Learn Various Facets of Doing Business in 39 Countries
By Garrett Sutton, Esq.
As business becomes more global, it becomes even more important to appreciate how local it remains. This is to say that there is not one global standard for doing business: How you conduct a meeting, How you present your business plan, How you negotiate a deal will be subject to the culture and business traditions in your host country.
Just because they do it one way in St. Paul, Minnesota, doesn’t mean that’s how it’s done in Sao Paulo, Brazil. You can either understand, appreciate and embrace the differences or you can be culturally tone deaf, offend your hosts and go home without a deal.
As developing economies continue to advance, as funding sources arise around the world and as business plan competitions become open to all in every nation, it may make sense for you to be open to global opportunities. Which, ironically, means you’ll have to become attuned to local business customs. For those of you who are certain that you won’t do business beyond your own city, much less your own country, you may be tempted to skip this article. But before you go, consider one point. The information in this guide may help you be a better business person where you are. There is a lot of wisdom in the business traditions that have developed over thousands of years in other cultures. Maybe you will glean one nugget of information that suits your own personal style. Maybe that nugget leads to the funding of your business plan.
Personal Style vs. Culture
We must distinguish between one’s personal style and their local business culture. Both are important. When you walk into that meeting you want to analyze and understand the person you are dealing with as an individual. What is their personal style? How do they conduct their business? You also want to understand the framework of the culture you are dealing with. How are meetings handled? Who is the decision maker? What can I do not to offend anyone?
Measure the person first. Apply the local standards second. And in doing so hopefully you will gain a new foreign partner and new foreign funding.
Take These as Guideposts
What follows are very broad based and general statements about various facets of doing business in select countries. In an era of heightened sensitivities to anything that can be considered a stereotype or a value judgment what follows just might bother some readers.
Please know that it is not our intent to offend. It is our intent, however, to fully fund. You. In your business. If you can appreciate cultural differences, if you can develop strong personal relationships with business people around the world it seems to me that everyone is better off. There is better communication and understanding across the borders, unintentional offenses are avoided, deals get funded, people are employed, and wealth is created. It is all good.
Obviously, there is not space to include every country and every situation. If we did not include a country of interest that means you are going to have to obtain your own information. And even if we did briefly mention a country of interest you are still going to have to do your research. There is much to know and we want you to succeed. Understand and appreciate all the local customs by reading and consulting with your professionals in the host country. Your lawyers, accountants and other advisors can be of great assistance. As well, there are companies that offer courses in cross cultural awareness. If paying for a course allows you to build trust and better relationships with foreign partners it may be money well spent.
Again, what follows are generalizations. They will not necessarily apply to the individual you are dealing with or the situation you are in. Over time, as more and more people come into contact, some of these conditions may change. Please take them for what they are: general guideposts and not specific trail indicators.
We will first discuss meeting strategies, then a few unique business plan cases, then negotiations and finish with business cards. (When doing a business plan you can’t forget to budget for good quality business cards.)
The style and tenor of meetings can and will vary from country to country. Here are some examples of what to expect:
Meetings are relaxed but serious. Aussies prefer those who are modest and downplay their own successes. A good sense of humor, including self deprecating humor, is appreciated. Do not engage in high pressure sales tactics. Do expect to hear some colorful language.
Meetings will be concluded when the meeting is done, and not when a certain time is reached. If you are traveling to Croatia keep your schedule flexible. Meetings can take on a life of their own.
One of my clients is the type of person who fills a room, both literally and figuratively. He is a big man, with a booming voice, wild hand gestures and a knack for interrupting another with his latest, greatest thought. This is not how to do a business meeting in Estonia.
Soft voices, minimal gesturing and a lack of conversation overlap are the norm. My client fortunately met with a savvy lawyer in Tallinn, Estonia’s capital, before the meeting. With coaching the big bear became polite and contrite. He was always a man of his word. By taking it down a notch, and remaining reliable, he was able to fund his Estonian deal.
