FROM MASTERING NEW CUSTOMS TO GETTING A GRASP ON AN UNFAMILIAR ECONOMY, DOING BUSINESS IN ANOTHER COUNTRY CAN BE TRICKY-BUTTHE RISK

CAN BE WORTH THE REWARD. HERE'S YOUR PRIMER ON 5 HOT INTERNATIONAL MARKETS OUT

BY

L E E

G I M P E L

ENTREPRENEUR

JUNi: ?OS

ness in Brazil, insists that U.S. entrepreneurs find a "harbor pilot"a Brazilian to navigate the business sboals ofthe only Portuguese-speaking untry in the Americas. Sambazon found theirs in 2002^an American expatriate who had been in Brazil for almost 10 years, was an aai expert, and not least of all, had married into a prominent Brazilian family. As Catberi ne Ix;e, author of The New Rules ofhiterlational Negotiation, points out, one's extended family network plays an Important role in Brazil, so it shouldn't be surprising to do business with a partner's cousin. Also, nepotism is common. And while Ryan opted tor shorts and flip-flops in the steamy Amazon, his laidback attire earned him dirty looks from some Brazilians, he ^ays. For a business meeting, Lee recommends wearing a conservative suitnever jeanstoa 10 a.m. rendezvous and then going out for a nice lunch. As. you're getting to know your partner, expect physical contact (such as a touch on the shoulder or a pat on the hack) and close proximity to tbeni; backing away can be perceived as insulting. Despite cultural differences, Sambazon has found success in Brazil. "Working with Brazil and in Brazil has been a great experience,"says R)'an, whose company reached nearly $20 million in sales last year. "Brazilian laws and regulations are quite favorable to foreign direct investment."

BRAZIL
When Ryan Black and Ed Nichols, both 33, took a surfing trip to Brazil in 2000, they discovered aai and resolved to bring the delicious ind nutritious purple fruit back home to the United States to make smothies, drinks, supplements and more. But they knew that Sambazon (sambazon.coni)the company they cofounded with Ryan's brother, [eremy, 34would have to keep one foot in Brazil because these "superfruits" grow nowbere else on earth. In fact, in addition to their San Clemente, California, headquarters, they've since put down roots in tbe form of a processing plant in the Amazonian state of Amap, which is only accessible by boat or plane. In a way, Sambazon's ties to Brazil and its exotic, in-demand offerings are em-

blematic ofthe untapped opportunities the expansive country offers North .American companies. Brazil isferand away South America's largest nationit's nearly the size of the United Statesand boasts a $1.8 trillion economy. It is also home to some 190 million people and borders all but two countries on the continent. The motto on Brazil's flag proclaims "Ordem e Progresso," but for many years there wasn't enough "order and progress" to make Brazil a suitable trading partner. However, last year it took in more than S37 billion in foreign direct investment^ double its 2006 tally. The rise bespeaks foreign favor, but Brazil ranks only 122 on the World Bank's scale that measures how easy it is to do business in various countries; Mexico is 78 spots better.

Paulo Rocha, owner of HRM InternaIt used to be that Russian commerce contional Inc., a management consulting firm jured up images of menacing MiG factothat helps American companies do busiries or long lines to buy beets. Not that it

RUSSIA

mattered to American companies; they were frozen out by the Cold War. Today, though, Glenn Coggeshell, 39, is excited about the prospects for Black Dot Coffee, his $3 million gourmet coffee business in Qiniano Island, Washington. Like many entrepreneurs, Coggeshell sells his products online (blackdotcoffee.com}. What's more surprising is that his cofee is also sold in a number of casinos across Russia, as well >i.s in Moscow's internationai airport. Coggeshelt isn't alone in his enthusiasm for doing business with Russia, which has a population nearly half that ofthe United States. WTien the Iron Curtain fell in the early '90s, businesses swooned over the idea of trading with the world's other superpower, but a Wild West economy dampened prospects. "The image ofthe '90s Russia as a kind of lawless and not very functional economy and political environment is gone," says Marat Terterov, author of Poifi^ Business With Russia. The economy has grown about 7 percent anhe first noticed the country's promise nually for the past decade, and personal while traveling during his previous caincomes have been up more than 12 perreer in the music industry. cent each year for the past six years. Still, seeing green takes more than new "They have a middle class that's grow- money and post-perestroika attitudes. ing," says CoggesheU, whose Russian wife, According to Terterov, "The overall busi32-year-old Svetlana, is president ofthe ness environment in Russia is not overly company. Having a Russian spouse cer- favorable to [small and midsize entertainly helped Glenn break into the Rus- prises]. You'd have to have something sian marketshe can translate docu- really interesting." Black Dot's high-end ments, for example, and some of her productthe first American brand of family members in Russia work for the roasted coffee to be imported, says company. But he insists he'd be doing Glennstood out in this market, which business there even if he didn't have the had been saturated by instant coffee. advantage of being married to someone However, Russian authorities would not intimately familiar with the country. "I let him bring in his beans without a sanididn't start this business over there be- tation certificate from the U.S. governcause my wife is Russian," he says. In fact. ment assuring the product's safety, even

