The Rule of Three of doing business in Brazil ©
Rule of three of doing business in Brazil
states that in comparison with your home country¹ to invest in Brazil
- It will costs three times more
- It will takes three times longer
- It will makes three time more profit
Set a TIME AND DOLLAR AMOUNT stop loss order
The Rule of Three will help to set expectations right. Numerous blogs are providing examples of the validity of the rule. There are no easy answers for starting a new business in Brazil. You may have checked your value proposition very well, checked competition and calculated your businessplan with a profitable bottom-line, however you still may run out of money or time.
Kory Melby, an AGbusiness consultant based in Goiania, expressed it very well: From my experience watching other gringoes, it seems as though one must survive in order to thrive. From my experience, I highly recommend that one has a secondary source of income while you are setting up shop. This can sustain you during the “dry pockets” when zero revenue is coming in. I also think it is important to put in a TIME AND DOLLAR AMOUNT stop loss order on your Brazilian endeavor.
Black hole syndrom
I have witnessed many foreigners fall into the “BLACK HOLE SYNDROME” in Brazil. They come with the intention of investing X dollars in Brazil with the dream of double digit returns. More often than not, the initial investment was 2X or 3X what they planned on (start up cost surprises). Murphy’s Law kicks in and the investment hits a bump in the road. Because of pride, ego, stubbornness and ignorance, the investor hires additional legal counsel to process (sue) the parties involved to recoup his investment. Time, dollars, travel, lawyers, and opportunity cost of money over time tend to bleed all parties dry.
Set a STOP-LOSS order with a money and time amount to beinvested in Brazil
Legal action in Brazil is not quick. It is normal for a legal action to take several years or more.
Denial, anger and frustration increase to exponential levels. Victimization and blame become common themes with the investor. Negativism about the country grows and new “Real” opportunities are missed while doing battle on other fronts. If you are reading this and do not understand the subtle hints I am giving you, you are not ready for Brazil. If you feel you can handle the landmines and are willing to immerse yourself into language and culture while learning Portuguese, give me a call. Maybe I can be of value to you. Until some of the initial hoops are jumped through as eluded to on intro page, I think further consultations are a waste of my time and yours.
¹Assuming your home country is ranked in the Top 50 list of “Ease of doing business” index published by the Worldbank
