Question Time with Mentor John – Taking your business global

Question Time with Mentor John – Taking your business global

This article was first published on Business Times on 18 August 2018

Question Time with Mentor John – Taking your business global

In small markets like Singapore, businesses need to think of taking their business global from day one. Expanding into international markets is never easy. Businesses face challenges like dependable shipping, reliable distribution, talent that is focused on their business, not the other fellow’s, and understanding global markets. Mentor John answers some of your questions in the quest for global domination!

What are the best practices for taking my business overseas?

Your first steps will likely be on a trial basis. Keeping costs to a minimum at this stage should not preclude you from doing as much research as you can into the potential market. At the very least, you and a posse of you colleagues should explore the market personally to see what is on offer that competes with you and what the cultural norms are that will affect your sales. You should also search for a potential importer and (possibly the same person or company) representative to oversee things on the ground. How you work with ‘your man or woman’ in the market will depend on local customs. See what adaptations you need to make to the product or service itself, to the warranties attached to its use and to the payment methods or guarantees to be employed. Whatever else you do at this stage, do not under-price your product. If it is a commodity-type product the market will dictate pricing to some extent. However, failure to establish adequate margins now will lead to losses and pain later.

SIngapore brands are generally well regarded overseas. The endorsement of Singapore carries with it the expectation that performance will be high. Whatever you do ensure that in local terms your performance matches expectations. Especially in food and beverage, different cultures can make what is epicurean in one country cat food in another. It is also important to know how your name fits the culture of the country. Words that spin attention in one language may not do so in another.

I’m considering establishing partnerships with distributors and resellers in order to bring my product to international territories quickly. However, this strategy has challenges too. How do I find a good partner and what do I need to be wary about?

First assess how well you judge people. What is you record in doing so? Which of the people you have trusted have stayed loyal and committed; which have not? Do not assume that because you have made a success of a business in one country you can judge a suitable partner in another. Get help when you need it. Your business partner is as important as your significant other partner. If you anticipate substantial sales, do not appoint a partner in another country and leave them alone to get on with it. If they are smart, they will probably steal the market once they have built it. If they are not smart, they probably won’t build the market. Do not appoint someone just because s/he is a friend. Even when you have the partner from paradise, send your closest business partner to work with them on equal terms as your newfound ally. Quality control is a pair of eyes.

The obvious criteria for a good distributorship or local partner include familiarity with the market, local influence, excellent network of professionals and artisans. Above all, character of the highest sort is a prerequisite.

My startup expanded quickly, setting up local offices as we ventured into new territories. Each office runs independently and the company is now a mishmash of cultures and business processes. Is this a problem, as long as profits continue? If so, how do I streamline operations better?

Fast growth can mask several problems that only appear later. A rapidly expanding business cannot hope to make 100% perfect choices of people. The business will be infiltrated by spies, possibly by disruptive elements, occasionally by thieves. You ask about streamlining a mish-mash of cultures. Don’t even think it. Make each unit work to be efficient in the environment or culture of the country in which it operates. Consolidating them financially is a job for your accountants but do not set up the business to accommodate accountants. Do not try to make one culture work as though it is another. Two hundred years ago you could do that, not today. Streamlining sounds great. However, it often involves marshalling people in a way that actually reduces their efficiency.

A bulk of my company’s intellectual property exists as proprietary know-how, which is hard to protect. How do I manage this IP as I expand internationally?

Review your IP registrations – boring but necessary. Register your products where you can. Be aware of the countries where IP is ritually stolen – they are well known. Accept that relatively soon much IP will become untenable if not actually illegal in some places. If you own IP that is ahead of the field, realise that you cannot really protect it for long. Behave as though you were a franchisor, someone who has to keep investing in a high level of R&D in order to maintain your lead. If you see an end to development, consider selling your business.

Continuity of successful business overseas is possible but you must pay attention to it. Visit the territories without warning from time to time. Be affable, jolly and perceptive. What they don’t tell you is probably more important than what they do. Be encouraging. It is the source of success.