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5 Tips for Expanding Business to Indonesia

Indonesia is Southeast Asia’s largest economy with a GDP of $888 billion (based on ppp), ranking 10th in the world and averaging over 5% growth over the last decade. In the last 18 months, growth has slowed to below 5% and is projected by the World Bank to be 4.7% for 2015. President Joko Widodo (known as “Jokowi”) took office in October 2014 and has pledged to improve infrastructure and reduce barriers to doing business in Indonesia as a means to increase the country’s GDP growth rate to 7% by 2017.

Over the past decade Indonesia has enjoyed steady economic growth, though less than needed to pull the country into upper middle-income status, and the rate of growth is slowing.  Sound macroeconomic policies, combined with growing domestic demand and high commodity prices, propelled economic expansion in recent years, but protectionist policies, corruption at all levels of government, poor infrastructure, weak rule of law, and labor rigidity have taken their toll.

The business environment in Indonesia can be challenging, with Indonesia ranked 114 out of 189 countries in the Ease of Doing Business 2015 report by the World Bank. U.S firms can encounter complex bureaucratic and regulatory requirements which make it time-consuming to enter the market.

On that note, here are five tips for Foreign SMEs looking to expand to Indonesia.

“Please come and invest in Indonesia, if you have any problem, call me”. – President Joko Widodo on World Economic Forum 2015. Source: AP Images

 

1. Have a local contact who knows your industry

The successful overseas businesses that have entered Indonesia in recent years have generally recruited local entrepreneurs to tap into their experience in the Indonesian market.

The Indonesian market can be very confusing for a lot of foreign investors when they first arrived. Although improving, significant rule-of-law issues persist. It can be conflicting like Indonesia has begun to implement local content requirements that prevent some foreign products from being sold in Indonesia.

What’s best for any company is to either have a local contact with good experience in their industry in Indonesia, or to partner up with a local company who already has the business connections or management skills. It will really helped in order to find new clients and navigate the unique challenges of the local market.

2. Don’t take the large population for granted

One of the biggest dangers for overseas businesses looking to invest in Indonesia is being overly optimistic about how successful they’ll be because of the large population.

250 million Indonesians sounds big, but a lot of people don’t realize that it’s a very fragmented market because of geography. Most of the population is concentrated on the island of Java, but there are also big population centers in Sumatra and Sulawesi.

Local market dynamics also present obstacles to foreign investors taking advantage of the large consumer base. Domestic firms have a pretty strong influence right across Indonesia, and the government still looks to protect Indonesian small businesses from foreign competition.

In one of these measures, the minimum total investment before SMEs can do business in Indonesia is IDR 10,000,000,000 (ten billion Rupiah). 25% of total investment, i.e. IDR 2,500,000,000, shall be injected as equity and the remaining balance may be injected as shareholder loan.

While attracting foreign investment is a priority, SMEs currently planning to expand to Indonesia will need to be savvy with the investment they make.

3. Navigating geography

Part of this savviness is in deciding where to set up shop. Most of foreign SMEs have chosen to manage their Indonesian operations in Jakarta because, it’s where the big money is.

But this presents challenges for businesses whose product or services need space, such as agriculture. Navigating geography is a key skill of entrepreneurs with this type of business.

Being close to the decision-makers and clients is important, and most of them are in Jakarta, but sometimes those decision-makers are influenced by people on the ground.

Logistics can also be a problem because Indonesian infrastructure and service networks have not been developed the best at this point. Thus it is really important to know where your market is, consider travel costs and distribution channels to make sure your costs don’t blow out.

4. Build good relationships with your overseas staff

A key point to come out is how Indonesians value foreigners insights. Take the goodwill of Indonesian people at face value. Some of the companies that already in Indonesia have strong cross-cultural training programs in Indonesia and overseas, said that Indonesian staff appreciated working for foreign companies.

5. Be aware, but not put off, by politics

While diplomatic problems may occur  or defined some countries’ recent relationship with Indonesia, the small businesses exporting to Indonesia has remained consistent.

There’s no reason why this shouldn’t also be the case for businesses who establish a physical presence here. SMEs would be aware of those political factors definitely, but the business activity doesn’t really drop off. There’s a lot of exporters doing really well in Indonesia, and some of the companies have their rates of return are high compared to China and India.