It is imperative to schedule an appointment for a meeting, which should be made at least two weeks in advance. July and August are tough times to get in to see someone as many are on vacation. If you don’t speak French make an apology for not knowing the language. As well, knowing a few key French phrases will aid in developing a positive relationship. Avoid making excessive claims about your business plan. Exaggerations are not appreciated.
If you are traveling to India to present your business plan it is best to arrange for an appointment one to two months in advance. Be sure to reconfirm your appointment the week before and the day before the meeting. Meetings can be cancelled and rescheduled so keep your schedule open. Always arrive on time. Punctuality is important. Meetings initially involve small talk and getting acquainted chatter. Be prepared for the fact that little business may get done in the first meeting. Focus on getting to know your Indian hosts.
Business meetings may occur in a restaurant or a pub, allowing everyone to be on an equal footing. Even in a pub setting, however, be careful not to be too loud or too full of yourself. The Irish are generally excellent conversationalists and enjoy verbal banter. They like to look at a business plan from all angles. Bring your A game and make a deal.
Appointments are a must and should be made in writing 2 to 3 weeks in advance. Reconfirm the meeting by telephone or fax. Don’t even think about scheduling a meeting in August. Your business contemporaries are on vacation. Dressing well is imperative in Italy. Conservative suits for men and conservative dresses for women are favored for business meetings. Expensive accessories are acceptable for both women and men.
When asked a question you do not have to immediately respond. In fact, the Western style of quickly responding so as to show that you have not only mastered every detail but that you have them on the tip of your tongue may be considered rude by some in Malaysia. Pausing and giving thought to the question and then calmly responding is the preferred method in such gatherings. Of course, thinking before you speak is generally a good idea everywhere.
With people they don’t know, New Zealanders can be pretty reserved. At the start, it is best if you are not too forward either. But once a relationship develops Kiwis can be surprisingly friendly and outgoing. They certainly appreciate a good sense of humor. In meetings it is important to be clear and direct. Your business plan and your presentation should state your proposals in a crisp and understandable fashion. Don’t jump from pillar to post when speaking. By sticking to your points in a logical progression of thought you will be well received.
Be ready to engage in small talk. It is part of the relationship building process. Use any lunch or dinner meetings to forge a personal connection with your Polish colleagues. Once you have established that personal report, meetings may become somewhat relaxed. However, the Polish participant with the most seniority will generally always open the meeting and set the agenda.
The use of titles is important in Portugal. If one has a university degree they may be referred to as ‘doutour’ or ‘doutoura’ (“doctor”) with or without their surname. Wait until you are permitted to operate on a first name basis. Similarly, continue using the formal case for the spoken word until your Portuguese colleague signals that informal speech is acceptable.
Be on time for your meeting. Being late reflects very poorly on you. Thus, you may want to arrive a bit early to ensure you are punctual. Small talk is small at the start of a meeting. Although there can be exceptions, you will generally get right down to business. Be prepared to discuss the details of your business plan. Have any back up information and data handy as you may be called upon to discuss it.
Turks prefer to do business with those they trust and personally like. They will want to engage with persons who are interested in a long relationship. So building a positive relationship is very important. Many first meetings are exclusively about getting to know each other. Only after a relationship is established will you be getting down to business.
Do not expect a lot of small talk at the start of a meeting. Scheduling several busy people into one meeting may take some effort. Getting down to business is important as time is valuable. While the participants in a meeting may seem relaxed, the time and effort of a meeting is taken quite seriously. If you make a presentation, be direct. Visual aids are frequently used. Be sure to back up any claims as Americans like data and research.
At the end of the meeting there will be a summary of what was decided, what the next steps are and who will implement them.
Business Plan Particulars
In our research, we have come across three countries where business plans are required or have unique requirements.
