An introductory guide to doing business abroad.
Your company’s about to make its entrance onto the international scene – it’s a big, treacherous step, and, absolutely fabulous! Expanding the scope of your business beyond our borders, whether importing or exporting, is as mind broadening as it is exhilarating, but it’s also full of trap-doors. So, how do you know where to step?
4 tips for doing business overseas (and over borders)
- Know thyself. Take a good honest look in the mirror: are your goals and expectations realistic? Are you prepared to be a newbie in a pool of veterans? The companies you’ll be conducting business with will most likely have been doing business with Germany, Japan, France, etc., for decades – they’ll expect you to be on top of your game. Assess your strengths and weaknesses with upper management and your legal counsel, so you march in confident and ready to roll with the punches.
- Know thy market. Unfortunately, products that sell in the United States don’t always fare so well in other cultures. It’s important to consider everything from packaging to colors, and identify how those things might be perceived differently in your target country. Also, bring yourself up to speed with how cultural customs affect economics – for instance, business in China comes to a standstill during their New Year celebrations.
- Know thy partners. The partners you choose to work with can make or break your business venture. They are going to be your “boots on the ground,” and you’ll want to ensure they are as committed to your success and growth as you are. In addition to getting to know the potential partners personally, you should also do due dilligence through database research or an investigative firm. If it’s at all possible, select more than one to work with, at least initially, because that direct experience will help you determine if they’re all they claim to be.
- On joint ventures. One of the many things you’ll need to discuss with your attorney is doing business in jurisdictions that require foreign companies to team up with a local company in order to enter their market. While there are obvious benefits – local market knowledge and experience – these relationships tend to be short-lived and often result in the foreign company taking over the endeavor.
Forming your alliance
In today’s global economy, doing business overseas and with foreign companies is almost a mandate, particuarly in the hospitality and manufaturing industries. In order to ensure it goes as smoothly as it can, do your homework, consult with the experts, and be willing to learn and adapt as you go.