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Start-ups: How to do business like the Swiss

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Start-ups: How to do business like the Swiss
File photo: Fabrice Coffrini/AFP
11:21 CEST+02:00
Looking to start a business in Switzerland? An American expat talks to The Local about the challenges and rewards of being an entrepreneur in Switzerland.
Every expat has plenty to learn about their adopted home. This is doubly true when also starting a business in a new country. And when that country is Switzerland with its many rules and regulations on the federal, cantonal and communal levels, launching a start-up can be daunting for a newcomer.
 
Or inspiring. Maybe so much so that an entrepreneur might even develop their business around the idea of “Swissness”.
 
“The Swiss are very proud, and rightfully so, of their independent-mindedness,” says US and naturalized Swiss citizen Jonathan Clay, who showed some of that himself when he started his consultancy business. 
 
He believes that two cornerstones of Swiss government –  decentralized institutions and direct democracy – are “very applicable to business as well”. 
 
One reason why the Swiss economy has been so stable for so long, Clay tells The Local, is because there’s “strong faith that companies are run with a proper balance between the profit motive and the desire to do what is right for all stakeholders: not only owners and managers, but also employees, communities and the environment”.
 
Born and raised in upstate New York, Clay is a graduate of the vaunted Massachusetts Institute of Technology, and of La Salle University, where he earned an MBA. As a business strategy and technology consultant in the US, this self-confessed “start-up junkie”, founded three tech companies there.
 
Since coming to join his Swiss girlfriend – now his wife – in Zurich in 2002, Clay has schooled himself on Swiss business practices. In January, with a handful of colleagues, he launched his consultancy firm. An unabashed believer in the Swiss way of governing and doing business, Clay has made it key to his company’s identity. His firm’s name: Swiss Approach
 
“What it boils down to is pride of craftsmanship: quality, precision, reliability,” he says.
 
No, Swiss Approach doesn’t make watches; it offers strategic solutions to businesses – information systems, processes, people, communications. 
 
They emphasize they are a “values-based” company. “We believe strongly in being responsible corporate citizens, and taking accountability for the long term impact of everything we do, good and bad,” says Clay.
 
Swiss Approach advises clients to value “fair working conditions, minimizing carbon footprint, and giving back to the communities in which they operate”. This is all part of “Swissness”, he says.
 

Jonathan Clay schooled himself on Swiss business practices on moving to Switzerland. Photo: Jonathan Clay
 
In terms of setting up a business here, “Switzerland is in general very business-friendly,” he says. “The process of getting the company up and running took a bit longer than what I've experienced in the US, but overall it went smoothly.” 
 
He advises any entrepreneur to be ready with plenty of capital. To qualify as an AG (public limited company) Swiss Approach had to have a minimum of CHF100,000 ($103,000) in capital. “This is a lot of money for someone who has little more than an idea,” he says. 
 
“I would like to see Switzerland consider a new form of business, like ‘GmbH (limited liability company) Lite’, where the founder has limited liability, but can get up and running quickly and with minimal capital.”
 
Clay says he made a few missteps during the start-up phase because he didn’t fully understand the nuances of Swiss business regulations. Everything got worked out eventually but only after accountant and lawyer fees “cost some of our precious startup money”.
 
Nevertheless, he says, in Switzerland, if you’ve done your due diligence, “for the most part, the government stays out of the way, and one gets the sense that they are your friend rather than your enemy – though I may change my mind on this if we ever get audited!”
 
Needless to say, any company in Switzerland needs to be multilingual. Swiss Approach does business primarily in English because they are pursuing clients globally, but the five core team members have lived and worked around the globe and between them can also do business in German, French, Italian, Portuguese and Russian. 
 
Beyond language, expats need to learn the subtle cultural customs that can close (or kill) a deal. What’s appropriate business attire? Do you shake hands or bow? When, if ever, may clients be called by their first name? And most importantly, what are the business values respected in this unfamiliar land?
 
“I normally only wear a tie for weddings and funerals,” says Clay, who favors jeans and “business casual”. But clients are always addressed by their last names unless he’s invited to do otherwise.
 
What’s most important is values, says Clay. “Part of the Swiss story is a belief in the idea that people will generally do the right thing if they are given a clear set of guiding principles and rules.”
 
 
Jonathan Clay’s five top tips for expat entrepreneurs in Switzerland
 
1. Think carefully about what it is you have to offer, what it will take to produce it, and who will pay for it. For example, if you want to offer low-cost outsourced IT services, or manufacture millions of gizmos, Switzerland is probably not the best place for your company, due to high salary requirements. But if your products or services require a high level of expertise, or are targeted more toward a premium market segment, you will be able to build a profitable and sustainable business that leverages the strengths of Switzerland.
 
2. Be willing to spend money on expert help, particularly if you have difficulties with the language. If you organize your business the wrong way or don't get the accounting or legalities correct, the problems will not simply go away, and they will become more difficult and expensive to rectify as time goes on.
 
3. Make sure you understand what it means to employ someone. It is a contractual relationship that is taken very seriously compared to some other countries. Know what the long-term implications and risks are.
 
4. Expect to hit some walls. Not everyone will want to work with you, but don't assume that it's because you're "not from here". It's probably just not a good fit or the right timing. Keep trying.
 
5. Don't expect to walk into a bank and leave a few minutes later with a business account. Despite what may have happened in the past, Swiss banks are very serious about KYC (know your customer), and do a significant amount of due diligence on business plans and sources of funding. This is a good thing, but can take some time.
 
By Bill Harby

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