In July I relocated from Aberdeen to Perth Australia, where Pinsent Masons has recently opened an office. Since my arrival, I have had a number of discussions with business people (many of them Scots) who have set up a branch or operation in Australia and what they have found to be the success factors as well as the challenges. Here are some key themes:
Follow the client. Some companies started with just one person or one small team spending time here on a client, but that enabled the business to assess the wider opportunity before making a commitment. An existing client relationship can give you the necessary foothold and revenue stream to facilitate establishment in-country.
Know “what you’re about”. Australia’s economy has performed well for a long time and in any sector you are likely to face a well-established and sophisticated set of competitors. For many new entrants to the market, success lies in knowing your core strength and then maintaining a relentless focus on it. If your message is simple, it may be easier and faster to develop a profile.
Understand the red flags. It is tempting to assume that because of a common language and cultural similarities, the risks your business faces in Australia will be the same as the risks your business faces in the UK. Some factors will be an unwelcome disruption to your business plan unless you have investigated and assessed them carefully in advance. The ones I hear about most frequently are the challenging industrial relations landscape, significantly higher salary and pension contribution costs, skills shortages, workforce insurances, and costly banking facilities.
Upgrade your IT. It has surprised me how often this one has been cited as a potential blocker. If your activity in this part of the world needs to interact to any extent with your business at home, then inefficient IT systems can be a major headache. Think about all your internal processes - accounting, time writing, file sharing – as well as your internal communications systems, and be sure that they are capable of working smoothly when it is 9am on a Monday morning in Western Australia and the UK won’t wake up for another 7 hours.
Invest in travel. There is no substitute for spending time in-country to gain a proper understanding of the opportunities and the risks (and even the IT headaches). A four day visit every 24 months is definitely not enough. Regular and meaningful visits from colleagues and management can be a game changer for successful expansion.
Drink a lot of coffee. The business community is open to meeting new entrants and willing to have a coffee and learn a bit about them. This is a real positive, because at the very least, you get the opportunity to make a first impression over a flat white.
With a growing sense of optimism about a resurgence in the Australian minerals and oil & gas sectors, some of you may be considering expansion into this region. Best of luck, and see you there.