 

How We Can Help

Established in 2010, FMB Consultant is a management consultancy that provides you, multidimensional services at most on financial, management, and branding. FMB Consultant works with a high-knowledge team leading in tax administration, legal company (PT PMA) establishment, business plan, financial planning and regular book-keeping. FMB Consultant has handled majority clients from national, multinational, to international companies cross-industries.

Media contact:

Ivan Liyanto, Managing Partner, ivan@fmbconsultant.com  +62 899-6777-879

 

 

References:1 2 3
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7 Cara Mengatur Pengeluaran Bisnis UMKM

Kondisi perekonomian yang tidak menentu membuat para pelaku usaha kecil dan menengah harus lebih siap dalam perencanaan pengeluaran. Misalnya dalam hal biaya produksi, biaya operasional, sampai gaji karyawan harus diperhitungkan dan di rencanakan secara matang, agar efisiensi tetap terjaga tanpa harus berpengaruh pada kinerja perusahaan.

Dalam mengatur manajemen keuangan sebuah bisnis sebenarnya gampang-gampang susah. Anda tidak hanya membutuhkan daftar rincian kebutuhan yang diperlukan oleh perusahaan, namun juga harus memiliki jalan alternatif atau cara khusus untuk menekan beban pengeluaran.

 

Ilustrasi acc

1. Menerapkan Metode Iklan

Iklan menjadi salah satu komponen penting dalam memperkenalkan usaha dan sekaligus menarik lebih banyak konsumen. Sebuah perusahaan ada kalanya tidak berpikir panjang bila berurusan dengan hal ini sehingga rela mengeluarkan lebih banyak biaya agar nama produk muncul di media elektronik atau media cetak koran. Jika ini dibiarkan secara terus-menerus, bukan tidak mungkin rincian biaya bisa membengkak, dan mungkin mempengaruhi kondisi kestabilan keuangan.

Anda sebenarnya bisa memanfaatkan berbagai media yang lebih murah untuk mempromosikan perusahaan tanpa harus merogoh kocek dalam-dalam, seperti memanfaatkan media sosial atau media berbasis online lainnya. Maka dengan begitu, perusahaan tetap bisa mendapatkan lebih banyak konsumen tanpa harus membuang cukup banyak uang.

2. Merencanakan Pajak

Menjadi seorang entrepreneur atau pelaku usaha tentunya berbeda dengan halnya karyawan biasa yang mendapatkan penghasilan yang telah dipotong pajak. Anda harus mulai mengurus berbagai jenis pajak terkait usaha, yang harus dibayarkan tepat pada waktunya agar tidak terkena denda. Anda dapat menekan pengeluaran dari segi pajak ini dengan memakai jasa seorang konsultan profesional. Anda dapat meminta bantuan konsultan untuk menghitung estimasi pajak yang harus dibayarkan serta menanyakan secara detail tentang beberapa trik untuk mengurangi biaya tersebut.

3. Kurangi Penggunaan Kertas

Salah satu cara efektif dalam menekan biaya pengeluaran adalah dengan mengurangi penggunaan kertas yang berlebihan. Cara alternatif lainnya dengan mengubah dokumen penting perusahaan ke dalam bentuk file. Selain tidak banyak memakan tempat juga lebih efisien dan mudah untuk mengaturnya, dengan tidak Anda sadari cara seperti ini turut mengurangi sampah, paling penting lebih sehat untuk lingkungan sekitar. Anda juga dapat memanfaatkan media penyimpanan berbasis online untuk menyimpan dokumen penting perusahaan.

4. Memperkerjakan Generasi Muda dan Pintar

Setiap perusahaan memang membutuhkan karyawan yang berpengalaman untuk menjaga kualitas dan kinerja perusahaan agar tetap maksimal juga berjalan sesuai harapan. Namun tidak ada salahnya apabila memperkerjakan pegawai yang belum mempunyai pengalaman, yang paling penting mempunyai potensi juga bersedia untuk terus belajar. Bukan hanya perusahaan Anda akan dipenuhi dengan semangat muda, namun Anda dapat lebih berhemat karena gaji karyawan kalangan menengah jauh lebih rendah dibanding kalangan profesional yang memiliki pengalaman.

