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Doing Business Abroad

By: Sonjui L. Kumar and Kirtan Patel Email By: Sonjui L. Kumar and Kirtan Patel
October 2010
Doing Business Abroad We had lunch with a colleague this week, which brought home once again how small our business universe has become. She is an entrepreneur born and bred in California, based in Atlanta, and is now providing cross-cultural training for clients doing business in India. While many consultants are closing their doors, she has never been busier. Another client of ours travels to China every month to have her products manufactured. She is from Canada, has relocated to Atlanta and had never stepped foot in China until she needed her products produced at the right price point. Entrepreneurs like these are not a few: the number of people building their businesses in the global marketplace is on the rise. Today most large corporations are showing inordinate amounts of profits from their non-U.S. operations. BRIC (Brazil, Russia, India and China) nations have now overtaken United States as the largest importer of global goods. Clearly, today’s growth potential exists beyond our own borders. Some key tips from the successful folks who are navigating these waters daily:

1. DO get to know the country and/or the marketplace that you are entering. Talk to other businesses that are already there. Engage a local firm to help you with your most critical functions. Hire a consultant if necessary. Language, religion, gender issues and knowledge of current politics are key. You can spend the time up front or you’ll be forced to, later, when a problem arises. Go prepared.
2. DO visit early and visit often. There is no substitute for knowing your customer, vendor or employee in person. Holiday traditions, eating habits, gift giving, and office attire are just some of the many differences that cannot be appreciated or learned through Skype or Internet research. Plus, most cultures still prefer to look their partners in the eye and over a cup of coffee.
3. DO anticipate hurdles. It will be harder to do business in a foreign environment—there’s no way around it. You should expect challenges. Time differences, language barriers, cultural issues, cost of travel and learning local laws and regulations are just a few of the many trials that you will have to bear.
4. DO learn the language. Even though English is the universal language of business, it is not only smart, but also polite, to learn the language of the people you are supervising or trying to sell to. If time is a factor at least learn enough to say hello, goodbye and order a meal.
5. DO put together a multi-cultural management team. For all their talk of diversity, many organizations, especially smaller ones, tend to ignore its competitive benefits. Your team will have more life experiences to bring to the table and the different backgrounds will foster creativity.
6. DON’T criticize the hosts or the host country. Even if the locals make fun of their politicians, utilities and drivers, don’t do it. If anything, go out of your way to highlight the positives. If a street is dirty, ignore it; if it is clean, remark on it. You get the idea.
7. DON’T try and replicate everything that works for you at home in a new market. Take the advice of your local experts. Go back to Tip #1, when needed.
8. DON’T ignore the importance of relationships and contacts. These may be more important than the actual product or service that your company offers. You may find it necessary to spend most of your resources fostering those relationships than producing or selling.
9. DON’T invest all at once. This applies to any business venture but test marketing is even more critical when venturing into new territories.
10. DON’T expect time to be important. Deadlines and schedules are not as valued outside the United States. Plan on meetings starting late and running over.

The truth is that the world has never been smaller. Even if the country you are doing business in happens to be your motherland, things have changed since you or your parents left.   Plan well and success will surely follow.

[Sonjui L. Kumar is a founding member and partner in Kumar Pathak, LLC. Her areas of practice include general corporate law, complex commercial transactions, and trust and estate planning. Kirtan Patel is a managing member of Kumar Pathak, LLC, with focus on complex real estate matters, real estate finance, general corporate law, and international transactions. Mr. Patel specializes in representation of clients in the hospitality industry.]

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