind of change like, uh, every, every minute. So when you open this stock market, then it starts like this kind of [00:12:00] fluctuation and, uh, sometimes go up to six, $1 and, uh, five one.
And, um, I don't see like, uh, in a forthcoming month, uh, a, a big change on this. So that's something that I think makes our investor afraid to go abroad.
Francisco Bracamonte: I absolutely agree with, uh, my friends. Uh, if you have a good idea or a good service and you want to, to go out of your country, You face thousands and thousands of regulations.
And, uh, for example, if you have, if you have, I have a client that has a website that gives services through the website and they need to review with each country how is the value of the tax treatment. For example, here in Mexico, the local, the local regulations as you to have a, a representative in Mexico.
Imagine the challenge of having one here in Mexico. If. Working in UK and you have a website. No. And the same if, [00:13:00] if you go to China, probably you need a, if you want to open a a company, you need a local partner. And if you went to Argentina, you can open a company, but you cannot pay to the foreign suppliers more than some threshold in dollars.
And if you go to Columbia, you have some tax on financial transactions and you need to identify the beneficial owner in other countries. And a lot, a lot of regulat. Obviously they can be compliant, but the point is the cost. You need to have experts in all the world. And the cost of complying with regulations now is, in my opinion, higher than 20 years ago.
So I think that now the economic, economic activities are regulated. Probably is necessary because money laundering and these kind of things. But now it's a challenge. If I would be the CFO of an international multinational company, probably I would have problem for sleeping every night because it's really, really complicated to be, uh, [00:14:00] considering all the regulations and to detect all the risks that you can have in the different countries.
So I think it's one of the most important challenge. I can, I can give a point here, uh, uh, probably we are, uh, we, we are part of Krestone because of, of what you are saying. We need to help or to drive our clients to do businesses in other countries. Obviously, if you are in an international network, like We in Kreston is not only being part of Kreston, is knowing the other partners that you have like, like, like says that we have a very close and good relat.
So you need to, to go to the international meetings, you need to participate in all the Kreston events and to know the other consultants. So in case that one of your clients in your country wants to go out of the country to invest in other countries, you can immediately introduce to the, uh, best option that you have in the network, uh, to, to [00:15:00] help them.
As I said in my previous, Comment, it's really important to understand the, the legal environment in each country. And obviously in Kreston we have experts in most of the, in the most important economies of the world. And knowing the expert is, uh, in my opinion, a very important thing to consider
Cesar Ramos: based on my experience, uh, with Krestone, uh, we have received in the last maybe 20 years, many, many referral.
So, which means that someone was looking to invest in Brazil and then they, they had a need to have someone in Brazil to assist them to know the local environment, the taxation, uh, the, the employees, uh, cost, social charge, et cetera. On the other hand, uh, I have, I have seen few Brazilian c. going outside Brazil.[00:16:00]
Uh, we, we have a few that I have already, uh, helped them to also to go to UK or to us, but when you compare, uh, the referrals inbound to Brazil with the referrals, outbound is is a very few. So, but, uh, again, um, Latin America is growing. So, uh, if you compare a few other, other continents, uh, European, north American, so we are still a little bit behind, but we, we, I think we are new.
So we, we do have time to grow, uh, ourselves. And then maybe in the future we, we are going to balance this kind of, uh, referrals in bond down to bound. But I would say, um, uh, based on question, uh, what I have seen, uh, they, they are very helpful to [00:17:00] assisting other countries and, uh, from, from Latin, Latin America or from Brazil, I mean, doing my best to, to assist any customer to, to, to be like, uh, to bring their investment or to their business into Brazil.
So that's, uh, I feel like I, I am. Passive on this point other than active. So I'm doing that, receiving a new investor and uh, I feel that Brazil is a little bit fragile to go outside based on, we have already discussed. So in that, I don't see big changes on the near future. I mean, talk about maybe 10, 15 years I think is going to, to stay how it.
Until we, we grow, uh, locally, our achieve grow and we need to grow, uh, as a country. So that's my my view regard this, uh, comment, this, this, this item. [00:18:00]
Hannah Robinson: And I think we'll finish on perhaps the most important question for a few of our listeners. Do you have any advice or insights you can offer to aspiring Intepreneurs looking to expand or move their business into a different cultural environ?
Francisco Bracamonte: Um, nobody wants start, so I, I need to start , but I, I was thinking it, it's really hard now because it's not only one advice. Probably you need or an Intepreneur needs a lot of advice as what, but now the world is, uh, is like one country now with communication, we are now closer between each other. So it's easier to look out of your country, probably you can, uh, win a lot of.
Uh, scales. If you sell out of your country, no, because you, you don't have a market of 20, 30 or 100 million people. You have a big market of billions of, of people. So you, you, you can reach an scale. So my, my advice of you lease is to, to use that technology and to go out of your [00:19:00] country, but, uh, be very careful in regulation.
I have had a lot of experiences with companies. Fail in other countries because they receive big penalty. So they have a lot of legal barriers to to, to continue the businesses because as an Intepreneur, you know about your product, your good, your service, what, but, and you're optimistic and you think, okay, tomorrow I will go out, out my country and I will go to 10 different countries.
But at the end of three, four years, you have a lot of labor, labor problems, tax problems, and a lot of different problems because you, you thought that you. The regulations in all the world were like in your country. Obviously it's not in this way, and I, I, I can say to Intepreneurs that they need to be prepared to know the environment in the, in other countries and to have a very close and good advice.
Cesar Ramos: Yes. I, I agree. Francisco, uh, my advice to an Intepreneur is to have a good Edge advisor behind someone from Resto, if it's [00:20:00] possible, because of course, uh, we have a, a great network. And, uh, if someone wants to go outside their own country, I think they have, they, they must have someone behind them, uh, to assist them on all this matter that, uh, Francisco has just said.
So, regulation, employee issues, or any kind of, uh, taxation issues. So I think the first, first thing they have to be, uh, orientate by a professional, uh, advisor. And, um, and I think like we are doing this so far I think we are, we are on this path. So, and uh, uh, I would continue doing that. So if anyone looking for, looking forward to have any business outside Brazil, I'm going to work on this.
I will work with Creo members to advise how set up any business outside the. That's my, my main recommendation to any Intepreneur.
Hannah Robinson: And [00:21:00] that's it for episode four. A huge thank you to C and Francisco for your time. It's been an absolute pleasure talking to you both. Next week, we've got two new guests to introduce you to who will be representing the North American arm of Kreston.
But until then, a link to the report is as always in this episode's description and we'll see you next week. Goodbye.[00:22:00]