Doing Business in Italy
For the outsider, living and working in Italy is a practice in patience. Take punctuality as an example. In the U.S. one is expected to be on time for a business meeting; tardiness presumes a lack of respect and is sorely looked down upon. Such is not the case in Italy. As A. Turner Mojica, a small-business owner in Milan, knows, lateness is part of life. “In the north of Italy, people are usually around 20 minutes late; in the south its more like an hour or sometimes they won’t show up at all,” he says.
Mojica, a native of Costa Rica who grew up in Washington, D.C., came to Italy more than 11 years ago on vacation from his busy life in Manhattan, NY. Three weeks into his visit, he canceled his return plane ticket, broke his apartment lease and hasn’t looked back since. He is now the owner of The Americani, a business consulting firm and think tank.
Though he's now used to it, when he first landed in Italy, the tardiness factor bothered him. “Things take a long time here, but that’s just the way it is,” he says. “You have to dedicate a lot of time and energy to any prospect, and Italians have to build a relationship with you face-to-face, not over e-mail.”
Ashley Bartner isn’t all that different from Mojica. She and her husband, Jason, both also from Manhattan, toured the country on their honeymoon in 2006 and fell in love with its slow pace of life and scenic beauty. Within 18 months, they were setting up shop in Marche, a region about two hours south of Bologna, in the center of the country. What kind of shop, exactly? La Tavola Marche—Italian for the Marche table—an inn, cooking school and organic farm. The scene is straight out of a postcard: rolling hills, an outdoor wood-burning fireplace, an in-ground pool surrounded by terra cotta-roofed cottages, colorful flowers everywhere, and it even has chickens roaming about. By all accounts, they are living the American-in-Italy dream.
But it didn’t come easily.
For the 18 months prior to their move, the Bartners (pictured) worked tirelessly learning Italian, visiting the country, saving money and looking for the location of their dreams. When the time came to purchase a 14th century mill in the hills of Marche, the bank wouldn’t allow it. “Everything fell through, the bank thought we had more money than we actually did. [Meanwhile] our apartment was in boxes and ready to be shipped,” Ashley says.
The real problem was rooted in cultural differences. The Italian bankers hadn’t yet established a relationship with Ashley and Jason, then only 25 and 26 years old, respectively. And just like it takes time in Italy for meetings to materialize, so it does for relationships, especially those based on finances.
Without a prayer, Ashley turned to the business advisor/tax accountant who she and Jason had hired to help facilitate the process: Fabio (of course that’s his name) Centurioni. He took the frantic couple aside and suggested looking for a place to lease instead. With Centurioni’s guidance, the Bartners signed a lease less than two days later on a lovely farmhouse about 31 miles from the mill that they had originally wanted, and they're still in the same place today.
“It was so important to find someone we could trust, and that someone was Fabio,” Ashley says. “To this day, he handles all of our business dealings.”
According to Mojica, the Bartners did the right thing by paring up with an Italian they could trust. “You have to work with a commercialista, which is basically a cross between a lawyer and an accountant,” he says. “You really can’t do anything without them.”
How do you find one?
Before leaving the states, start forming relationships online with business groups in Italy, recommends Emma Bird, author of Starting a Business in Italy and the blog How to Italy. Start with LinkedIn groups, and then tap into resources at the Italy-American Chamber of Commerce.
“Once you are here, you can tap into business groups in all the major cities,” says Bird, also a U.K. expat and consultant living in Sardinia.
And while it is good to have a commercialista by your side during the registration process, Italy’s Prime Minister Mario Monti recently put into place new regulations that make it easier for persons younger than 35 to start a business. According to Bird, it used to take months for entrepreneurs (foreign and native) to register companies in Italy, thanks to institutionalized bureaucracy. Monti is now cutting through decades of frustration by allowing young business owners to launch by registering online.
“It used to cost you around €3,000 to set up a business; now Monti is allowing business owners under 35 years old to do it for just €1,” she says.
Greta Varenna, an Italian-born analyst with M31, a Santa Clara, Calif.-based business incubator for European technology companies looking to launch in Silicon Valley, is thrilled about the new regulations. “It was so time-consuming and expensive before; this is a great improvement, and I hope it brings new business to Italy,” she says.
Business cultures in Italy and the U.S. are as different as night and day, starting with the public’s view of entrepreneurship. According to Varenna, Italians are “very risk averse,” so one won’t find as many gusty entrepreneurs as they would stateside.
This can be a negative for those looking to launch a business. “It’s a little more difficult to sell an idea and get access to funding because failure has a very bad connotation in Italy,” she notes. “Fortunately, this is changing, but slowly.”
Bartner says the cultural risk aversion has a lot to do with the focus on family, generation after generation. “The bigger you dream, the farther it may take you away from home and here; most people stay at home until their mid-to-late 30s,” she notes.
Another reason for the difference: The American dream is quintessentially American. “I didn’t realize how American I was until I got here and learned that the entrepreneurial mentality just doesn’t come naturally to Italians,” Bartner says. “It is just a different mindset.”
Another difference: Italians are very formal during all business dealings. E-mails should be addressed, "Dear, Mrs.," for example, Varenna says. Also, when in a business meeting, conversation isn’t as direct as it is here in the U.S. “You don’t just get to the point,” she adds. “It takes time for people to trust and to build a relationship, so you might not talk business or money until the second or third meeting.”
Like tardiness in business meetings, Italians are also flexible in service payments, says Bird. “If you are consulting or providing services to a company, don’t expect to be paid straight away; it might take three to nine months,” she notes. “I highly recommend having money behind you before coming over to start your business so you have a nice cushion to fall back on.”
These cultural differences are pretty negative. It makes one wonder: Are there any positives to doing business in Italy?
“Ohmygosh, absolutely,” says Ashley. “It’s the quality of life. We could have easily stayed in New York City and struggled to keep up with the Jones’s, but here, even if you are living a life that is a bit rougher and a little more frustrating sometimes, it is the quality that makes it worth it."
“People stop what they are doing and take time to talk to you, to sit down for coffee, to enjoy life at a slower pace. It’s wonderful. We work twice as hard and get paid less, but we feel more fulfilled than ever before.”
Not sure what business you should start? Bird recommends tourism. “In Italy, tourism is not particularly developed, which is surprising but true,” she says. “Try owning a bed and breakfast or a tour company and you will do well.”
Ashley offers a few words of wisdom that entrepreneurs should consider before they decide to dive in. First, learn the language. It is vital in all business dealings and will show locals that you respect their culture.
Second, “Find a shark, who is Italian, willing to navigate the waters with you,” she says.
And third, just do it. “We aren’t from money; we just put our heads down and did it,” says Ashley. “It is completely doable and worth the sacrifice.”
Photo credit: Courtesy Ashley Bartner