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Business Unplugged™
This blog features Carol Roth's tough love on business and entrepreneurship, as well as insights from Carol's community of contributors.

How to Work with International Small Businesses

Written By: Mark E. Goodman | Comments Off on How to Work with International Small Businesses

international businessIf you are a U.S.-based business, working with a non-U.S. small business can be challenging, but also rewarding.

I was working with one of my clients recently.  He has a relationship with a small technology company based in Europe.  This company had developed an excellent software product that was complementary to a software solution sold by one of the major global software suppliers.  While this company had acquired a number of customers in Europe, they were lacking U.S. distribution.  At a senior level, the company had executives who had studied in the United States, but none who had done business here.

I was working with my client on business and Internet strategies.  Internet content can be easily created and deployed on a global basis.  After a call with the company, my client and I discussed strategies that should be considered when working with a foreign company. Here are seven of them:

  1. Put it in writing.  People who speak English as a second language often read English better than they speak it.  Assuming that the discussion points need to be shared, it is better that you frame the issues, rather than depend on someone else to pass on the details the conversation.  After a conversation, follow up with agreements or action items in writing.  For key points, ask for affirmation in writing.  Sometimes people don’t like to challenge you on the phone.
  2. Repeat the important points. To ensure that a critical point is understood, you might want to repeat it in different places in the conversation.  Perhaps show it visually in addition to in writing.  Let’s say you were hoping to become the exclusive distributor in a geographic area.  At the beginning, note the distribution strategy in writing.  However, later on you might want to create a map that shows your territory in the context of a total distribution plan.  
  3. Don’t make assumptions. It is better to ask more questions than to make assumptions about business arrangements or legal structures.  Going back to our distribution example, you could have agreement on geographic territories, and then find out that your partner has taken an order directly.  When queried, the partner might say, “If the customer calls us directly, it is our customer.” Rather than throwing around terms like “exclusive distributor” or “authorized reseller,” discuss and review specific examples, and get agreement from all parties.  You might even consider a bit of role playing, or walking through specific scenarios, if it helps to make the point.  
  4. Research your contacts.  I know of a U.S. reseller who spent an hour talking about specific sales strategies to the person he thought was responsible for sales at a European company.  He later found out that the main qualification of the person he spoke with was that she spoke English.  Americans frequently like to get directly down to business.  However, it makes sense to understand who you are talking to, and why they were assigned to be on the call.  Be especially careful about assigning follow-up tasks to your phone or meeting counterpart.  Don’t press for an immediate decision unless it is urgent.  Your contact may not be authorized to make a decision, or fully comprehend what you are asking for.  Work to understand how decisions are made in the company, and who needs to be involved.
  5. Be aware of cultural differences. The same English phrase means different things in different countries. I was talking to a German business executive who has managed in both Germany and the United States. He said that in Germany if someone says “I’ll try,” it is likely that they will do it.  If they think they may not be able to execute, they will push back and explain the risk.  However, in the U.S. “I’ll try” has to be interpreted.  Does it mean that the employee is likely to complete the task?  Sometimes – but sometimes it is used as an excuse to drop the ball or miss a deadline because it isn’t a definitive “yes.”
  6. Be cognizant when using jargon or colloquialisms. When dealing with people who speak English as a second language, be careful of jargon.  I was in a meeting in Dublin, Ireland, with people from around the world.  In my attempt to get everyone to work together, I kept referring to the team as “you guys.” At the end of the meeting, one of the managers approached me and said, “Mark, I think my English is pretty good, but what does you guys mean?”  Also, watch out for sports terminology.  If you are in Russia or China, how might they interpret “Let’s make sure we score when we’re in the red zone”?
  7. Invest for the future. Understand that you need to commit to being in the relationship for the long term. While many of the people you will do business with have studied in the United States, few have actually done business here.  It will take time to help them understand the way we are used to doing business, and to be successful.

And let me share a personal story. I was in negotiation for a multimillion-dollar deal with a Japanese company.  In Japanese, the word “hai” means “I understand you” or “that is correct.”  So, I went through all of my action items looking for an affirmation. Every time I asked for something, my Japanese counterpart responded “hai.”  At the end of the conversation, I looked at him and said, “Tanaka-san, you have said ‘hai’ on every point. Does that mean that you understand – or that you agree?  His response was, “Hai.”

What I learned later was that he was there to listen and take the issues back to the home office.  I would be informed of their position later on.  However, if I had not asked the last question, it would have been easy to have walked away assuming agreement.

But here is another thing to keep in mind: there is often a lack of legal recourse if something goes wrong (i.e., good luck suing), so start slowly and build trust over time.

Your knowledge of doing business in the United States has value.  Focus on smaller companies who have been successful in their home or local markets.  Understand that you don’t necessarily need to “speak their language.”  In many ways, being you is more important.  On the other hand, showing appropriate cultural understanding and sensitivity is essential.

While it may take some time, working with a foreign company can be financially rewarding.  Once you have developed the relationships, you can expect their long-term loyalty and support.  

Can you tell us about an experience you have had?

Article written by
Mark Goodman is the President & CEO of e-Conversation Solutions. He is also past workshop chair at SCORE Chicago. Prior to founding e-Conversation, Mark held numerous positions as a technology executive, including Director of Business Development at Motorola, where he was the first business manager in the cell phone group. In addition to Motorola, Mark was an executive for a Silicon Valley company and a film buyer for General Cinema Theatres. Mark holds an MBA from Boston University and an MA in radio/TV/film from Northwestern University.