5. Batasi Mempercantik Kantor

Pebisnis pemula yang baru saja merintis usaha biasanya terlalu fokus mendesain kantor sehingga rela mengeluarkan biaya lebih untuk sekadar membeli furnitur terbaru atau wallpaper. Jika Anda termasuk salah satunya, ada baiknya segera hentikan hal tersebut dan tetap fokus terhadap hal lain yang lebih penting. Sebenarnya Anda tidak memerlukan perlengkapan kantor dengan harga mahal, hanya untuk sekadar memenuhi gengsi semata karena sebenarnya kehangatan suasana dan kebersamaan dalam kantor juga turut berkontribusi memberikan kenyamanan bagi karyawan.

6. Mencoba Sistem Barter

Anda juga dapat mencoba menjalin kerjasama dengan teman, keluarga, atau rekanan profesional untuk lebih mempererat jalinan bisnis dengan menggunakan sistem barter. Contohnya, sebuah perusahaan di bidang teknologi informasi akan melakukan promosi lewat jejaring sosial sebagai ganti dari pemasangan iklan atau penyebaran brosur di berbagai tempat umum. .

7. Memaksimalkan Produk

Anda juga bisa melakukannya dengan cara memaksimalkan produk yang Anda jual, dengan mengetahui selera pasar, respon konsumen terhadap produk, serta estimasi biaya yang rela mereka keluarkan, dapat membantu Anda merancang produk maupun pelayanan dengan efisien. Rajin dalam melakukan survei terhadap pasar dapat membantu mengurangi biaya pengeluaran, karena Anda tidak perlu mencoba-coba untuk menciptakan sesuatu yang pada akhirnya gagal juga.

 

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5 Smart Money Moves in January to Start 2017 Off Right

It’s official: 2017 has arrived.

Now that the holiday sugar rush has worn off, it’s time to figure out how to turn your financial ambitions into actionable steps and keep up the motivation to make this your best year yet.

Not sure where to begin? These five money to-dos will help you start the new year on the right foot and help set you up for success for the rest of 2017, so you can stay on track to meeting your financial goals.

1. Take Stock of Your Holiday Spending

Deadline: Thursday, January 5

Whether due to last-minute gift giving or having to whip up fancy meals for an endless stream of festive dinner parties, it’s easy for a holiday budget to get thrown out the window. But rather than ignore the problem, confront the damage head-on so you can devise a payoff plan. See just how far off the mark you were, and consider what kinds of adjustments you might have to make for the next few months in order to recover. Then look ahead to how you can get started on a holiday savings plan to cover next year’s costs.

2. Assess What You Did Right Last Year

Deadline: Tuesday, January 10

You may have already set your 2017 resolutions, but it’s important to take some time to reflect on 2016 as well. Did you pay down your student loans or finally get your largest credit card balance to zero? Build up your emergency fund or save for your first home? Pause and give yourself credit for all that progress, and take note of what you had to do to accomplish those wins so you can replicate the strategies in 2017—it’ll make you that much more excited to tackle more this year.

3. File Tax Amnesty Before It’s Too Late

Deadline: Friday, March 31

With all the holiday hoopla, your mind might be anywhere but on taxes—but even if you’re self-employed, a small-business owner, or a big boss, don’t wait until the last minute to get your tax amnesty or SPT tax be paid; file your estimated payment before Ditjen Pajak is closing their door on March 31.

4. Make a Plan for Your 2017 Goals

Deadline: Saturday, January 21

Now that you’ve acknowledged everything you accomplished last year, it’s time to start mapping out how you’ll reach this year’s goals, such as breaking them down into bite-size steps. It also helps to assess what could potentially get in your way and figure out a workaround. For instance, it helps to know how your personality influences your money-management style and all the ways you could be inadvertently sabotaging your goals; after all, becoming more self aware could help you reach them faster.

5. Schedule a Family Financial Chat

Deadline: Saturday, January 28

Money isn’t a topic many people feel comfortable being open about, but talking about it can be a great way to help make sure you and your family are on the same page when it comes to financial goals. So schedule a sit-down with your spouse, kids or even a significant other—really any loved one you would share goals with—and discuss how you can support one another in sticking to both individual and shared money resolutions.

