I have seen an increasing number of foreigners locating in smaller Chinese towns to open up business: restaurants, guest houses, travel service firms, consulting firms, and English teaching centers. We all think we have a good business idea when we start out, but inevitably, it changes along the way.
What are some of the lessons that we can learn now, for free, without wasting time when trying to establish our business in China? What kinds of ideas succeed in China's not so well known cities and towns?
I have already mentioned some of the different aspects of opening a restaurant in China, and especially when in small cities or towns, restaurants, along with all the other business ideas out there, need to be evaluated in light of the local situation. What of the other ideas like hostels, travel agencies, and teaching English?
What are your business's differenciators? What makes you different from other businesses that provide a similar product or service? If a foreigner sets up another Chinese restaurant, what makes the foreigner's restaurant any different the local-run choices? Better yet, does the foreign-run travel service provide anything better than a Chinese-run agency? Good questions. Some of those sound silly, but nothing that has not been tried by a foreigner in China's smal towns.
The restaurant needs to have something different. Western food is the quick answer, but will locals like it enough to pay for it? The foreign-run guest house needs to provide some service that the millions of Chinese guest houses do not already provide, regardless of whether the intended customers are Chinese or foreign backpackers. A travel service needs to have some differenciator besides "we speak English better" to be able to sustain business in that industry. Sure, the English teachers seem to have easy answers to these questions, but depending on the size of the town, can the English market support a business? And does the business consultant really specialize in anything worth paying for?
These not only are good questions, they are questions the Chinese government is very likely to ask when setting up the business. If you do not have the basic answers to questions from government industry and commerce officials, setting up the business may not be such a smooth process. Still more important than that, once the business is set up, will it make any money?
The moral of this ramble is this: we need to bounce our China business ideas off other business people, especially ones experienced in China. Sometimes, things work a little differently than we might have thought. They certainly have for me in my business here.
There is no blog entry or internet resource that can quickly give us the answer to whether our particular business idea is a good fit for any one Chinese town. We need to know the local situation and work through our business plan carefully with others that know what they are talking about. At least, we would be wise to do so.
