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Outsourcing And Offshoring Your Small Business To China

Jan 25, 2008
American companies taking their business to China has been a much discussed topic in recent weeks. Product recalls and unsafe production practices have caused a public backlash that may express itself throughout the next few months, but considering the fact that none of the big players are vowing to pull their production facilities out of that region, what is it that they know which you might not yet have caught onto?

The facts are simple but compelling: moving business operations to China and profiting from the country's explosive growth and lack of governmental red tape and regulations is such a surefire guarantee of profit that not even public opinion and high profile recalls will dissuade the industry's heavy hitters from continuing on with their business practice. As a small business owner, you too can profit from this kind of expansion simply because of the low wages and lack of regulatory oversight that make China a powerhouse for United States business interests.

While it may appear odd to have items manufactured in China by American companies, consider that the majority of these goods are not imported to the United States. Instead, they are being sold to the Chinese consumer and thereby tap into a market that heretofore was all but closed to a business performing the same operations in America and hoping to export the goods to China. This actually benefits the small entrepreneur more than it does the big Fortune 500 Company in that the entrepreneur is able to move quickly in a rapidly changing corporate landscape in China while the large company will require approval from a number of departments and shareholders.

Of course, there is more to growing your business with the help of outsourcing and offshoring to China than simply setting up shop and hanging a sign in a shop window. For example, while governmental red tape and hurdles to be overcome are much reduced when compared to the United States, local taxing agencies are not so quickly vanquished. As a matter of fact, those who believe the American tax system to be Byzantine have not experienced the Chinese system such as it applies for the foreign business entity. Meticulous adherence to the tax codes is vital for the survival of your business, and a failure to understand the rules and regulations will most likely lead to your losing a lot more money than you think possible. Get the help and counsel of qualified professionals to ensure you are not hemorrhaging tax money where it is not needed.

Be wise when selection the location for your business in China. Law enforcement and interpretations of laws and regulations vary from city to city, and you will do well to only move your operations to an area that will favor your business. This may be accomplished with the help of a Chinese partner who is aware of the local laws and their enforcement.

Last but not least, remember that cutting costs often means cutting corners, and while the larger companies are able to mostly recover from the hits experienced because of the recent rash of export alerts and recalls, the small business most likely will not be able to do so.
About the Author
Mark Stewart frequently writes on topics in the home business and Internet marketing industry. Finally learn the truth about how you can launch 6 streams of automated affiliate income streams in just 24 hours. For more information visit: Home Based Business Ideas
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