This story originally appeared on LearnVest as “Your January 2017 Financial To-Dos.

 

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15 Steps To Prepare Your Finances For 2017

How many times have you resolved to lose Rp 100.000 or go to the gym more often? Maybe it’s time to make resolutions that you can keep for a better 2017.

The start of a new year is a great time to begin an emergency fund, create a household budget or pay off debt.

Several financial planners share their tips on what resolutions and steps consumers can take today that will result in a healthy financial year in 2017.

Here are 15 steps to prepare your finances for next year:

 

credit: lirneasia

credit: lirneasia

1. Start/build an emergency fund

Wilson Moy, director of financial planning and senior trust officer at AAFMAA Wealth Management & Trust, says that the best move consumers can take is to resolve to build an emergency fund next year.

As its name suggests, an emergency fund is an account — typically a savings account — that consumers can tap to pay for life’s unexpected events, such as a broken water heater or a blown transmission on the family car.

2. Aim to save 6 to 12 months of expenses

Moy says traditionally, financial experts have recommended that consumers keep three to six months of living expenses in their emergency funds. But that might not be enough today, Moy says.

Instead, Moy recommends building an emergency account that holds six to 12 months of living expenses.

“Things change so fast today,” Moy says. “If you’re the single wage-earner for your household, what would happen if you lost your job? Three to six months might not be sufficient. Without that emergency fund, you might be forced to make big changes, such as selling your home, if you do lose your income for any period of time.”

3. Create or adjust your household budget

Drafting a budget for your household doesn’t sound like fun. But Craig Robson, senior vice president of wealth management at the Atlanta office of Merrill Lynch, says doing so is a key step in having a healthier financial year in 2017.

4. Update your monthly income in the budget

Creating a household budget isn’t overly complicated. Start by listing your monthly income. Account for any increases in salary or bonuses your employer mentioned for next year.

5. Adjust fixed monthly expenses

Then list your fixed monthly expenses, items such as your monthly mortgage payment, car payment and estimated utility bill. Note if there are any modifications in these costs, like a new addition to the family or the additional expenses of a longer commute.

6. Set aside money for other household costs

Finally, determine how much money is left over. This is money that you can earmark for entertainment, weekly groceries and eating out.

7. Put money toward financial goals

Use the remaining money to achieve your financial goals, such as saving for college or building an emergency fund.

Once you know how much money is coming into and out of your household each month, you can take steps to either reduce your expenses or boost your monthly income to meet your specific financial goals, Robson says.

“Studies show that those who create budgets are more likely to achieve their financial goals,” Robson says.

8. Target high interest debt

Kevin McCarthy, financial advisor division manager with SunTrust Investment Services, says before making any big financial moves, consumers should resolve to pay off any debts that come with high interest rates.

This usually means credit card debt, which can come with interest rates of 20 percent or higher, making it the most expensive debt you can carry.

9. Limit dependence on credit cards

Kathleen Hastings, portfolio manager with FBB Capital Partners in Bethesda, Maryland, says the biggest mistake people make is running up their debt. The best resolution you can make, then? To use your credit cards wisely.

Consider only making purchases with your cards that you can pay off in full when your bill comes due. Using your credit cards in this way is smart: You don’t have to carry loads of cash with you and you can improve your credit score by paying off your debts on time each month.

“Resolve to stay out of this kind of debt,” Hastings says. “If debt gets out of control, it’s really tough to eliminate. It compounds. It snowballs. The next thing you know, you are $30,000 or $40,000 in debt.”

10. Look into transferring debt to a low interest card

The high interest of certain credit cards make them hard to pay off debt. Some consumers may want to look at the option to transfer their balance to a low or 0 interest credit card. Though the promotional interest rate will not last, they can use this opportunity to pay down the debt. Before moving your balance, compare different cards and be aware of transfer fees.

11. Pay off credit card debt

Financial pros recommend several ways to pay off your credit card debt. Start by paying extra each month on the card that has the lowest balance. Once you pay that off, you can then take the extra cash and begin paying off the card with the next-lowest balance.

