Starting a Foreign Business Series – Part 4
Hello fellow entrepreneurs!
Last week I wrote about immigration issues when starting a business in another country. This week I want to write about the challenges in finding professional services for your foreign business.
I’m sure you can imagine how critical it is to choose the right business services. I’m talking about accountants, lawyers, banks, IT, grant writers, suppliers, landlords and anybody else who provides valuable services to support your business.
I can’t overstate how important it is to be very selective and discerning when you partner with a service supplier. When you’re operating in a foreign country where you don’t know the rules and customs, you’ll need to lean on your business partners to fill in your knowledge gaps. At the same time, this scenario can also leave you in a vulnerable state where you can be taken advantage of.
Don’t be afraid to interview multiple suppliers before you make your decision. If possible, stick with large international firms that are familiar with both local laws and customs as well as your own. You may have to pay more, but it’s a lot less likely a large international accounting or law firm will take advantage of you than a small local firm who sees a gullible foreigner they can take for a ride.
When we were starting up our business in Europe, we chose a combined accounting/law firm based on the recommendation of our local business manager. This on it’s own should be a red flag. You have no idea what back room deals have occurred without your knowledge. Do your OWN research. Generally they did a reasonable job, but there were definitely some questionable things that happened due to misunderstandings and mismatched expectations. Yes, it’s true we saved money by using a small firm instead of the Ernst & Young down the street. Did the small firm have the same knowledge and resources to service a multinational business? I think not. Did it hurt our business? Probably in both tangible and intangible ways.
We definitely got burned by a grant writing firm which forgot to submit our grant on time, so we missed that opportunity. They still demanded to be paid for their work…and our business manager paid them in full! There’s a good example of a cultural difference. In North America. If you hired a company to do this same task for you and they “forgot” to submit your grants, thereby forfeiting any money you were counting on and potentially delaying your business plans by months or years, it’s highly unlikely you would pay them. In fact you might even pursue legal action against them for harming your business.
Learn to manage your expectations in a new environment until you get the lay of the land. Choosing professional services is just one of the many hurdles you’ll have to overcome to successfully get your business off the ground in a foreign country. Don’t let it discourage you, do your due diligence and choose wisely.
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Until next time,
Ernst Bergen
B.Sc. Mech. Eng.