From over 25 years of training exporters at FITT, we know that finding partners is one of the biggest challenges businesses face when entering new international markets.
We know that for many businesses, particularly SMEs, not knowing how to successfully enter a global market is also the number one reason international growth opportunities are left unexplored.
So, we decided to address this issue in an interactive way. As we do every month, we took to Twitter for a live chat and brought together a panel of market entry experts from across Canada and the world. We asked the experts all about finding the right partners, from researching the best prospects to negotiating the contract.
Check out the chat recap below to gain their insights and share your thoughts, questions and concerns in the comments below.
Panelists:
Varun Anthony, CITP – International Trade Specialist based in Mumbai, India (@VarunAnthony)
Samantha Caldwell, CITP – Associate, Global Trade, EDC (@sg_caldwell) based in Ottawa
Bernadette Fernandes – Official Country Representative, Canada, Africa Trade & Investment Global Summit (@on_the_varanda) based in New Brunswick
Matthew LaRiviere – Project Manager, Marketing, Canadian Commercial Corporation (@Matt_Rivs) based in Ottawa
Robin MacNab – {Retired} Trade Commissioner, GAC (@RobinMacNab) based in Waterloo
Siddha Param, (@siddhaparam), Consultant, author and speaker with Strandridge.com based out of Winnipeg
Here’s a good place to start. Why should businesses consider forming a strategic alliance with a business partner in their target international market?
A1. Finding a strategic partner is the core to succes in a new market. Whether you are looking at a market for the short or long term you need that on ground partner who knows the regulations, has a strong distribution network, is already established (1/2)
— Varun Anthony (@Varunanthony) April 26, 2018
A1: SMEs can save time and $$ by utilizing a partner already in market #tradeelite
— Samantha Caldwell (@sg_caldwell) April 26, 2018
A1: Complimentary needs, look for joint ventures or partnerships to fill in your weak spots. #tradeelite
— Matthew Larivière ?? (@Matt_Rivs) April 26, 2018
A1: A partner understands the local way of doing business, can provide insights and should know the “right” people. #TradeElite https://t.co/ocBNlTysgh
— Robin MacNab (@RobinMacNab) April 26, 2018
A1: Strategic alliances with the RIGHT business partner: crucial when entering new global markets where you don’t otherwise “know the ropes”, cross-cultural communications, buyer preferences, concerns that @ExportDevCanada can help mitigate @varandanetwork @TCS_SDC #tradeElite https://t.co/iY1bdqETzZ
— bernadette fernandes (@on_the_varanda) April 26, 2018
Strategic partners can have local knowledge, help in reaching industry counterparts, manage shipment within a region #CETA #NAFTA #CPTTP and ability to analyze local trends
— Siddha Param (@siddhaparam) April 26, 2018
Ok now that we know why we need partners – What types of business partners can help businesses succeed in new global markets?
A2 #TradeElite : the best type of partners are businesses in the sector in which exporters are through a strong joint venture, an distribution house, a well established and licensed importer, appointment of an incountry representative who is plugged into the markets DNA (1/2)
— Varun Anthony (@Varunanthony) April 26, 2018
A2 #TradeElite : as you begin to scout for the ideal partner watch out for those fly by night operators who promise you the world of success. It is here that many exporters burn their fingers blindly trusting the words and promises of potential partners (2/2)
— Varun Anthony (@Varunanthony) April 26, 2018
A2: Look upstream and downstream from your product or service, you may have ideal joint venture partners in either direction. #tradeelite
— Matthew Larivière ?? (@Matt_Rivs) April 26, 2018
A2: There are a wide variety: licensing, joint venture, rep/agent, or distributor. Do you require after sales service? #TradeElite https://t.co/ukNUx5Xf1l
— Robin MacNab (@RobinMacNab) April 26, 2018
Searching for potential business partners can be time consuming and costly. How can small businesses find the right partners with more limited capacity?
