Workshop on how to build international partnerships. Presented at the NY Enterprise Report International Business Opportunities Conference

1. The most important factor in
international business
Workshop presented by Alexander Gordin at the
International Business Opportunities Conference
produced by the New York Enterprise Report.
November 9th, 2011

2. Poll Results
What is the most important factor for succeeding in
international business?
• Knowing the language of the host country……………… 8.3%
• Having the right partner …………………………………….. 75%
• Having the cheapest product ……………………………… 0%
• Knowing whom to bribe……………………………………… 8.3%
• Having political risk and export credit insurance………. 8.4%
• Luck………………………………………………………………. 0%
2© 2011 A.M. Gordin & Co., LTD.

3. The Winning Formula
A local partner’s ability to navigate the country’s cultural,
political, criminal and business landscapes, combined with your
company’s ability to provide competitive, market adopted, value
added products or services will produce winning results.
3© 2011 A.M. Gordin & Co., LTD.

4. Types of Partners
• Local in-country Agent or representative
• Local Distributor, Exporter, Importer
• Local Managers
• Transactional
• Manufacturing
• Service
• Joint Venture
In short, any individual or entity with whom your interests may
be aligned for a prolonged period of time should be treated
as a partner and selected accordingly.
4© 2011 A.M. Gordin & Co., LTD.

5. Right vs. Wrong
Wrong partner does not just mean incapable, corrupt,
dishonest or disreputable.
It also means someone who is incompatible:
• Culture clash
• Personality Clash
• Different goals and ambitions
• Desire for power and control of the venture
• Unable to communicate effectively
5© 2011 A.M. Gordin & Co., LTD.

6. What makes a good Partner?
• Loyalty and Integrity
• Ability to get things done in country
• Professionalism
• Shared goals and values
• Loyalty and Integrity
• Loyalty and Integrity
• Loyalty and Integrity
6© 2011 A.M. Gordin & Co., LTD.

7. Right vs. wrong considerations transcend from the individual
level through entire organizations.
Of course, such incompatibilities can also destroy domestic
partnerships.
Yet, while its possible to pursue domestic business without
strong partnerships, they are critical to the success of any
cross-border venture
Critical Factor
7© 2011 A.M. Gordin & Co., LTD.

8. The Local Partner – your company’s in-country representative
must be able to completely service your in-country needs:
• Have the gravitas to recruit and manage local staff
• Properly represent your company at all levels
• Understand your strategic goals
• Respect the value of your brand and the damage to it that a
single wrong act may cause
• Look out for your interests when it comes to financial
matters - expenses, profits, investments
The Local Partner
8© 2011 A.M. Gordin & Co., LTD.

9. LOOK EVERYWHERE!
• Seek recommendations from U.S. Commercial Service,
Chambers of Commerce, expats, local lawyers, auditors,
industry associations
• Engage headhunters
• Where appropriate, ask family and friends who have local
contacts
• Observe attendees at trade shows, hotels, conferences
Where to look
9© 2011 A.M. Gordin & Co., LTD.

10. It is a bit like finding a spouse and takes:
• Luck
• Hard work
• Observation
• Time Commitment
• Patience
• Ability to convey your growth vision
• Proper compensation arrangement
Finding the right partner
10© 2011 A.M. Gordin & Co., LTD.

11. • Look beyond the resume
• Invest in the relationship
• Proceed with caution
• Put “trust, but verify” framework in place
• Have leverage in your relationship
• Create a contingency plan
TRUST YOUR GUT!
The strong candidate
11© 2011 A.M. Gordin & Co., LTD.

12. • Check references
• Test relationship by setting goals to accomplish small milestones
• Learn the personal history
• Understand friends and family inter-relationships
• Ascertain what drives the individual
Look beyond the resume
12© 2011 A.M. Gordin & Co., LTD.

13. • Provide in-depth training
• Go jointly on local sales calls
• Invite to visit your U.S. offices
• Greet at the airport and chaperone during stay
• Spend leisure time together
– Listen to the stories in a bar or around the picnic fire
– Observe interactions with friends, family, strangers
– Talk about goals, dreams, values
– Learn birthdays, holidays
– Respect cultural customs
Invest in the relationship
13© 2011 A.M. Gordin & Co., LTD.

14. Numerous international ventures failed because they chose
wrong, albeit experienced partners.
Conversely, many others succeeded with the partner who had
the right personality and character but lacked pertinent
business experience.
Experience is not everything
14© 2011 A.M. Gordin & Co., LTD.

15. • Negotiate agreements, which are only renewable upon meeting
mutually agreed upon milestone, especially when exclusivity is
involved
• Set up trial periods
• Set realistic milestones and define respective roles
• Upon completion, evaluate and make adjustments
• Start with small financial transactions and remember the
“Magnitude Problem”
Proceed with caution
15© 2011 A.M. Gordin & Co., LTD.

16. • Negotiate and develop regular fiscal and business reporting
procedures
• Formalize all corporate registration paperwork, have certified
copies and signing power on bank accounts, tax authorities, etc.
• Make examination of bank statements, tax declarations, books and
invoices a routine, rather than exception**
**Not doing so risks alienating your partner
Trust, but Verify
16© 2011 A.M. Gordin & Co., LTD.

17. • Sign non-circumvent agreements with U.S. venue for dispute
resolution
• Have local employees know “who is the boss”
• When practical, be the one who hands out bonuses
• Keep all distribution and IP agreements in your company name
• Build relationships with local customers, suppliers and service
providers
• Don’t leave large sums of money abroad; have local partner
cosign all local loans
• Remember, it is hard to enforce local court judgments
Leverage
17© 2011 A.M. Gordin & Co., LTD.

18. Have Contingency in place
• What will you do if accident or illness strike?
• What happens if partner absconds with $?
• Who will take over?
• Develop familiarity and a relationship with all local clients,
suppliers, etc.
• Have your signatures on all local bank accounts and know all
local bank managers
• Groom a successor independently
Plan B
18© 2011 A.M. Gordin & Co., LTD.

19. Thank You
for your attention
103 Carnegie Center Dr, suite 300 | Princeton, New Jersey 08540 | (609) 716.1000
www.fluentinforeign.com
www.princetoncouncil.org
THANK YOU!
19© 2011 A.M. Gordin & Co., LTD.