Doing international business is exciting and fraught with interesting challenges. Here I share some of the essential things that I have learned along the way and in some cases the hard way to successfully do business in Asia!
1. Understand the People
You have to understand the people that you are dealing with, their motivation and business culture.
This is basic stuff. The thing about doing business in Asia is there is a story that they tell you and there is another story that they do not tell you.
It is the other story that they do not tell you which is more important. This is something you have to uncover as you go.
With business culture, when in Rome you do what the Romans do. Basically, you have to be willing to do business the way the locals do business in Asia. If you are not willing to do this then you are just wasting your time.
2. Trust is Paramount
Developing trust from both sides is extremely important. People will only do business with people they trust.
However, regardless of the level of trust that you have established you must always keep front of mind how to mitigate risk particularly with regards to your personal safety and money.
3. Be Flexible When Making The Deal
Be flexible in structuring the deal. The way you structure the deal at home may be completely different to the way you structure the deal in Asia.
The main thing to remember is to be flexible in the way you approach a deal as long as the deal is within your mandate and it is legal.
4. Always Have A Contract
Always have a contract even if you are dealing with a relative or a close friend. And even if you are dealing with your long lost grandmother, you should still have a contract.
Contract negotiations is often the most painful part of the process but once it is in place you can put it in the drawer and get on with the business. In any business deal, there are always risks. Doing business in Asia is no different.
The main thing is to minimise those risks. Your contract will at least provide you with a basis to minimise those risks if ever disagreements or a black swan event arises.
Note that in Asia, a contract is never final. Think of it more as a working document.
5. Be Mindful of “Gotta Finish Gotta Go Home” Mentality
Be aware of the “gotta finish gotta go home” mindset particularly its impact on your decision making. There is always pressure for you to perform. You have invested a lot of money, time and effort in this deal so you are under the pump to make it happen. You have to show results. Right!
Thing is, in Asia they operate on a different time frame. What might take you one month to do at home will probably take twelve months plus in Asia. The people you are dealing with do not care if you are only in town for two weeks and under pressure to show tangible results to your boss when you get home.
All your counterpart cares about is what they will get out of the deal. If they do not get it today, they are happy to go home to their family and start again the next day.
The main thing to remember is to recognise the “gotta finish gotta go home” mindset and make sure this does not affect the quality of your decision making and thus, the quality of your deal.
6. International Business is a Long Term Game
In doing business in Asia, you must be willing to invest for the long term. If you want short term then I suggest that you stay at home.
At the earliest, you might get lucky and get a result in one year. For most, you will be looking at a 3-5 year window.
One of the biggest projects that I did which was worth $250 million took more than four years just to get it to the signed contract stage and involved traveling overseas almost every two weeks.
7. Referral is King
In Asia, referral is King. And the higher up the referring person is, the better. Trust is very important in doing business in Asia.
By getting a referral from somebody high up you are basically short circuiting the trust building process.
Just make sure though that you deliver on whatever you promise. If you fail to deliver, the person who referred you will also lose face. Not just you. This is something you should avoid at all cost.
8. Always Have A Back Up Team
If you can, have a local team behind you consisting of a trusted local confidante, a lawyer, an accountant and a contact from your country’s foreign and trade office.
It is always good to have somebody you can talk to just in case you encounter some challenges along the way.
9. Get Travel Insurance
When the s**t hits the fan, who are you going to call?
With the global geopolitical situation, the prevalence of threats and random terrorism acts and natural disasters including in Australia, international business risk management is now as critical as ever.
As a business, risk mitigation and ensuring that you have the necessary insurance cover is now more essential than ever.
Here is the low down when it comes to travel insurance and terrorism.
The bad news is most travel insurance policies do not cover terrorist related activities. So I suggest that you have a very good look at your travel insurance company’s Product Disclosure Statement (PDS) and/or seek professional advice from a licensed insurance specialist on your business requirements.
There is another important catch when it comes to travel insurance. Regardless of the level of cover, all of them will deny your claim if you travel to a country with a DFAT Level 3 or Level 4 advisory and experience a terrorist event.
This is because most insurance companies consider the risk is too high for them to give you any cover in countries at Level 3 or 4.
Please consult a professional licensed insurance broker. The above is for general information only and is not an official advice.
Hope this article helps in some way in your international business journey. Would love to hear what you think?
About the Author
Robert Leroux heads iSapience – a B2B & B2C Lead Generation, Business Process Outsourcing and International Business Consulting Company. Since 2000, he has helped numerous Australian and international clients across many industries including: IT, Digital, Retail, FMCG, Advertising, Wholesale, Distribution and Logistics, Gaming, International Trade, Infrastructure and Governments.