This post is not intended to guide you on how to set up a business in Turkey.
Instead, I have written this post as a complete plan that can help you set up a business successfully if executed properly.
Still, you’ll learn about the Turkish market, culture, legal requirements, and more.
Without further ado, let’s start planning.
Author
Co-author
This post is not intended to guide you on how to set up a business in Turkey.
Instead, I have written this post as a complete plan that can help you set up a business successfully if executed properly.
Still, you’ll learn about the Turkish market, culture, legal requirements, and more.
Without further ado, let’s start planning.
Author
Co-author
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Alp Atasoy
Sales and Business Development Consultant
When it comes to conducting market research in Turkey or any target country, it is very important to understand current trends and hidden opportunities for business growth. But it is also necessary that market researchers understand consumer behavior and key industries where investing is more profitable and lower risk. In this section, we discuss all of these factors:
The Turkish market is unique due to several factors. The market is growing steadily but still experiences fluctuations, driven by various factors. Yet, due to a young population and growing demand, there are many opportunities for businesses.
The younger population tends to buy products online and is oriented toward digital trends. They prefer a quality-versus-price approach. Some areas are ideal for starting a business, while others, such as rural and traditional regions, require a very strong strategy because consumers there prioritize price.
Although many industries have strong business potential, some sectors are currently booming, and investing in them can deliver faster results. These include technology, renewable energy, tourism, logistics, healthcare, and manufacturing.
Defining your business goals is very important and is the first step toward strong planning. This helps you select the right type of legal entity in Turkey, estimate budgets, determine time requirements, and more.
Business objectives are divided into short-term and long-term goals. Short-term objectives are those that must be achieved before establishing the business. These include registration, bank account setup, hiring staff, and generating early revenue.
Long-term objectives are equally important for a business, as they determine its future. You need to think about business expansion upfront, including when and how to scale later, branding, diversification, and building a presence in the international market.
It is very important to decide on your target audience, whether urban or rural. Each has its own challenges and benefits, and their income levels, age groups, and cultural backgrounds can differ significantly.
When thinking about customer types, consider whether they are locals or expats. Do you want to target tourists, or are your clients B2B?
All of these factors help you set better pricing for each audience. They also allow you to market your business more efficiently and achieve better conversions.
When you enter the Turkish market, you compete with two types of competitors at the same time: local competitors in your industry and global competitors operating as foreign businesses like yours.
But how do you analyze your local and global competitors?
It is not rocket science, but it does require effort. First, look at their prices and pricing models. Then, examine their market positioning and the angle they use to sell their products. Next, assess their strengths through reviews, and finally, take a deep look at their online presence.
Once you understand the Turkish local market and define your business goals, it is time to estimate the fuel needed to run the long marathon. Finance is the core area where a business can either thrive, survive, or fail. Estimating the cost of starting a business in Turkey is very important, and here is how to do it.
You need to estimate the startup costs required to launch the business. During this process, you must keep three major factors of the Turkish market in mind: inflation, currency volatility, and government imbalances. Estimate startup costs related to registration, legal services, rent, equipment, and licenses.
Do not forget to include additional costs incurred during this process. These include salaries, social security contributions, taxes, and translation services.
The Turkish government supports foreign entrepreneurs in starting businesses and has suitable laws for different business types. Although the government does not provide direct funding, it does offer incentives to businesses. In addition, you have three other funding options: self-funding, partnerships, and bank financing.
You need to think about cash flow in terms of inflows and outflows. In simple terms, this means understanding how you generate income while running the business and where you spend money to meet business needs. You must focus on survival mode, especially in the early stages.
Consider Turkey-specific risks such as payment delays and seasonality. Forecast your cash flow regularly and take steps to avoid cash gaps.
In this planning phase, you need to understand which legal entity is suitable, the procedures that must be followed, what to do if hiring is required, and which steps can lead to delays and penalties.
Remember that Turkey’s legal framework is structured and compliance-heavy. Each type of company structure has its own set of rules. Decide whether you want to register an LLC or a joint-stock company. Alternatively, it may be a good idea to open a representative office initially for market research and then register a legal entity.
An LLC requires low capital, is simple to set up, and is best for small businesses. A joint-stock company is suited for scaling businesses with investors and helps in capital raising. You need licenses to operate your business, which vary by city and sector. Highly regulated sectors such as tourism, healthcare, food, and education require special permits.
Include in your plan the types of taxes your business needs to pay. Taxes could include corporate tax, VAT, withholding tax, and social security contributions. Strict timelines and proper documentation are required when paying taxes.
Choosing the right location is very important and, in some cases, can secure your business and help it grow quickly. Remember that location impacts cost, growth, and accessibility. It is often said that for a physical business, location is key to success, while for an online business, product sourcing is critical.
When deciding between a city and a rural area, consider market size. Cities have larger markets with high populations in congested areas, but they also have downsides such as higher operational costs.
Each city has its own advantages. Istanbul is strong in finance and commerce, with high demand. Ankara has a high concentration of government offices and is close to regulatory authorities. Izmir has ports and is best suited for businesses that require exports.
When selecting a location, consider accessibility, including ports, transportation, internet, and airports. Infrastructure should support productivity and reliability.
Understand the local business ecosystem and how your business will fit into it. You will operate alongside suppliers, talent, and partners. Also, consider scale support, such as clusters, industrial zones, and tech parks.
When it comes to risk assessment, there are three key factors to consider: preparation, stability, and confidence. When discussing business risks in Turkey, the main concerns are inflation, currency fluctuations, and policy shifts.
Political changes can affect taxes and trade. New governments may implement changes in tax laws that impact investors and trade regulations. You need to plan how you will monitor these changes and remain flexible.
Competition strongly affects business and requires careful planning and significant marketing efforts. You will compete with strong local businesses and global brands in terms of product quality, pricing, customer loyalty, and marketing, which can increase costs. Remember that value preparation is crucial for survival.
To mitigate risks, diversify your suppliers. Try to establish stable current options when possible. Reserve some cash and make contracts flexible. Local partners can assist with navigation. Conduct scenario planning and perform regular reviews.
A business plan should include a roadmap, funding options, and required approvals along with the time needed. In Turkey, the focus is on realism, compliance, and adaptability, so your plan should be flexible to account for these factors.
Core sections of a business plan include the executive summary, market analysis, product details, operations, finance, and risk assessment. The financial section should account for inflation, currency fluctuations, and local costs. Keep in mind that credibility matters for investors, customers, and legal authorities.
SWOT stands for strengths, weaknesses, opportunities, and threats. These four factors can make a business stand out or appear weak. Strengths could include expertise, competitive pricing, and strong partnerships. Weaknesses might be gaps in local knowledge. Opportunities include incentives and market gaps. Threats to doing business in Turkey could include market volatility, regulations, and competition.
You should outline a timeline for each task in the plan. This timeline clearly shows the time required from registration and launch to growth. Be sure to account for potential delays and seasonality in Turkey. Milestones should include tracking and accountability measures.
Once you have your plan ready or need expert guidance in creating a strong business plan for Turkey, FMC Group offers a free 30-minute consultation call.
We have been in the Turkish market for 27 years and have been helping clients with market research, company formation, account management, and Employer of Record services.
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