A3: Canada’s Trade Commissioner Service can provide useful advice on finding the right partner and can facilitate introductions https://t.co/t0AySZ4vtM #TradeElite https://t.co/YgjlnIGbky
— Robin MacNab (@RobinMacNab) April 26, 2018
Q3 #TradeElite : A new exporter/businesses eyes and ears in the global market are their respective country’s trade commissions/embassies/high commissions/consulates. These are your most trusted and one stop shop for understanding the DNA of the country/market you looking at (1/2)
— Varun Anthony (@Varunanthony) April 26, 2018
A3: @VarandaNetwork suggests starting with your local provincial #TradeOffice who already has business relationships/partnerships in global markets you can leverage and save on time. They also offer funding programs to help with costs #TradeElite https://t.co/2ErCoAWikT
— bernadette fernandes (@on_the_varanda) April 26, 2018
A3: I would add, another way of finding partners is Social Media. Do not be shy to communicate what you are doing, have done and plan to do next. #tradeelite
— Matthew Larivière ?? (@Matt_Rivs) April 26, 2018
Which is why we should always be keeping an eye out for great opportunities like these #tradeelite chats! 😉 @VarandaNetwork https://t.co/RFT2hqWnaJ
— bernadette fernandes (@on_the_varanda) April 26, 2018
What characteristics should you look for in a “good” international business partner?
A reliable partner with the capacity and willingness to deliver on a agreement is vital
— Siddha Param (@siddhaparam) April 26, 2018
Q4 #TradeElite 1/2: Look for a partner who is willing to stand with you for the long run. True success can be achieved when you look at a global market for the long-run. A partner who has a strong network in the sector you wish to enter, is able to advice you on the challenges,
— Varun Anthony (@Varunanthony) April 26, 2018
A4 #TradeElite : Most importantly choose & look out for a partner who has the strongest business ethics & doesn’t use the backdoor or under the table approach to move around the market. Especially when you look at developing markets. No speed money, no bribes – #Keepitclean
— Varun Anthony (@Varunanthony) April 26, 2018
A4: Look for well-respected partners in global markets, such as Canada’s @TCS_SDC & @ExportDevCanada; if they don’t have the business relationships you need for #Trade, they’ll introduce you to their trusted partner network, both abroad & in Canada #TradeElite @VarandaNetwork https://t.co/UhsvYL31wB
— bernadette fernandes (@on_the_varanda) April 26, 2018
On the flip side – what are some red flags that a potential partner is NOT a good fit for your business?
A5: conduct your due diligence so you don’t have any surprises! be especially careful re corruption #tradeelite
— Samantha Caldwell (@sg_caldwell) April 26, 2018
Unwillingness to discuss challenges and barriers openly, not keeping to agreed terms and timelines
— Siddha Param (@siddhaparam) April 26, 2018
A5 #TradeElite : My biggest red flag is when a partner has an easy solution to the most complex market entry issue. In all probability that partner is using the quick way out strategy & is not being honest. All market entry strategies are filled with hurdles which take time (1/2)
— Varun Anthony (@Varunanthony) April 26, 2018
A5 #TradeElite 2/2: to overcome but surely can be overcome by using the right strategy laid out by the regulators of that country. Conduct your due diligence yet again using the trade commission of your country as they are the most valid source of information your eyes & ears.
— Varun Anthony (@Varunanthony) April 26, 2018
A5: Beware “puffery” like “I am the President’s cousin”, or “the President was my roommate at college”! #TradeElite https://t.co/yBawYYifwI
— Robin MacNab (@RobinMacNab) April 26, 2018
A5: a “partner” who is one-sided & does not take the time to look for reciprocal value for both sides is NOT a partner or a good fit; a partner who isn’t accessible or doesn’t understand your #valueprop or differentiator, NOT a good fit #TradeElite @VarandaNetwork https://t.co/tMMhJORzwr
— bernadette fernandes (@on_the_varanda) April 26, 2018
Once you find a partner who is a good fit for your business venture, what can you do to secure the partnership?
