Chinese influence on the U.S. and global economies Part 3 of 4

Intro: In this third of my four part series on the Chinese influence on the U.S. and global economies, we focus on the preparation work necessary for your business if you have plans to enter the Chinese business market (for access to the first two articles in this series, go to www.lourdesgant.com/blog)

Preparation ups your chances of success in international market

‘Failing to prepare means preparing to fail’ seems like another one of those management coaching phrases that is all about word play.  Yet like most trite sayings, it’s based in truth.
Everyone can think of a few people and companies who lucked out without having much of a clue what they were doing. But let’s be intelligent about it. Preparation helps you chances of success. A lot. And unlike luck, you can do something around being prepared.

Get ready for the ‘unknown unknowns’
You’d be rash to embark on any venture without doing some market research, exploring the regulatory framework, assessing costs – all the normal areas for a new business project. Those are known unknowns. But international trade, and particularly in China, raises a whole new set of issues that you just don’t know about yet.  So how can you prep for unknown unknowns?
www.export.gov, the government’s website set up to help new exporters, identifies four traits that successful new exporters have in common.  Whether you are exporting or importing or entering another agreement all together, these four points are key to your plans to work with a Chinese business enterprise:

 

  • a genuine commitment from management
  • an understanding of the demands trading overseas will bring
  • realistic expectations of return on the investment
  • flexibility with both products and staff support

In other words, even if you aren’t completely sure of the Chinese business practices and you don’t know what’s out there to start with, you need to know YOUR plan. Like any journey into self knowledge, it means asking hard questions and insisting on honest answers.
Do a health check first
Nothing’s completely new in business and it’s best to learn from people who’ve been there and bought the t shirt. There’s a well established structured ‘health check’ process which focuses on the key areas to make sure nothing’s forgotten or finessed when preparing for a new venture and it applies to doing business with China as well. The health check means doing a business audit that answers these questions:

 

  • Is management completely committed to the international business plan and demonstrating this commitment with adequate funding and resources?

 

  • Do we know the cost of this enterprise, both in terms of money and human resources and expertise?

 

  • Exactly which product(s) are to be imported or exported and have we done sufficient market research and cultural evaluation to ensure success?

 

  • What exactly are our goals in this international business venture?

 

  • Have we gained knowledge and done due diligence on licensing and other government related issues associated with this venture?

 

  • Have we trained our people in the nuances of cultural differences and how to work effectively with international partners?

 

  • Do we have a plan for after sales service and who is going to handle that?

Conducting this kind of audit, will help produce a snapshot of your company, and highlight your strengths and weaknesses. It’s the first step in turning your ‘unknown unknowns’ into ‘known unknowns’ so you can make them ‘known knowns’ when you are working in the Chinese market that has business and cultural differences that will impact your company’s results.

 

 

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