HK's efficiency and freedom make it an ideal home for SMEs
Many of the big names of American business have found a home in Hong Kong, but that should not obscure the significant contribution that small- and medium-sized enterprises (SMEs), founded and run by US entrepreneurs, also make to the health of the local economy.
Many of the big names of American business have found a home in Hong Kong, but that should not obscure the significant contribution that small- and medium-sized enterprises (SMEs), founded and run by US entrepreneurs, also make to the health of the local economy.
They can be found in every key sector, and what attracts them, not surprisingly, is the city's can-do spirit, speed of action, and the general absence of red tape.
"Hong Kong is a really easy place to start a business," says Laurie Goldberg, managing director of AmeriCraft Imports, which distributes craft beers to more than 100 local bars, restaurants, hotels, supermarkets and private clubs. "There is a wonderful community of entrepreneurs, and there are so many networking events and free resources to help in getting a business off the ground." What originally inspired Goldberg to strike out on her own was coming into contact with numerous people who had been successful in doing just that. Many of them were generous with their time and help in offering practical advice and suggesting useful connections.
Also important at various points were the back-up and guidelines available, when necessary, from the Hong Kong government and organisations such as the American Chamber of Commerce.
"That said, you need to be proactive in seeking out the support and resources which will be most beneficial," says Goldberg, whose plans for the next phase include possible expansion into other countries in Asia. "When I first started the firm, most people in Hong Kong had never heard of craft beer and we had to work hard to build a market for it. Fortunately, it has taken off over the past two years and, as a result, there is more awareness and interest in our products - but also a lot more competition."
In itemising some of the common challenges all SMEs are still going to face, she puts recruitment at the top of the list.
"The main thing I repeatedly hear about is finding talent that is the right fit for the business and then retaining that talent," Goldberg says. "Finding professional service providers who appreciate that SMEs have a limited budget can also be challenging, as can securing bank loans and funding when you are just getting started."
With the benefit of hindsight, she feels that it would be helpful if there was a handbook or guide listing all the resources available to SMEs, as well as service providers who cater specifically to the sector.
Fellow American entrepreneur Donald Austin is similarly enthusiastic about the straightforward procedures and supportive environment for setting up in Hong Kong, but he, too, can see there are still areas for improvement.
Most notably, he points to the need for banks to up their game when it comes to working with start-ups and SMEs, and the possibility of speeding up work visas for individuals with specialist know-how.
"What drives me nuts is the banks," says the managing director of Austin Pacific, the consultancy firm he set up eight years ago to offer IT advisory services for multinationals with operations around Asia. "They don't really do anything for SMEs and are not very friendly; they make money off the big companies. Getting a credit card with a HK$100,000 limit is a pain and there is a lot of paperwork to get a loan, some of it just related to banking regulations."
Having first moved to Hong Kong 14 years ago, while still a consultant with PricewaterhouseCoopers (now PwC), Austin broke away when he felt the need for a change and had sounded out a couple of potential clients who were happy to support him.
Now, he has a small team, which varies in number depending on the assignments in hand, and finds Hong Kong is a more than efficient base for administering business done on the mainland, Thailand and elsewhere.
Like most business people, he wouldn't complain if taxes were lower. But he agrees that registering and running an SME is "pretty easy" and that the government's main task is to just get out of the way. "There are zillions of companies in Hong Kong to help with corporate services, so you can set up in a week and it doesn't cost much," Austin says. "Immigration, though, could make it easier for SMEs to bring in outsiders when they need them. It is not impossible, but a little harder than for big companies."