Starting a Side Business
I plan to start a side business dealing with the purchase of shoes, clothing, as well as gas-powered yard equipment and ship them for resale to the Dominican Republic. Participants of the business will include Export management company (EMC), Export trading company (ETC), import/export merchant, commission agents, commission representatives, Country-controlled buying agents, and foreign distributors. EMC deals with export operations for companies targeting foreign markets. The company supports the hiring of dealers, marketing, promotion, advertisement, and organizing the shipping process. On the other hand, ETC can help identify the demand for shoes, clothing, and gas-powered yard equipment in the Dominican Republic. The government will also be involved in the business because of business legislation and licensing. It will be necessary to understand charges on taxes to determine the profitability of the business. Customers will also form part of the participant and it will be necessary to understand their requirements.
The success of the business can be faced with many challenges including unfair competition in the market, high taxation, unfavorable business environment, language barrier, and cultural differences. Unfair competition for these items can affect the market and hinder the selling process. It can affect prices making it impossible to achieve the expected profitability. High taxation can make it expensive to run the business and threaten its existence. Cultural differences and language barriers between the two regions can adversely affect the business. It can make it difficult to communicate freely with the local people (Shen, Puig & Paul, 2017). Cultural differences can frustrate efforts to understand the market and establish effective market penetration strategies. The language barrier and cultural differences can affect the sharing of ideas, understanding the market requirement, and persuading customers.
Reference
Shen, Z., Puig, F., & Paul, J. (2017). Foreign market entry mode research: A review and research agenda. The International Trade Journal, 31(5), 429-456.
