6 reasons not to open your business in Miami
Factors for not anchoring your company in one place and watching ships…
I love Miami. For holidays, family travel and shopping. If I could, I would have a house in Aventura and pass all the holiday bridges there. It’s a super-hot city with a lot of attractions to do. It’s full of Latin Americans and you don’t even need to try to speak English. Everyone understands our portuñol and they are used to Brazilians.
But is it the best place for you to start your business outside Brazil? Pragmatically answer these 3 questions:
1. Is your business focused on logistics, trading, real estate, retail, tourism, or entertainment?
2. Is your product or service aimed at the Latin American or senior citizens?
3 Can you capture customers remotely or develop your business without leaving your home?
If you answered NO to all the above questions, better think twice before starting your business in Miami. Exame magazine did an excellent story two weeks ago about it.
As much as it is a super nice city, with direct flights from Brazil and a climate close to ours, let’s think rationally about the challenges you will face if you choose the city as your international address.
Miami is the 11th. largest GDP in the US and has nearly 500,000 inhabitants, ranking 43rd. position. Why is it important? The fewer people, the fewer companies, and fewer jobs. In other words, you have another 40 options before Miami to study as your international address locations, such as: New York, Chicago, Philadelphia, Boston, Atlanta, San Francisco, Seattle, Dallas, Houston, Phoenix, Columbus, etc. Looking at GDP and population, Miami is the American Santos. Would you start a company in Santos?
When thinking about a place to internationalize, it’s important to look for hubs where you have a reasonable potential client base to work with. If you have a tech company, then the city does not make the list of the top 25 tech clusters in the US. See the official ranking here.
Miami is seen as a vacation or retirement city by Americans. The perception is that it is not a “serious” workaholic city that screams wealth and leadership. If one of your goals with internationalization is to have a good reputation and credibility with your American customers, you need to think about which addresses would bring this direct relationship to your brand. For example: Palo Alto = TECH, NYC = Luxury, Fashion, Financial services. It’s automatic. The fact that you locate your operation in an internationally recognized hub in the sector in which you operate, makes your customers associate your products or services with what these hubs offer. Think about it.
One of the most common reasons for establishing Brazilian companies in Miami is precisely to serve the local Brazilian community. Why? People already know your products and services, selling is easier. It could be, or it could be not. Here it is important to look at if you have any local competitors and secondly if your price would be competitive in the US so that people would want to buy it. Here I refer mainly to the food and beverage sector. Think about it, because you would pay US$ 4.59 for a 2L Guaraná Antarctica, when in Brazil it costs R$ 6.99. Better bring it in your suitcase, isn’t it? See more about this in my article from last week.
The qualification of professionals who will make your business to work abroad is one of the factors Survivor is INSTANCE or death of its international operation. Depending on your activity and the profile of the operation you want to set up, you must be sure that you will find the necessary skills for the operation. Generally, university rankings are a good indicator to assess availability of qualified local labor. The University of Miami ranks 46th. place in the national ranking . Still not convinced? Hope there’s more…
For retail, the city is a good option, but the seasonality of tourists requires the entrepreneur to have a cashier to withstand the low season. Still, the city appears in 11th. place in the ranking of US retail investment cities according to the National Retail Index . Again, there are 10 other cities to get on your radar in the US market…
The ApexBrasil has an office in Miami, the Bank of Brazil has local agencies, the StartOUT Brazil is training 15 startups to visit Miami in September this year and for sure you’ve been invited to an international mission to meet local opportunities to support Enterprise Florida . All initiatives are valid, because after all, the government also wants to promote business between countries.
If you answered YES to question number 1 in this article, use all the services that governments offer you. They are extremely useful and help a lot. I’ve already worked with investment attraction and it’s part of the government to promote the generation of jobs and local income. That’s what these programs are for.
But I’m going to tell you a secret: the role of these agencies is to say, “Come here, you’ll do fine here!”. And no, “actually, according to your business, for your company you’d better go somewhere else.” The agency defends the interest of the government, which has very clear public policies on where it wants to invest the taxpayer’s budget. This has nothing to do with wanting you to make more money and grow your business. In other words: the government has its priorities, which may or may not match yours. Be pragmatic with your investment in opening your international operation.
It could be that you have already chosen Miami or have lived there for a few years and are extremely happy. I’m sure you’ve evaluated the market well and there really are Brazilian businesses prospering in the place. Or it could be that your company is not achieving the expected results, in which case it may be appropriate to consider relocation.
With this article, I wanted to alert that there is a United States besides Miami that is also there to be conquered. Internationalization also needs some rationality. At Sterna, we design internationalization strategies that seek to maximize results for your company, not for governments. Did you choose another destination in the US to start your international operation? Tell me here. see you in the world,
Sterna is the first Internationalization Boutique in Brazil. We can’t help to open your company abroad. Shall we have coffee? firstname.lastname@example.org
Digital strategies for internationalization of companies
How to maximize your international positioning using the web? You’ve heard the…
Brand internationalization techniques to conquer the market
The Brazilian consumer market has unique characteristics when it comes to the…
Brasília: The city of opportunities
Do you know the digital tools to expand your business?