Growing businesses often consider expanding globally. But how do you know when it’s time to turn thought into action by taking those first few steps toward global expansion? Perhaps you’ve got the U.S. market in your back pocket and are looking to ride that momentum into new territory, or your company’s growth has stalled and you need to go further afield for new business. Before you take the leap, you may want to assess your existing resources, thoroughly research demand in the market you’re considering, and be fully apprised of the laws and regulations that govern foreign trade.
Even the most meticulously crafted global business plan can run aground if you don’t pay close attention to the social and cultural elements of doing business on foreign soil. I spoke to a few U.S. entrepreneurs who operate globally for some advice on the subtleties.
Adjust your pace.
“Rule number-one in terms of protocol is take it slowly,” says Laurel Delaney, CEO of GlobeTrade, a marketing and management consulting company that helps small businesses expand abroad.
Americans, Delaney points out, have a reputation for being too aggressive and for having a “just get it done” mentality. “You have to be far more sensitive to the idea that the relationship comes first, not the deal,” she says. “And that’s across the board in any part of the world. Focus 80 percent on the relationship and 20 percent on the deal, and you [may] be extremely successful.”
—Laurel Delaney, CEO of GlobeTrade
That can require time, patience and an understanding of how long it can take to get deals done in particular countries. For instance, Delaney says, “People tend to freak out when they don’t hear from a party within 24 hours. But in countries like Japan, it may take two weeks, because everything is consensus based.”
Speak the language.
It may be easiest to do business in a country where you speak the language fluently. But when you’re compelled to reach out further afield, you may need to pay special attention to how you communicate. John Wilkinson, chief of operations for Wishbox, an e-commerce site that helps small U.S.-based manufacturers export their goods, claims he always tries to communicate in the local language when first contacting a new business prospect.
“I use Google Translate over email,” Wilkinson says. “They seem to appreciate that you’re trying to communicate in their language.”
He also always includes “Please forgive errors, I’m using Google Translate” in his signature. But while Google Translate or similar apps may work to get a new prospect’s attention, if the relationship progresses, you might consider moving to a professional translation service.
Respect different styles of communication.
Just because you speak the same language doesn’t mean you communicate in the same way. Jaspar Weir, a co-founder of TaskUs, has five call centers in the Philippines for his customer service outsourcing company. “It’s the number-one location in the world for business process outsourcing and call centers,” he says. “There’s a real focus on service and very prevalent English.”
TaskUs has call centers in the Philippines.
Because there’s such an affinity for Western culture, it’s easy to forget that there are cultural differences. “There’s a culture around saving face,” Weir says. “People don’t want to tell you no.”
With employees, he claims, he’s learned to ask open-ended questions such as, “Can you repeat to me what we discussed you’re going to do?” instead of asking questions that can be answered “yes” or “no.”
Weir also thinks that bringing a bit of Western business culture to the Philippines gives him a competitive edge. While his competitors run command and control shops where employees can’t access social media, TaskUs is more flexible, offering happy hours and dance competitions and thus attracting younger, ambitious college grads.
Be aware of hierarchy.
Many U.S. entrepreneurs may think of their companies as non-hierarchical; they can value workplaces that treat all employees equally, from support staff to top execs. In some countries, particularly in Asia, it may not be quite the same.
In China, according to Kyle Vucko, a co-founder of custom suit maker Indochino, “hierarchy is very important. You should always first acknowledge the owner of the business and comment on his accomplishments.”
Pro tip: Present your business card with both hands and a slight bow.
Vucko suggests that if a business owner is serious about creating a relationship, he or she will make the time to show you around personally (getting passed on to a less senior employee is probably not a good sign). “If things are going well, the meeting will progress to meal, that meal will be very lengthy and, if you’re a CEO, you’ll sit next to a boss,” Vucko says.
Go where your resources lead you.
While you may not have the language or cultural knowledge needed to successfully do business abroad, you may have a hidden asset on your staff. Shortly after Alexander Shashou and his co-founders started Alice, they began thinking about where they might best recruit developers for their hotel management software company. Co-founder and CTO Dmitry Koltunov is Ukrainian, so the startup team didn’t need to look far.
The company now has eight software developers in Kiev. “It works because of Dmitry,” Shashou says. “I don’t think it would work if we were in India.”
The company flies its Ukrainian employees to its Manhattan headquarters once a year so they can meet and get to know the U.S. team.
“We also travel a lot,” says Weir, “and we’ve put money into setting up our New York offices with videoconferencing software and microphones so it carries well.”
To learn more about doing business in specific countries and for information about exporting, check out the U.S. government’s Export.gov. And while you should be aware of common customs and practices in different countries, John Wilkinson at Wishbox cautions against making generalized assumptions.
“Everyone is an individual,” Wilkinson says. “At the end of the day, it’s all about two businesses developing a relationship based on their personalities and common interests.”