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What Types of Businesses are Successful in Turkey?

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Hello there folks,

Couple of my friends are of opinion that they can startup a business in Turkey as expats and they are keenly looking into different domains.

While my point of view is that more likely they will end up losing their money. Simply because its not easy to startup a business in Turkey and there are many reasons for my view.

I would like to know if there are folks out there who came to turkey as expats and are now running successful businesses. Would they share their experience with us on this forum and their advice?

cheers

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I see bars, cafes, restaurants and various stores open and close all the time.  So it is risky, and there are much safer places to invest money. Often, opening a small business is basically giving yourself a low-paying job with very long hours and a lot of work! So I don't have a high opinion of starting a business in Turkey.

The first thing to do is write a business plan. This is not something one should do in their head, it needs to be written. There are plenty of resources that can be found in Google about how to write one, as well as examples. Writing a business plan will also force one to do their homework, and market research. Many businesses worldwide fail because they had no business plan, or they didn't follow it.

One interesting note. If a business in Turkey is successful, someone will copy it. And probably open a copycat business right across the street. There's a street in Izmir we used to call "potato alley." A guy opened the first business selling stuffed potatoes. Now the whole street is populated buy businesses who copied him. A Turk once told me "If you open a bar and it is successful, after two years, sell it!" He was referring to the fact that if a business is successful and word gets out, everybody will start doing the same thing in the same place.

If they buy a business, this is not a good idea. Chances are the previous owner will grossly exaggerate the income, and not tell them anything about the problems or expenses. This is so common that it can be expected. Also, if they buy a company, they will incur any liabilities of that company (including pending lawsuits) that they may know nothing about. So if they want to run it as a company, they should open a new one instead of buying an already-existing one.

Me, I would avoid doing it completely. I have said this in another topic... it is much safer and secure to invest in the stocks and bonds of already existing companies with a successful outlook, in a mutual fund which pools clients' money, run by a fund manager who is educated to know good businesses from bad ones.

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On 1/20/2018 at 1:36 PM, Ken Grubb said:

it is much safer and secure to invest in the stocks and bonds of already existing companies with a successful outlook, in a mutual fund which pools clients' money, run by a fund manager who is educated to know good businesses from bad ones.

You know Ken,

In countries where there are a lot of political problems and the government is not stable and even the country is somewhat depend upon other countries, those markets you said might be risky. In countries with stable condition yeah that would be great. You have to invest in bonds and mutual funds. Banks give not interest for saving accounts! You cannot just stay and watch the market or talk about the country.

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I would also state that foreigners having businesses here are taking a huge risk. Much better to invest back home and bring the money over. Setting up a business does not give you the right to work in it.

We had a business partner about 12 years ago, nice Turkish chap, he kept asking me what was successful in Europe that was not already in Turkey. I did my research and produced about 5 ideas, and sourced them. every one he reckoned would not succeed in Turkey. Every one  of those products is here now. we are still friends but not business partners.

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@Star

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In countries where there are a lot of political problems and the government is not stable and even the country is somewhat depend upon other countries, those markets you said might be risky. In countries with stable condition yeah that would be great.

As I understand it, the USA is a preferred place to invest because it is very stable. Certain other countries are the same, of course. I mention it because I invested in a mutual fund, T Rowe Price, which is in the USA. I learned about then when I was earning my MBA and learning about my own personal investment options, and T Rowe Price has never disappointed me.

As far as I know, you can invest in T Rowe Price's mutual funds regardless of what country you are in. And by the way, I receive nothing from them by mentioning their name! I would just like to lessen the number of foreigners who lose substantial amounts of money in Turkey.

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Banks give not interest for saving accounts! You cannot just stay and watch the market or talk about the country.

If you have a bank account which yields interest, then they are investing your money. They are using it to make money, and giving you a part of it. Otherwise, why would they be paying you to leave your money with them, when they will at some point just have to give it all back?

If you have an interest-bearing savings or checking account, then your bank is using your money to invest in what is called "commercial paper." Commercial paper is extremely short-term loans. Let's say some company needs like ten million dollars to cover something for one night. Or for a week. They borrow it. And pay interest. These companies are so strong, and so trustworthy, the return of the money they borrow is practically a certainty. So a low amount of interest is asked. And this is actually passed on to you.

