Opening a new business is always a challenge, but launching one overseas is especially difficult. If you want to stand any chance of success, here are 5 things that you need to know before you begin.
Where Will You Be Located?
So, you’ve decided to open a new business in Hungary? That’s great, but Hungary is a big place! You need to look much closer at the map and work out exactly where your business will be launching. As always in business, you should be making your decisions carefully and with purpose.
Don’t just throw a dart at the map and settle wherever it lands; research what Hungary has to offer and what your business can offer to Hungary.
Who is Your Target Audience?
Knowing your target demographic from the word go will enable you to hit the ground running when you finally make it to Hungary. The principles of defining your target audience remain the same wherever you are in the world – you are still looking for the same metrics and making the same considerations.
However, there may be subgroups in your niche present in other markets that don’t exist in your home market. Different cultures will sometimes approach the same products and services in different ways, to the point where some adverts simply won’t translate from the UK market to the Hungarian market.
Make sure you do your research and find out as much as you can about the people that you are going to be selling to.
What Are Your Administrative Obligations?
When you are launching a business in Hungary, you will need to register it via a process that shouldn’t take more than 4-5 days. Upon completing your registration, the company director or directors must then go and open a bank account in person. This means that you will need to take a trip to Hungary in order to launch your business officially; this isn’t one of those countries that you can just set a business up in remotely.
You need to thoroughly research what local laws and regulations will be applicable to your business.
Remember, Hungary is a part of the European Union. If you already have experience operating a business elsewhere in the EU, then you will already know more or less what to expect in terms of rules and regulations.
While EU member states do sometimes diverge from one another, they all adhere to the same baseline of minimum standards.
As well as identifying suitable premises for your new business, you also need to establish what your costs are going to be if you decide to start up there. For example, in addition to the costs of rent, you also need to factor in the costs of your utilities. You can use sites like Utility Bidder, who offer business gas comparison services, to quickly and easily compare utility costs – there are equivalent services for Hungary. Use Utility Bidder to establish whether the location you are considering in Hungary represents similar value to your UK options.
Will You Be An LLC?
Limited Liability Companies (LLC) are very popular in Hungary for foreign business owners. A Hungarian law passed in 2006, known as the “Companies Act”, regulates how businesses within Hungary can operate and structure themselves, so it is worth familiarising yourself with this law before you embark on your trip.
There are several benefits to being at the helm of an LLC that has made it an attractive option for foreign investors. For one thing, foreigners are legally permitted to own 100% of an LLC in Hungary, and the registration is about as quick and painless as it could possibly be.
What’s Your Marketing Strategy?
Mastering the art of marketing is a difficult undertaking. It doesn’t matter what business you are working on behalf of, or the market you are working in, effective marketing requires a good knowledge of not just marketing itself, but of the local culture in your target market. Before you get anywhere near to a new marketplace like Hungary, you should do your research into how your industry operates in an unfamiliar country.
You might find that many of the things you take as read in the UK market don’t apply to Hungary.
Similarly, you might find that the types of music and imagery that you find so effective for reaching out to the British public don’t resonate at all with Hungarians and fall completely flat.
The more preparation you do beforehand, the better your chances of success when you expand overseas. Hungary is a dynamic EU country that is attracting more and more investment every year. Once you have all of the above in place, you will be ready to join them.