though American food regulators told him it was unnecessary. When trading with Russia, get set to wait; Terterov says Russians often "see time on their side." They also have a "guilty until proven innocent" mentality, so they won't automatically trust you, either. Breaking the Russian ice often happens during late evenings of socializingalong with a healthy (or, as the case maybe, unhealthy) quantity of spirited toasts. "You sometimes have to drink a little vodka and have a few dinners and really understand who you're getting into business with," says Glenn. And if youVe going to storm Russia, you'll need to convey success in how you dress, what you drive, where you eat and where you

stay. "I doji't wear a suit too much over here," he says, "hut I'll put one on when I go over there."

INDIA

For Hayden Hamilton, growing GreenPrint Technologies (printgreener.com) would have heen too pricey if he'd done "Indians have the hardest time saying everything in his Portland, Oregon, headquarters. So Hamilton, 31, turned to In- no, and there are four or five different dia to holster GreenPrint, which sells soft- ways we say no," says ware that helps reduce printing costs hy Ranjini Manian, who eliminating wastcil pages before they're lives in Chennai, India, printed. Today, the majority of Hamil- and is author of Doing ton's software is developed in India, and Business in India for he projects sales of S6 million this year. Duiunties. "If you're As with IBM and Microsoft, the draw waiting to hear 'N-0,' it for Hamilton was a huge pool of aiford- won't be part of our voahle, skilled empioyees. Yet salaries are cabulary." Confusion rising. Interviewing a prospective hire, also comes from body Hamilton ioimd that "he was expecting language: Indians nod more ill India than I think we would have in assent by moving their heads in a way paid for the same person in the U.S." that, to Americans, conSuch newfound wealth has. hy some esveys amhivalence or distimates, resulted in a middle class that agreement. comes close to rivaling the population of the United States. "The upper-class marAnd India's rigid soket is very eager to consume," says Mira cial structure means the Kamdar, author of Pkind India: How (he boss is The Boss and Fastest Growing Dctnocmcy s Transformsubordinates are truly ing America and the World, who notes that that; don't expect emeven a fraction of India's supersize 1.1 hil- ployees to readily adapt lion population is a huge market. to American-st)de teamBut just hecausc India is growing and work. Also, smaller comwell-trodden by huge multinationals, it panies have a harder doesn't mean that doing husiness there is time recruiting and reas simple as plucking tasty morsels from taining employees who the local tandoori huftet. High-tech sec- prefer to work for bigtor aside, the $3 trillion Indian economy is shot brands.

still very immature. Hamilton, for example, soient three hours applying for a phone linethen waited a month to get it installed. When he needed decent buhble wrap like he'd find anywhere in Portland, he had to commission a manufacturer tn do a custom run. What exacerbated the little snafus was Indians' proclivity to deliver the answer they thought he wanted, even if it wasn't accurate.

Of course, working on anything presupposes that employees will he at their desks and the lights and computers will be functioning, which isn't necessarily a given. Hamilton reports that a two-mile trip can take hours thanks to India's congested traffic, and power outages require that companies spring for expensive hattery backup or generators. But the adjustments have heen well worth the headaches for GreenPrint so much so that Hamilton decided to

bunch a second business in India, Proj^ressiveRx, an online pharmacy that imports Pharmaceuticals from Asia. "There is iust an amazing amount of talent," says Hamilton, who notes that younger Indians are becoming much more acclimated to global business standards. "The number of qualified hires that we'vf found in almost all areas we looked is very impressive."

CHINA
Silas Deane, 42-year-old president of Baden Bath, a SI million provider of luxury showers, tubs, sinks, vanities and the like, found himself in China for the same reason every company seems to find itself in the world's most populous country: manufacturing. China is the world's second largest economy and one of the leading destinations for direct foreign investment. But just because China is the global go-to country doesn't mean that making it work for you is a piece of cake. Indeed, overcoming cultural differences can still be as formidable as scaling the Great Wall. The Chinese want to do business with individualsnot companies-so cultivating friendships is crucial. Rather than cutting to the chase, the Chinese prefer a courtship filled with get-to-know-you banter and big banquets full of mysterious delicacies. Thus, like other Americans, Deane had to rein in his "get the

deal done and move on to the next one" philosophy, To drive bome the point, instead of talking turkey, the Nashville, Tennessee, entrepreneur once found himself getting a two-hour foot massage with one of his hosts so tbat they could chew the fat. And nearly every time he visits his manufacturers in Fosban, they insist on taking him on long drives in the countryside to bud camaraderie, often re-covering ground he's admired on previous trips. "They want to spend time v\'ith you," Deane explauis. "They want to get to knov^" you," As a formula for success, Barry Tomalin, director of cultural training at International House, recommends you get a Chitiese agent and treat your partners to 'Very nice meals in very expensive places , , , doing this for six months to a year." Chinese society rests on a foundation of Suanxi, your network of relationships that is supported by the favors you do and accrue. Deane, for instance, will be helping one of his manufacturers^who doesn't speak Englishattend an upcoming trade show in Chicago and

