Every year the World Bank publishes a report Doing Business on how easy (or difficult!) it is to start and run a business in 183 economies across the globe. The report also makes conclusions regarding ease of business across major trading regions such as Latin America. In the report’s own words:
It measures and tracks changes in regulations affecting 10 areas in the life cycle of a business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
I always study this report (and have been doing so since I worked in the Trade Section of the Canadian Embassy in Quito) since it tells me what are the new and reoccurring risks of doing business in Latin America and what my clients might or should be concerned about. It helps me think about mitigating these risk factors and what should be considered in a regional or country strategy. That’s why I’m writing about it here; it prepares entrepreneurs, shareholders, legal counsels and your executive management for success in the region.
Nevertheless, here’s the essence of my post today, if a business has the right people (team, country manager, board of directors etc.), the right “can do” attitude and the right market (profitable, growing and strategic – even if it’s within a region that may be deemed unfavorable for “doing business”) these risks can translate into issues and these same issues into a risk management plan. In effect, the presence of potential risks that chase away a weaker competitor makes doing business for those with the right people, action plan and market for their products or services extremely fulfilling. And that’s the beauty of working in developing markets.
One caveat before signing off; there is a correlation between ease of doing business and corruption. In other words, if doing business is perceived as being difficult due to a plethora of regulations and paperwork, there is always the temptation to take the easy road. I am not advocating this here. I am encouraging businesses to persevere with the highest ethical standards and to grow a profitable and good business; a business that others will want to emulate for its integrity, people, sense of purpose, perseverance and, of course, long-term profit numbers!