And of course if the inflation rate in that country is high, the interest rates will also be high. The reverse is also true.

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In countries where there are a lot of political problems and the government is not stable and even the country is somewhat depend upon other countries, those markets you said might be risky.

This also contributes to the interest rates being paid. So the more stable the country, the lower the interest rates, but the more surety you have in actually being able to withdraw your money when you need it.

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I would also state that foreigners having businesses here are taking a huge risk. Much better to invest back home and bring the money over.

Abso-freaking-lutely.

If you are from a country which has a good semblance of stability, instead of taking the HUGE risk of starting a business in Turkey, consider investing in your own country and live off the returns of those investments to support your life in Turkey.

I invested in the USA for years. I'm not a rich guy. I sacrificed a lot in those days by living on a fraction of what I was making. I am nobody special.

I did something that I would happily run out of breath recommending to others: I read books on personal finance and investing, and followed the advice I learned in those books. So again I say, the best investment you will ever make in your life is in a good book on how to manage your personal finances, and invest.

If you remember nothing else from this topic, I hope you at least remember the paragraph above, and take my advice.

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We had a business partner about 12 years ago, nice Turkish chap, he kept asking me what was successful in Europe that was not already in Turkey. I did my research and produced about 5 ideas, and sourced them. every one he reckoned would not succeed in Turkey. Every one  of those products is here now. we are still friends but not business partners.

Jeez. What a great example. The mentality is totally different here.

I first came here as a young MBA graduate. I saw the way business was done here, and thought "I can do it better." "I can teach them." I was completely wrong. It was not that I was "smarter than them." that was a complete illusion for me. What I came to understand is that the whole society, the whole market, is just completely different from what I was taught at the university and from American business.

It is funny because when I have told Turkish businessmen about my early, awkward experiences in Turkey, they said to me: "now you have your Turkish MBA!"

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  • 1 year later...
On 24/01/2018 at 00:13, Ken Grubb said:

What I came to understand is that the whole society, the whole market, is just completely different from what I was taught at the university and from American business.

America is not the world. She starts behind their borders. Interesting but not surprising fact that most u.s. think their meaning works everywhere. How would you explain that Ken?

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I will add on to this topic for the sole fact that everything Ken has mentioned, is spot-on. I will say that if you do not have a large amount to invest and you have the possibility of having a Turkish bank account, that some of them offer ridiculous interest bearing savings accounts. Some as high as 12-13%. THis is not a long term strategy, but if you have some money you can put aside for a while, I say go for it.

Justin Mays
Property Turkey
"Invest Today, Benefit Tomorrow"
Email: [email protected] / Whatsapp: +90 505 177 18 28

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The interest rate was recently reduced from about 24% to just over 19%, in TL of course. The interest rate on hard currencies is far less. I consider investing in Turkey to have above average risk, certainly there have been many foreigners who have come unstuck with local partners.

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Unstuck with local partners...something like mentality differencies Ibrahim. Or/and different meanings, and beliefs. How do they recapitalize 19%? Turkey has - as far i know - no substantial natural resources, otherwise the western crooks had them shurely embedded into their ponzi-scheme. (And endless printing money like the EZB is not the solution, and causes inflation; Some constitutional lawyers say this is an illegal disseizin. One of my reasons to leave the euro zone.) At least, as far as i know the turkish national bank also dont obliges to gold backing as Russia a.e. Or they do? Closer informations about that is highly appreciated.

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Having sold my house in England and bought an apartment here in Turkey I have been considering what I should do with the remaining money. I am thinking of transferring some to my Turkish bank account to cover expenses and buying a car. The rest I think I will leave in the UK, some in my UK bank and the rest I will probably split between investment funds.

I fully agree that setting up a business in Turkey is probably not a good idea. I lost money when I gave it to my wife to set up her own business, she was very enthusiastic about it at first but as Ken said " opening a small business is basically giving yourself a low-paying job with very long hours and a lot of work".

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