A business plan can be considered mandatory in Germany. When starting a business in Germany there are a number of bureaucratic hurdles to overcome. You will need to register the business at the local court. You will then need to complete two tax registrations, one for the commercial tax and one at the local tax office. After these filings are complete, you can obtain a certificate of registration to commence business. Along the way, you will be talking to banks and applying for benefits with German authorities. In these discussions it is mandatory to have a business plan. Start writing. As well, in order to obtain permission to live and start a business in Germany several things are required including an application for a residence permit and a business plan. You really don’t want to have to go through it all more than once.
A business plan can be considered almost mandatory in Peru. Starting a business in Peru means registering with the local government body. It is strongly suggested that you show adequate capital in a Peruvian bank account and a sound business plan as you proceed through this process.
Business plans are crucial in South Africa for new businesses and existing businesses looking to expand. Any banker or investor will require a business plan. A unique element found in many South African business plans is a business continuity plan. This is a discussion of the priorities and strategies in the event of a system failure or disaster. Expect to be asked to see this additional section.
Your business plan will involve negotiations over ownership and funding. Work with a good negotiating team on your side, and appreciate the customs on the other side.
If patience is a virtue, prepare to be virtuous.
As is true in most countries, if you are not fluent in Portuguese, the language of Brazil, you are best served by hiring an experienced translator. It is best to use local accountants and lawyers as Brazilians may resent the presence of non-resident professionals. Your hosts negotiate with people, not companies. Changing your negotiating team may result in having to restart negotiations from the beginning. As decisions are made by the highest ranking person be sure to understand the hierarchy in the room.
Being from a big country with plenty of room, Canadians like their own personal space. Speaking is done at arm’s length and personal information is not readily forthcoming. Meetings begin with a minimal amount of small talk before getting down to business. Meetings with French speaking Canadians will be more hierarchical and will center on the most senior attendees. Meetings with English speaking Canadians may be more open with all parties contributing. When presenting your business plan be certain to be able to back up your claims with research and supporting information. Canadians are not given to exaggerated claims, and are suspicious of that which appears to be too good to be true.
Your business plan should be printed in both Chinese and your home language. During negotiations it is best if only the most senior member of your team speaks. (Please remember that when presenting your business plan.) Do not expect any decisions coming directly from the meetings you attend. Know that negotiations may occur at a very slow pace.
Ecuadorians want to know who they are doing business with. They may ask what some would consider intrusive questions so as to gauge your trust worthiness and reliability. While you may not want to reveal such information, an Ecuadorian may find your distance to be rude. At the same time, Ecuadorians speak with great courtesy and consider blunt communication also to be rude. So good luck with that conundrum. In your negotiations avoid confrontations and do not put others in an awkward position. Trust is paramount. If you agree to do something you had best follow through which, of course, is a good policy to follow anywhere around the world.
As many are aware, saving face is very important within Japanese society. Turning down someone’s request results in embarrassment and a loss of face to the other person. Which, when negotiating a business deal, can be tricky. The whole idea is to get someone with money to accept your request for funding, or, in other words, to say “yes.” If your request is something that cannot be agreed to, look for a response akin to “it is under consideration” or “it is currently inconvenient.” The party you are dealing with is saying no in a way that allows you to save face, which is actually quite thoughtful of them. Face equates to dignity and saving it is a good thing. But it can be frustrating for an outsider who has their future on the line to hear that their business plan is under consideration.
In many cultures while that doesn’t mean “yes” it also doesn’t mean “no.” In a related negotiation strategy, using a Japanese lawyer is viewed as a matter of goodwill. Your Japanese lawyer will also be able to tell you when “maybe” really means “no,” thus saving you a great deal of wasted time and frustration.
Kenyans are very diplomatic in newer and more formal relationships. Like the Japanese, maintaining honor and the avoidance of bringing shame upon another are important. A direct speaking style is not always the best manner. A more nuanced approach will serve you better in negotiations.
Business moves slowly in Lithuania and your business colleagues there will not be hurried into coming to an agreement. Each point will be discussed thoroughly before moving onto the next one. A deal will only be reached when the othe