hopefully win new business, in return, he's giving Deane the samples he's shipping over from China and offering to bring new products just for Baden Bath's benefit. But despite the relationship building, Mike Saxon, author of An American's Guide to Doing Business in China, warns that a seemingly solid rapport can still be trumped by yuan. "People who go over to China think it's the China of centuries ago: Confucius, everybody's honorable and whateverand it's not! It's a different culture today," explains Saxon, who adds that the 36 Stratagems, a collection of Chinese proverbs, is part of tbe basic Chinese gestalt. Indeed, Saxon says that it's not uncommon for Chinese companies to keep four sets of accounting books. Saxon also says that the Chinese take a long-term view and aren't risk-takers. Tbe society is less individualistic tban America's, so the Chinese aren't big on confrontation. To this end, Tomalin highlights the Chinese belief in the "middle way," a nuanced form of compromise.

ONLINE EXCLUSIVE
which means they may insist on working out an agreement rather than taking no for an answer. For an American, this translates into fostering respect, including stifling open criticism. The challenges can be as big ns China, but Deane says his relationship with the Chinese has been a valuable asset. "I would consider a lot of otir manufacturing partners over there more than just business partners; they're friends," he says. "They advise me a lot. They're interested in seeing us succeed, too." says that the Mexican economy offers good prospects for foreign firms that can find a niche. The market is especially favorable for companies that can provide "First World know-how," especially as it relates to energy, food production, technology and bunking. Not to mention, Mexico has had minimal inflation and lays claim to one of the highest per capita incomes in Latin America, even though it's only about $12,500. And of course, Mexico's link to the united States was strengthened in 1994 with the esVisit entrepreneur.com/shortcuts to see our top five books on doing business internationally. Such challenges are part of a familiar pattern in Mexico, so be prepared to work around inevitable delays. Mexicans tend to follow a more languid time standard, SI) beyond bringing something to read when waiting for an appointment, expect a lack of urgency when it comes to finalizing a contract. In fact, says Robhins, Mexicans aren't loco about legalese in general. "Business is still done in the majority of the country the old-fashioned way: with a handshake," Robbins says. There's also a strong current of machismo; men are rnost comfortable dealing with a woman who dresses traditionallyin a skirt. Regardless of whether you're wearing trousers or a dress, it's crucial to understand who wears the pants in the Mexican company you're dealing with. "Always start at the top," says Robbins, who flew down to Mexico to meet with a vice president of Bimboa multibilliondolhir Mexican brand and the world's third largest bakery corporation, wbich also happens to have a cheeky, salable name to emblazon on T-shirtswho then secured her a meeting with the president of Bimbo. Harrup adds that Mexican companies will expect a deal to be finalized in person by the two parties' owners, not by surrogates. When meeting with your Mexican partneroften over breakfa.st or lunch^ don't rush to get down to business. Mexicans place a lot of importance on family, so asking about the kids and showing true interest will go a long way in forging business ties. With the small talk finished, Harrup advises tossing out your step-by-step agenda because Mexicans prefer less-struct ured meetings that can seem haphazard by American standards. "There is still tremendous opportunity in Mexico," says Harrup, who sees great close-to-home potential for American entrepreneurs as the economies of the Llnited States, Canada and Mexico become more harmonized.
LEE GIMPEL (gimpelwnting.com) is a Virginia-based writer who covers business and technology. His articles have also appeared in The Washington Post and Worth.

MEXICO
Molly Robbins saw an opportunity in Mexico beyond maquiladora manufacturing plants. Instead of concentrating on cheap labor, Robbins, 42, mined the largely unexplored riches of Mexican intellectual property. The result is LicenZing, her $] million lifestyle brand marketing and licensing agency in San Rafael, California. The World Bank ranks Mexico 44 in the world in terms ofease of doing business, putting it in the top third. Matt Harrup, founder of Mexico City-based information portal Mexperience.com,
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ENTREPRENEUR JUNE 2008

ttiblishment of the North American Free Trade Agreement. F.ven though Robbins was born in Mexico, speaks Spanish and knows the culture, she still ran into issues that any Mexico-bound entrepreneur would face. One of the biggest seems to he a challenge left over from decades ago: Many of her contacts can't make long-distance calls, so she must call them again and again to make a connection. And when describing the Odyssey she went through to get logos, Robbins says, "I've had to recreate a lot of the artwork that's been provided for me because it's not really in a format that's usablewhich is surprising because these are multimillion-dollar companies."