Just because you are a small business doesn’t mean you can’t have a global presence. Through international partnerships you can broaden your customer base. By developing a global strategic partnership, you and other firms from different countries can work together as a team. This means pooling your resources and know-how.
First, think about your industry and if it lends itself to globalization. The best industry sectors we have seen for international partnerships, and with that I mean joint ventures, is really anything in the technology transfer arena. The tech transfer relies heavily on trust in an international partner not to steal the technology and remake it for their own benefit. We see this a lot in markets where U.S. products are not competitive in the local market (due to taxes, duties, and protectionism). Think Brazil, and the U.S. and how a company finds a partner that can make the product. We tend to see this in large scale projects like waste water treatment, or large scale industrial products like voltage panels, etc., notes Max Stewart, regional director for International Trade Development for Enterprise Florida, the State of Florida’s principal economic development organization.
While joint ventures are one way to go when setting up international partnerships, it is just one way. There are several ways to work together with other companies overseas.
So how does one know what international companies to reach out to? There are a number of ways but one of the easiest is to use a matchmaking service like the Gold Key from the U.S. Commercial Service in the market, or from the State of Florida (if we have an office in the market). We line up possible partners for a company, vet the local partner, and arrange the meeting. A few other matchmaking services internationally are the American Chamber of Commerce (AMCHAM) and the local Chambers of Commerce and Industry. The other avenue is a meeting of possible partners at a trade show and spending some time to get to know the people, offers Stewart.
While there are many positives in going global, there are certain mistakes that people make when seeking international partnerships. Among them:
–This is not America: Remember to respect the other countrys culture and that it is different than American culture. Things that are relatable in the United States, aren’t relatable elsewhere. One of the biggest is unconsciously projecting the U.S. cultural framework on a partner unfamiliar with it. The rest of the world did not grow up with inches, pogo sticks and terms like ‘reaching out’, among others, Alicia Kan, director of brand strategy for SEO consultant firm Globe Runner, points out. Be cognizant of these differences and communicate as simply as possible. What you take for granted in talking about with a co-worker could be a total mystery to a foreign company.
–Do your research and take it slow: When youre first entering a partnership, be cautious about going in too deep with a new partner. Instead, take on a pilot project with the prospective partner to see if your working styles and goals match. This pilot project strategy is really helpful because it’s relatively low risk compared to more immersive partnerships, notes Dr. Aviva Hirschfeld Legatt, College and Career Consultant, VivED Consulting LLC. The top mistake when entering into international partnerships is not doing due diligence on that partner before signing an agreement. Be especially cautious if the partner is asking for an exclusive agreement as there is higher potential for significant opportunity costs in exclusive arrangements versus nonexclusive arrangements.
–There are many upsides to international partnerships. There is a lot to gain, in many ways: A richer experience of the world. Working with international partners means coming to grips with different work practices, perhaps different work values. Learning about these expands your mind and hopefully makes you a better global citizen, Kan points out.
Another upside is that new doors and resources can be opened to your business. Adds Stewart, For the U.S. company, the upsides are new market expansion, use of local language, cost sharing of further developing products and technology.
There are some some downsides, or inconveniences that can come from international partnerships. Conference calls lengthen your working hours. It’s simple when America and Asia schedule a conference call; both parties can swap morning and evening calls, e.g. 7 a.m. Chicago/8 p.m. Hong Kong can alternate with 8 a.m. Hong Kong/7 p.m. Chicago. It gets complex if Europe participates in said call. The only decent time would be, say, 7 a.m. Chicago, 2 p.m. London and 8 p.m. Hong Kong, Kan points out.
There can also be unintended communication failures.
Unintended email misunderstandings. Many cultures write the way they speak. How Chinese people express themselves on email — pretty direct — can come across as terse and rude to Americans who normally preface requests with a pleasantry like ‘hey, how are you’, says Kan.
There are other downsides, adds Stewart, For the U.S., company downsides are the release of knowledge to an outside source, allowing someone to manufacture your product, if partnership fails losing valuable market share, and time and effort into a partnership if it dissolves before you can recoup your costs.
Take a look and see if the positives outweigh the negatives for an international partnership for you–and if they do, then go for it!