A6: work with legal counsel to write a contract for your new partnership and to protect your company and products. don’t forget to incorporate an exit strategy #tradeelite
— Samantha Caldwell (@sg_caldwell) April 26, 2018
A6 #TradeElite : Keep the trade commissions appraised of your activity in market. They are your eyes and ears on ground. The more you are plugged in to the market when you secure a partner the more you will succeed. It is a relationship – nurture it step by step and constantly.
— Varun Anthony (@Varunanthony) April 26, 2018
A6: Visit them. Invite them to your place of business. Offer coaching/training for their staff. #TradeElite https://t.co/RnbKNWkYwq
— Robin MacNab (@RobinMacNab) April 26, 2018
Do you have any tips and advice for getting the most out of partnership negotiations? Anything to watch out for?
For each agreed term get evidence of capacity to deliver. Do a SWOT analysis of the relationship and a PEST analysis of the country. Explore opportunities in neighbouring countries for comparison.
— Siddha Param (@siddhaparam) April 26, 2018
A7: Be honest about your own weaknesses and gaps and don’t be afraid to trust your gut. If your instincts tell you that something isn’t right, even when everything looks good, it’s smart to be cautious. #TradeElite
— Matthew Larivière ?? (@Matt_Rivs) April 26, 2018
A7 #TradeElite 1/2: To the get the most out of the partnership – stay plugged in, don’t just sign the partnership and walk away, look at the market for the long run, keep your trade commissions appraised, constantly engage with the end consumer, keep those transactions clean.
— Varun Anthony (@Varunanthony) April 26, 2018
A7 #TradeElite 2/2: BE PATIENT when you are entering a new market. Don’t expect to be a market leader in the first few years especially if it is a developing market. Be ready to face the challenges and make it clear to you partner that you face them in a clean and ethical way.
— Varun Anthony (@Varunanthony) April 26, 2018
A7: Check in with the trade reps at your country’s embassy in country X who can warn you of pitfalls, and introduce you to local experts. Link to Canadian reps https://t.co/t0AySZ4vtM #TradeElite https://t.co/uKq5AQ9ysr
— Robin MacNab (@RobinMacNab) April 26, 2018
A7 #TradeElite : make sure a) both parties align on values; b) everyone has an equal voice at the table, no hierarchy; c) outcomes are mutually beneficial, win-win; d) you have face-time with each other; e) you meet regularly to reinforce & revisit @VarandaNetwork https://t.co/dCk4Ivb9RO
— bernadette fernandes (@on_the_varanda) April 26, 2018
Ok, I more Q before we go! What are some things you can do to maintain a positive relationship with your international business partners?
A8: Keep communicating! Once you’ve found a great partner maintain regular contact with frequent check-ins to talk through any problems. This will keep confidence levels high on both sides, and means you can deal with any unexpected issues. #TradeElite
— Matthew Larivière ?? (@Matt_Rivs) April 26, 2018
Q8 #TradeElite : Keep visiting your appointed partner in the country you doing business in, get them over to your HQ, arrange in-house and back at HQ training for partners, develop a strong marketing strategy, look at social media to strongly advocate your partnership in market.
— Varun Anthony (@Varunanthony) April 26, 2018
Keep communications open and like all relationships expect ups and downs which requires a dispute resolution clause to resolve problems and maintain a productive relationship
— Siddha Param (@siddhaparam) April 26, 2018
Finally have an established exit strategy with mechanisms to calculate cost for exit where the market justifies such a move.
— Siddha Param (@siddhaparam) April 26, 2018
A8 #TradeElite : treat your international business partners as an extension of your business and that will establish loyalty & trust from the start; reward your partners as you would an employee for a job well done @VarandaNetwork https://t.co/h80K8ibCIO
— bernadette fernandes (@on_the_varanda) April 26, 2018
Read the rest of the chat and follow future discussions by following the #TradeElite hashtag. And stay tuned for the next #TradeElite chat, coming up Thursday, May 17 at 2:30-3:30PM ET, and if you haven’t yet, join us on Twitter at @FITTNews.
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