As the crisis enters its fourth consecutive year, it is about time for investors to ask themselves: Do you really know what you want from Romania?

(Being in EXPO REAL, I already have started talking to investors about Romania. We will talk more about this tomorrow, but I think that today it makes sense to share with you my relevant article for the next edition of TAROM magazine.)

I came to Romania in January 2004 and since then I have engaged with people looking for potential investments on a daily basis, which is normal for someone involved in Real Estate, Green Energy and Liaison Services. Throughout the years, I have noticed significant changes in the way that foreign businessmen approached investment opportunities here. During my first years in the country, investors were discussing projects of which they had a reasonably good understanding, in a country that they studied for some time. However, back in 2006 – 2008 there was a serious change in people’s argumentation for an investment. Starting with the second half of 2006, thousands of new investors arrived looking for opportunities. Some of them did not have a clear idea of what exactly they wanted to do; they just knew they should invest in Romania. Others knew their business well and they were ready to invest “too much”, just to enter the market.

It is now clear that the last wave of investors since 2006 did not succeed or, at least, achieve the expected return on their investment. Looking back on it, it’s also true that the vast majority of us overvalued ourselves. Both locals and expats were under the impression that they were better than they actually were, able to achieve more than they could in reality. The bubble burst and the wide negative effects of the world economic crisis probably helped us know ourselves a bit better by thinking: Who are we and what can we really do?

Today, despite the negative international economic environment, the Romanian market evidently appears to be much more attractive than during 2009-2010. Once again thousands of investors declare their interest for almost every segment of the market. The question is: this time, do they really know what they want from Romania?

Lets be realistic, it’s your money after all. In my opinion, all of us talking about Romania, and investments in the country, should keep in mind that:

– The Romanian economy is expected to rise in the following years, but this growth is strongly associated to the fragile European and world economy.

– The market is much more “mature” than it used to be. Many segments have a very high occupancy rate.

– Romanian people are much more down to earth now compared to some years ago, having many alternative and viable choices to consider. They are not enthusiastic about “everything new that comes from abroad”.

– Since 2004, I constantly hear people saying that “the population of Bucharest will exceed 4 million residents in 5 years from now”.  Yes, this may be the case, but in 10–15 years, not earlier. The country will evolve and grow; however the progress will be slow but steady.

– Romanians adore technology, the Internet and have a constant demand for being well informed. Starting a project and neglecting: a) a budget for advertising, b) a very good and functional website and c) a very transparent approach for the client, would be the perfect recipe for very bad surprises.

– Adaptation is a must. The concept that “it worked in country X, why not in Romania too” led to a huge list of failures. You need to adjust yourselves to the local market; you are guaranteed to fail if you don’t.

– “My driver”, “my translator”, “my girl/boyfriend”, “my Romanian friend” can express their opinion, but they cannot provide you with the width and breadth of the real market pulse. Of course this changes if you speak with 1.000 of them.

Now, you might say that I am telling you something obvious, however every day I witness many investors forgetting one or many of the issues described above (applicable in every other country as well). Unfortunately sometimes people come in Romania and expect to find the country someone once described to them, after a visit in the… ’90s.

Romania is a big country, with real potential and a future that looks much better than that of many other countries. However, this does not mean that everyone can do everything, just because “they have an idea”.

Respect the country and it will pay you back. Approach it with arrogance and you will be out of business before you can say “goodbye”.