Or begin paying off the card with the highest interest rate first, no matter how small or large its balance is. Once you pay off that card, take on your credit card that has the next-highest interest rate.

12. Prepare to max out retirement savings contributions

Kevin Houser, manager partner with Allentown, Pennsylvania’s Houser & Plessl Wealth Management Group and one of the authors of “The Book on Retirement,” says resolving to maximize the contributions to your retirement plans — whether 401(k) plans or individual retirement accounts — is a step that everyone should make.

Most people know this. But they instead let emotion, such as worrying that they’ll miss those extra dollars being funneled from their paycheck to their 401(k) plan, over numerical facts dictate their decisions.

13. Raise retirement plan contributions

Instead of devoting, for example 12 percent of each paycheck to their 401(k) plan, they instead contribute only 8 percent. That ends up costing them big dollars come retirement time.

“So often, emotions drive our retirement decisions,” Houser says. “The black-and-white of the numbers is easy. People know they should contribute as much as possible to their retirement plans. The underlying shade of grey that comes in when emotions get involved is what clouds our judgment.”

To calculate how much to increase contributions to meet your goal, use a retirement savings calculator.

14. Review your insurance

If you haven’t had a chance to look over your insurance, from health to life insurance, make sure to go over costs, deductibles and other expenses for next year. For example, you may want to increase your amount of life insurance if your income is now higher.

15. Consider housing options

Are you renting when you should be buying a home or find yourself in a place that is too small? Assess your current living situation, research new housing options and calculate whether you have the finances to make a move. If not, grow a savings account to relocate or see about refinancing to lower mortgage rates.

 

This article is originally posted by Money Rates.

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How to Develop a Winning Pitch

There are so many ideas out there in the market. The reason why some survive over the others is a plain and simple case of investor money or funding. While most entrepreneurs do prepare a lot for investor meetings, they forget some basic communication rules. It doesn’t matter if you spend days and nights preparing the perfect pitch but often forget the basics in the end. Here are some rules to keep in mind when you’re faced with your investor and pitching your idea.

Image : shutterstock

 

 

Be crisp and precise

Time is money. A brilliant idea isn’t so unless it can be explained within a few minutes. Investors simply can’t afford to spend more than a few minutes on your pitch. Concise and effective speeches often impress the investors. Sometimes, entrepreneurs get into unnecessary details of the business idea forgetting the time clause. This is something to be mindful of.

Numbers matter

Investors like to see numbers. Project your finances in terms of cashflows, EBITDA, and balance sheet status within realistic numbers, and there is no way that the investor will not be impressed.  It reveals your seriousness and commitment towards the vision of the company.

Humility

While entrepreneurs should really believe in their ideas and take pride in their venture, humility is an ingredient that keeps one grounded. In the spur of the moment, it is very easy to gain a hot head if your idea is criticized. However, there could be some truth or wisdom in what the investor is saying, so receive it with an open mind. Basic etiquette should be maintained to build a long lasting relationship.

Uniqueness

You need to explain exactly what is unique and different about your offering. A run-of-the-mill product will immediately render the investor uninterested. With their sharp mind and business acumen, they can easily tell how exactly your product or offering really is. This makes it crucial to keep developing on your pitch or the idea.

Sync, align, and answer accordingly

One of the signs of a great entrepreneur is his ability to sync himself with another person’s thoughts and anticipate their moves. Even with an investor, always understand where they come from and what kind of questions they are likely to ask. Be prepared with an amazing answer which shows your abilities and talents. Investors love it when things are presented to them with absolute clarity and they don’t have the need to ask any questions.

Focus

Getting an investor’s time is really difficult. So when you do, it is vital that you respect their time. Investors judge your ability to use the funds based on the pitch you present. Translate laser sharp focus into your speech and idea. Time should be spent to understand the key components that need to be spoken about, and these core components should form the essential part of the pitch.

A winning pitch is not the one where you beg for funding, nor is it driven and flamboyance and ego. It is essential to follow the rules given above to cave a middle path. Developing a nourishing and healthy relationship with the investor is important and difficult at the same time. However, once these basic rules are followed, the job becomes easier and the battle is half won.

Source: Develop Winning Pitch

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