An interview with Chris Kirkland, co-founder of Tokyo Cheapo – ‘the ultimate guide to Tokyo’ – https://tokyocheapo.com.
We have some inspiring success stories of non-Japanese businesses and want to share their experiences with you.
Tell me a bit about Tokyo Cheapo.
Tokyo Cheapo is a guide to Tokyo, covering everything from where to get your hair cut to where to get kaiten zushi for 800 yen to how to get a five star hotel for half price. It’s mostly for tourists, but also for people who live here. It has been going for five years, and gets about a million page views a month, from about 450,000 people. About 80% of them are tourists, and half of them are researching a trip from outside Japan.
How long have you been in Japan?
I first came here from the UK – I’m British, by the way – 11 years ago, and stayed for a couple of years. Then I left, and came back on a temporary basis. I moved back full-time three and a half years ago.
What do you think are the areas in which foreign entrepreneurs can make money in Japan?
Most of my friends are running small businesses, and some of them are really successful. One friend runs a translation start up. Another runs an advertising agency. A lot of them came here as English teachers, but if you spend a few years here and have a bit of entrepreneurial spirit, you’ll notice that there are lots of opportunities.
Tourism is well known as one of the few areas of growth in Japan. And there’s lots of potential for web services that haven’t reached Japan yet. They say that Japan is a decade behind America when it comes to the internet.
I’ve also noticed that Japanese companies find it difficult interacting with the outside world. The level of English spoken here is quite low and the business culture is quite different. A lot of foreigners are making money by helping Japanese firms to bridge that gap.
What about importing and exporting?
Generally, it’s easier to take something out of Japan and sell it in the market you came from, because you understand the consumers better. I know several people who have built businesses exporting Japanese things. There are quite a lot of subcultures in Japan that have followings overseas, so that gives rise to quite a few options – manga, cosplay, green tea flavoured KitKats…
Importing things? Japanese consumers are difficult to reach. They’re quite different to western consumers, so you really need Japanese expertise to reach them. Unfortunately, the big Japanese trading companies have got most of the market sewn up. Maybe you could sell online, but you’d have to spend quite a lot of money to reach the consumer. If you can get to her, there’s a lot of money to be made.
Have you needed help or advice from Japanese people?
You’re going to need a lot of help and advice. We were lucky at Tokyo Cheapo because half of the business is focussed on foreigners. The other half is finding Japanese partner companies who’ll buy advertising space on the site. Partnership is really important here, so we have some Japanese staff to help with that.
If you have enough money, you can just hire Japanese people to do most of this work for you. But if you’re a small business with a limited budget and no connections in Japan, it’s going to be very difficult to set up here.
A lot of the bureaucratic procedures are quite frustrating, and quite difficult if you can’t speak Japanese. If you’re serious about your business, you’ll need English-speaking administrative lawyers to incorporate your company in Japan and a tax accountant to prepare your tax returns. You’ll need to open a bank account, which is difficult. Internet banking is typically for Internet Explorer only – and it closes outside office hours!
Does the government offer any help to foreign entrepreneurs?
I had a meeting with JETRO (Japan External Trade Organisation), the government body to help foreign investment, in London before I came here. They were nice and helpful and gave me some good advice. They offer you office space for free for your first six months, they’ll assist you getting lawyers to help you set up the business, and they have events in Tokyo educating potential entrepreneurs on how to set up a business. But they said my company was too small for them to help me. And even if you get free office space and a visa waiver for six months, most of the work you’ve got to do, the government can’t help you with.
Are the tax rates high?
I think Japanese corporation tax is fairly high, compared to the British one. Income tax is quite low, but you have to add in all the other taxes you have to pay – local government tax, health insurance and pension payments. Health insurance is a separate tax here. But there are lots of ways of reducing your tax exposure by claiming expenses.
How do you go about finding staff?s?
It’s really difficult hiring good people. Hire women! They’re Japan’s under-utilised resource – they’re smart, well-educated, but under-paid and under-respected. There’s a Japanese start up recruitment agency that’s not too expensive. It’s called Wantedly – I’d start there.
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