Doing business in Brazil - 2021
We have listed 7 aspects below for you to think to about. Aspects like language and specific culture considerations can affect the sucess of your startup or investment. But we believe doing the right things at the right time for the right reasons are even more important.
Other considerations of doing business in Brazil are more related to the product and service - tax, labour law and legal. We did not mention those here as they are covered in our AA Tax site and also AA Risk site - links below on this page.
We setup AA Risk to reduce not only these risks but also take you to the market faster.
Doing Business in Brazil - Peter Drucker
We truly believe in Peter Drucker´s 2 reasons for a business to exist.
If you have an innovative product or service Brazil is waiting for you.
If you can market and look after your customer better, Brazil is waiting for you.
Brazil is a cheap country to setup in Dollar terms and even more so with foreign credit rates. But it can be expensive to keep going or get out, if your business model is not driven to selling at a profit as fast as possible.
Thyssen Krupp setup a steel mill in Rio de Janeiro for all the right reasons. And then did everything wrong after that. German planning and engineering doesn't get better than Thyssen Krupp. But in Brazil (coupled to the USA plant that would buy ingots from the Brazil plant) They did it wrong. You can read up a litte more on this below. Google it to see more detailed studies as to what went wrong for them doing business in Brazil.
Der Spiegel article - Thyssen Krupp
Doing Business in Brazil - Decorum - 12 aspects
1-Brazil has a very active night social scene. Every night of the week people are out.
2-Be home by 22h00 if you can. There are no werewolves here but the next day you might feel like one in the sunlight.
3-Having coffee is normal for the start of any business meeting.
4-Having lunch and dinner AFTER the deal is agreed is good and normal. Most companies do lunch.
5-Any deals or introductions done in a social environement will be difficult to give continuity.
6-Dont go off-piste unless you have someone you trust.
7-Most crime is drug related.
8-Don´t flash your Rolex or Dollars.
9-Pay by credit card. Keep you card in sight always.
10-Most hotel staff will reliably direct you or indicate good options – after you ask their names and make acquaintance.
11-COVID handshakes are normal all round.
12-All business meets still abide by COVID guidelines.
Doing Business in Brazil - Just do It
- We just love this saying as it´s exactly what we believe.
- Too many companies spend a lot of money setting up. To then find the market is not what they expected.
- Business plans have very short life spans and validity in today´s markets.
- Go MPV – Minimum Viable Product. Develop as you go.
- Go UX – Focus on what the customer wants.
- Go Agile Project approach – Small cycles of PDCA (plan, do, check, act).
Doing Business in Brazil - Blitz Scaling - Reid Hoffman
Blitz Scaling means growing your startup as fast possible to the dominant market position.
This means accepting higher risks and lower efficiencies. Doing business in Brazil is no different.
The 4 Growth Factors for Blitz-Scaling your Brazil startup are:
1-You need a big market. And preferably a future big market. Brazil is that future big market.
2-Distribution. How do you get your product into people's hands. Good distribution is achievable, versus great distribution with higher costs.
3-Profit Margin. You can´t sustain your growth without profit driven results.
4-Network effects. This is how each new customer consolidates or makes the network better. Franchising might be a good business model here in Brazil for doing business. Cellphone app´s and SaaS IT products are also common business models here.
But look out for the 2 important growth limitations:
1-Adaptation and acceptance of the product - it must be used with frequency and liked.
2-Operational scaling. You need the infrastructure in place to attend to your growth. The determining aspect on this is to make sure your sales are growing faster than the infrastructure costs you have to look after your market.
Brazilians do have a tendency to adapt to new business models quickly. So the market already leans towards Blitz Scaling.
On the negative side we often say at AA Risk that business partners or the market will first try copy, then accept reluctantly if it can´t copy, and finally sabotage when they see it grow. So take ownership of your own growth and focus on scaling up as fast possible.
Doing Business in Brazil - Business Tourism
Why not have a “Workcation”?
Brazil is a fantastic place to spend a few days:
- We have great beaches.
- Great Sightseeing.
- Travelling across Brazil there are different climate zones.
- Loads of cultural events to explore.
Brazil also has the Amazon. Immerse yourself in a truly unique place.
Brazil has the Foz de Iguacu waterfalls. Niagara Falls on turbo mode.
Brazil has Fernando de Noronha a world heritage site.
So we believe its worth coming to Brazil to do business and plan your startup, while taking some time out to enjoy a Workcation. AA Risk can help you get the work done and make sure there is time for you to get to see Brazil.
Doing Business in Brazil - Getting around
If you are coming to do business through AA Risk we will pick you up on your arrival.
Uber and 99 are two local apps that work pretty well for most large cities. Especially Sao Paulo. Waiting times are 3 minutes to 10 minutes normally.
In Sao Paulo using the metro is often a good option as traffic is pretty heavy most of the day.
Beware when hiring rental cars that speed limits change a lot and are usually followed by speed radars. There is also a car rotation scheme in place that means a certain day of the week you cant use that car between 8h00am to 10ham and 17h00pm to 20h00pm.
Having said all of the above, Sao Paulo has the largest helicopter fleet in the world for a city. There are about 2000 helicopters circulating in the city according to ANAC, the aviatition authority. So flying is definately an option for doing business in Brazil. This is because of congestion in the road system, but also the concentration of the GDP and thus wealth in the Sao Paulo state. About 34% of GDP comes from Sao Paulo state. Because of the high number of helicopter operators rates can be competitive.
See below the world raking in 2021 reported by InvestSP.gov for cities with the largest helicopter fleets:
01° – São Paulo
02° – New York
03° – Tokyo
04° – Rio de Janeiro
05° – London
06° – Belo Horizonte
07° – Santiago
08° – Mexico City
09° – Bogotá
10° – Peking
Doing Business in Brazil - AA Risk Consultancy
Our main focus is always to download your requirements through our Lesson process. You teach us what your investment or business is about. So we can then be more effective in our work, taking you to the market as fast as possible.
Doing business in Brazil can be complicated so we have in place for your startup or investment all the serives you might need:
1-Legal Consulting through DDL Lawyers and their 24-man legal team.
2-Accounting through Audite.
3-Financial and Tax Planning through one of our partners Carlos, who has 30 years big company experience across almost all sectors.
Click on the link below to see more of what we do and about Brazil (6 minute video):
If you are interested in talking to us please visit our site at AA Risk or our tax consultancy AA Tax below:
We hope our Blog entry was useful and relatively light reading. Thank you for your visit.
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