More and more businesses are looking to grow by building links and trading with companies in other countries.
While this is a bold, and intelligent, step, it can lead to some pitfalls. Not only do you have all the same problems as you would growing a business in the UK – primarily finding customers and getting paid – but you will also have to contend with countries where English is not the first language.
While the language barrier can be overcome directly, perhaps by employing someone who is fluent in that tongue, there are other things to consider – especially when managing your credit control and collecting payments.
A knowledge of the country’s business culture is vital, and probably more important than speaking the lingo. We have dealt with lots of companies who have struggled to win contracts, and then get paid, purely because of their ignorance of the country they are dealing with.
Whilst Government organisations like UK Trade and Investment do a great job of helping businesses develop trading links in Europe and further afield, businesses still have to address the issue of how then to deliver that business, at an operational level, to ensure those international business cultures are identified and sympathetically managed.
Recognising this need, and in the spirit of giving in the run up to Christmas, we have put together our 'Lucky Seven' tips on collecting payments from foreign companies:
1. Speak to the right person: in some countries, businesses are organised in a very hierarchical manner, so decision-making powers lie in the hands of very few people.
This is particularly true in Greece, where senior managers make the decisions and you’ll be wasting your time speaking to anyone without real authority.
2. Make sure you have a clear agreement: in China it is very difficult to say ‘no’ directly, therefore be circumspect about anything other than a direct ‘yes’.
Similarly in South Africa, make doubly sure of every aspect of the business arrangement before starting to trade – especially with recently privatised companies – because high levels of bureaucracy are common.
3. Humour: Use wisely. In Germany, humour is generally considered to be out of place in business, so avoid it in all difficult or important business situations.
4. Small talk: many countries, including The Netherlands and Germany, prefer you to get straight to the point in your business dealings with them.
Alternatively, in countries like Spain, Brazil and Hong Kong, your rapport with them is the most important part. You need to spend much more time developing a friendly relationship with Brazilian companies to get ahead. Similarly, in Hong Kong, you should display an interest in family, general health, and even your impressions of the country to make a success of your trade links.
5. Get straight to the point: Subtlety, diplomacy and coded speech can all lead to problems, so don’t beat around the bush.
6. Follow up your initial communication: some countries place more importance on the written word than the spoken word, and vice versa.
In Spain for instance, it’s important to follow-up an email with a phone call, but in Germany you must do the opposite and put your phone conversations into writing.
7. Free online translation websites - don't use them for business! They are free for a reason. In many countries, including France and Germany, the written word is more important than the spoken. Get your message wrong in your initial communication and you could have problems.
Always check and double-check before sending correspondence, particularly to French companies. In France perhaps even more than in other countries, the ability to produce correct written language is seen as a sign of intelligence and good education. Written business French is also extremely formal and full of protocol - you have been warned.
Octempo:RM specialise in supporting SME businesses that trade internationally. We have over 20 years experience in international trade and currently help clients exporting to over 30 different countries.