Migrant entrepreneurs overcome barriers to starting up businesses in Australia
Tuesday, 17 Sept 2013 | By Nina Hendy Startup Smart
Migrant entrepreneurs face an almighty battle when launching a start-up in Australia.
They might have little money to start, and bank loans are nearly impossible to secure given the lack of recognised savings by our banks. Leases are also extremely hard to secure.
Speaking and writing English is a major headache for some. Most have no established family or friend networks.
And the business culture is completely foreign to them, with one migrant explaining she mistakenly thought she could only drink coffee when accepting invitations for meetings over coffee.
Hungary-born Sydneysider Orsi Parkanyi founded network group Women as Entrepreneurs 18 months ago, which now has more than 2,000 members all over the country.
Parkanyi has lived in Australia for eight years and has near perfect English, but believes her accent is holding her back.
“I’m proud of being a migrant, but I am trying to get rid of my accent, because I believe it would make my life easier if I didn’t have it.”
Many in her network are migrants, who have recounted numerous stories of cultural blunders to her.
“A Sri Lankan member explained that she’s not allowed to say no to a man in her culture, which made it extremely difficult for her to negotiate with men. But she forced herself to overcome this because she was desperate to grow her business. She’s even more successful and is now teaching me how to negotiate better.”
Parkanyi says many of her migrant members are learning correct etiquette at her networking events. She had to approach one member distributing brochures at a recent Sydney event to explain that she needed permission.
“I began explaining how things are done in Australia, not wanting to upset her. She burst into tears of relief and thanked me over and over for explaining, saying she just didn’t know what was acceptable here, and that no one had ever told her. I really didn’t want to upset her, and I do hope she’s more successful at networking events now.”
Funding is another major headache.
German-born owner of Melbourne’s famed Ganache Chocolate, Arno Backes says money was hard to come by when launching in 2008. He knew his talents would be rewarded with strong trade, but without a recognised credit history, a loan was virtually impossible.
“We had to take out conditions that weren’t that fantastic to get the loan, which meant we had to pay more than others would have had to.”
Trying to secure a lease was also nearly impossible, he says.
In a turn for the books, he expanded into the CBD with a chocolate lounge on Collins Street three years ago and has since fielded numerous approaches by estate agents and landlords offering him a sneak peek at new listings.
Parkanyi, who has forked out $20,000 for visas to stay in Australia, agrees that securing funding is hard. She didn’t have a spare dollar to launch a business so instead invested her time.
“Migrants just don’t have money to invest in a business. And if they fail, they can’t move in with mum or dad, because most are on their own here and don’t have any networks. You don’t have any other choice than to make it work. Migrants have a real hunger to make it work.”
Money was also an issue for Indian-born founder of IT firm Digital Armour Corporation Maria Padisetti early on. She had hoped that turning to an overseas investor might help fund further growth in her business, but she ended up in huge debt.
“It was just so hard to get funding from within Australia, but looking overseas ended up being a huge mistake. I had to build the business up again from scratch, which was really hard.”
But she did, and today Padisetti has 20 staff.
Despite funding headaches, many don’t expect any sort of help from Australia.
Migrants baulked when asked if they had considered applying for a government loan, explaining they didn’t feel entitled, despite such grants existing.
Backes didn’t consider applying for government funding when launching his business in 2008.
“It just didn’t feel right. We were happy to be here and make it on our own. And we have.”
Laid-back culture a bonus
Interestingly, depending on the cultural experiences of migrants, some believe that launching a start-up in Australia is easier than their birth countries.
Chinese-born online store owner Phoebe Yu says the rules and regulations that govern business in Australia is pretty clear cut and easy to follow. She launched eco-store ettitude.com.au in 2008.
“It’s far easier to launch a business here than in China. Here, the government tries to help you. In China, they just try and regulate you,” Yu says.
Backes says rules and regulations aren’t hard and fast in Australia.
“The rules just aren’t as strict here. I can say to a council worker questioning something, ‘OK, let’s talk about it in a week’, and then he goes on holidays and someone else comes in and deals with it entirely differently.”
Migrants are also prolific outsourcers, happy to admit they don’t understand elements of running a business such as marketing, major investments in technology or signing a lease.
Backes outsourced public relations initially, among other elements.
“Even now, legal documents or language that people don’t use every day is challenging to me. I’d always get someone to help me with something I didn’t understand,” he says.
This is a valuable lesson for Aussie start-up owners, who can be guilty of trying to do everything.
The old-fashioned skill of networking is forced upon migrants, who have no networks to fall back on when launching their business.
Chinese-born Melissa Ran is behind task management software start-up Mijura, and says finding legitimate ways to network with people is vital.
“The main challenge as a migrant is the lack of pre-existing networks that those with established families here can access. It’s not just building a business from the ground up, but also forming personal and professional relationships, finding mentors, sponsors and professional champions without the benefit of family.
“As a result, we need to work extra hard to prove ourselves and attract successful people around us who want to support us and be invested in our success.”
Backes joined a chef’s club, where he met many chief executives of catering companies and chefs, who pointed him in the right direction in those early days.
“You’ve got to find the right help, not give up and not let people walk all over you,” he says.
The unknown stories
Migrants can even have a reason for refusing to fail that others aren’t even aware of.
African-born Melburnian Aaron Mashano is behind a start-up mentoring program for entrepreneurs, Leaders of Tomorrow. He recalls making $20,000 a couple of months ago, which was the most he had ever made in one hit.
He sent a large chunk of the money to his family in Africa, who expect regular financial handouts from him.
“I often have to decide whether to pay the rent first, or send the money home to mum because she’s been sick.
“I just keep chipping away at my business and spend a lot of time on it. I have to. My family expect me to give this opportunity I have been given my all.”