The Strategy – Shrink to Grow

March 23, 2020
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Shrink to Grow the accurate oxymoron - WFOE in China | PTL Group

The Coronavirus crisis is provoking a significant slowdown, while it is shaking international markets. Businesses around the globe are seeking feasible solutions to navigate the rocky terrain ahead, overcome the crisis and prepare for future growth. China is already showing signs of recovery, and despite it being the origin that the virus stemmed from, it should be the first place to analyze, when crafting the day-after plans.

Especially during times of crisis, a lot can be done. The forced halt from the never-ending race from deal to deal, allows us to reevaluate our business model in China. We are all intending to minimize costs during this slowdown, but reducing cost is merely one aspect. Maintaining the business well balanced, efficient, stable, and closely monitored, is equally as important.

PTL Group’s clients keep their operation and maintain their competitiveness in China, even during the Coronavirus epidemic, mostly thanks to the platforms we provide them with. Those allow them to both lower their expenditures and minimize risks whilst remaining active in the Chinese market. By outsourcing key areas of the China-based operation, many international businesses that employ a WFOE structure in China are now able to concentrate on their core business activity.

Through this business strategy, WFOEs utilize their resources and at the same time cut office and labor costs, focusing on growing their business in China. These business entities employ local sales teams that benefit from PTL Group’s financial, logistical, administrative and HR services, with our support team always at an arms reach, instead of maintaining expensive in-house operations.


learn more about WFOE registration in China,
and about operational support for registered entities in China


Cost-saving is not the only contribution WFOEs can benefit from in this model. By partnering with PTL Group, they also experience risk management and enhanced control, as our staff report directly to the WFOE owners and implement ownership policies with maximum transparency.

Adapting operational management structures to a more lean and pragmatic business model in China, enables smart strategies to turn into a beneficial reality.

The results leave no room for doubt:

After streamlining processes by using PTL Group’s platforms, our clients’ business activities in China remain stable and virtually unchanged, while their operational costs drop substantially.

Some of our clients have managed to cut up to 75% in operational costs within a two-year timeframe.

Shrink to Grow - the accurate oxymoron - WFOE in China - PTL

So, where do you start?

The first step could be an operational audit of your local entity in China, conducted to identify where you could cut costs and improve procedures. An operational audit carried out by a third party will reveal all the risk factors and inefficiencies present in your China operation.

An independent third party will provide you with an objective evaluation of which facilities can be reduced, which functions can be merged or outsourced to other service providers and which suppliers can be replaced. An outside auditor can support the local GM in making tough decisions aimed at making the business stronger and healthier.

The current circumstances in both China and the wider world, have left a large number of firms struggling to keep afloat. Perhaps now more than ever, it is essential to optimize operations.

If you’re faced with any obstacles in your business activities in China then please contact usIn these challenging times, it is important to both prepare your business for the worst but hope for the best. At PTL Group, we help nurture and secure a business’s operational roots in the Chinese market so that in the future it may rest in the safety of shade.

 

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