Email etiquette is more important now than ever as it is a written documentation of daily business proceedings and can be kept and preserved. Moreover, email etiquette can vary cross-culturally, and knowing these important differences can help make or break your business goals.

Considering 122 business emails are sent and received per day, per user, you have the opportunity to set yourself apart in a global market by ensuring each email is aptly worded for your audience.

Professional protocol is important when you introduce yourself to a prospective employer, new colleague, or potential client in both U.S. and international markets. Among the biggest faux pas you can make, is failing to offer any introduction or offering an insincere introduction. To reduce the chances of these email faux pas, employ these seven practical tips for a positive first impression:

1. Research the form of address

Discover and use the proper form of address for the recipient. For example, you should use title and last name with a colon, e.g. “Dear Ms. Smith:” for a higher-ranking colleague, potential new employer or a client.

Plan to use the formal Mr., or Ms., and avoid defaulting to an informal first name unless you are 100 percent certain of organizational culture. For example, “Hello Sharon:” to a coworker or known contact may be acceptable; however, “Dear Ms. Howard:” is appropriate when introducing yourself to a potential new client, customer or employer.

2. Direct cultures

In direct cultures like the U.S., the best practice is for the sender to introduce themselves by first and last name with some background information in the first few lines. For example, “Dear Ms. Mandell: My name is Sharon Schweitzer, founder of Protocol & Etiquette Worldwide; I was referred to you by …” or “My name is Sharon Schweitzer and I am an International Business Expert writing to you about …”

This is especially important when introducing yourself to new contacts, potential customers, clients and employers who need to understand how you received their contact information.

3. Indirect cultures

When sending email to people from indirect cultures, it is proper protocol and a best practice to research country customs. For example, in Japan it is polite, appropriate, and customary to inquire about the weather in the first sentence of a business email.

Contrastingly, it would be inappropriate to send an email introducing yourself to a potential Japanese contact. In indirect cultures, introductions are only made by third parties due to custom; cold emails are ignored, deleted, blocked and/or marked as junk.

4. Background information

Providing context for the self-introduction is crucial, especially when referred by business colleagues.

Beginning the body of an email with “I hope this email finds you well” or “I hope that you are well” can convey insincerity. Be authentic and provide relevant information to the recipient, allowing them to make an immediate connection.

5. Professional etiquette

Use proper business etiquette even if a new manager or prospective employer uses an informal tone in an e-mail to you. Once you become familiar with protocol, you may be able to correspond in a more personable manner, but initially displaying professional modern manners will present you and your company in a favorable light.

6. Concise points

State the business purpose of the email concisely, whether it is a proposal, introduction, writing sample, resume or product; graciously request interviews, one-on-one meetings, or resources.

7. Sign off with contact information

Select an appropriate closing phrase for the destination culture, like “kind regards”, “sincerely”, or “best regards”. If your email signature line doesn’t include your contact information, then be sure to include it the body of the email.

With these tips, you will digitally impress potential new employers, colleagues or clients, and begin to move closer towards building a strong, successful relationship.

The post Don’t lose out on a potential client because of an email faux pas appeared first on Trade Ready.

Decoding ASEAN markets from Canada can be a daunting task.

I remember my first trip travelling from Vancouver, BC over the Pacific Ocean and reading a stack of “culture shock” novels to prepare myself for my new overseas selling adventure. I remember reading and thinking “My goodness, it can’t be that different from our Canadian culture,” but how accurate these novels turned out to be.

Globalization has made our world smaller and more accessible from all points, but ASEAN markets have many differences. Understanding them and recognizing the need to adapt to overseas markets is vital to gaining access and developing a successful and sustainable ASEAN business.

1. ASEAN is not a homogenous marketplace, your strategy must be market specific

Market analytics should be the driving force of your strategy to ensure that it is driven by a comprehensive understanding of market complexities. Exporting companies must scrutinize relevant social and cultural, legal, economic, political and technological data, along with customer, channel prospect and competitor data, to harvest meaningful information. The information harvested must define the best growth opportunities by economic value and likelihood of success, based on facts and logic rather than assumptions and emotions.

Strategy then becomes about choice, deciding where to compete, how to compete and most importantly, how to win. A correctly executed strategy must connect all the functional and fragmented parts of the business into a coherent and unified approach. Moreover, the strategy must accurately align business resources, capabilities and capacity with target markets, verticals and customers.

If the business decision is to enter and develop multiple ASEAN markets concurrently, then the right analytics for each market must be collected.

ASEAN markets may share the single market concept and motto of “One Vision, One Identity, One Community”, but the markets are diverse. Both value perceptions and buying behaviors differ significantly throughout the region.

As an example, Singapore and Malaysia are bordering nations but must be seen in very different social, cultural, legal, economic, political and technological contexts. Companies entering ASEAN markets need to be cognizant of these intraregional differences and distinctions, as well as how they influence perceptions and shape behaviors about exporting companies, their products and partnerships.

2. Correct product and price positioning

A multi-national corporation (MNC) which manufactures batteries in the FMCG (fast moving consumer goods) segment launched into the ASEAN market, proclaiming that “our batteries last five times longer and are only three times more expensive compared to our local competitors’- we will gain millions of new customers”.

The launch failed because of misaligned product and price positioning. The company misinterpreted value perceptions, and failed to recognize that being three times more expensive was beyond the threshold of customer affordability.

Analyzing, understanding and targeting addressable market segments and customer categories is crucial to product and price positioning. Most ASEAN markets have three-tier customer categories:

1. Premium buyers – Discerning buyers who accept only top-tier brands, offering the highest quality in products with the most features, along with priority services. They are willing to pay the highest level price premium, for example Emirates Airlines first class travel.
2. Value-added buyers – Buyers who expect high quality products and services that meet specific needs. They normally accept products with less features and are willing to pay a price premium based on relevant perceived value, for example business class or economy-plus air travel.
3. Price buyers – Buyers who seek products that are of adequate quality at the best possible price, and have less concern about quality, service levels and consistency, for example economy-class or budget airlines no frills travel.

The best growth and profit opportunity may be to offer existing products or customize and differentiate products or services in the value-added buyer category. Customers in the price-buyer category are burrowing up because of globalization and better choices being made available. Conversely, customers in the premium-buyer category are beginning to seek alternatives that still meet overall needs but offer less features at a lower price-point.

Companies entering ASEAN markets must align features that matter with customers that matter. With respect to price positioning, is it about profit percentage or contributing profit dollars? This is a subjective question and depends on the exporting company’s business culture, growth objectives and longer-term ambitions. As an example, is 50% profit on a $2M business more appealing than 41% profit on a $5M business?

Exporting is normally a first step, to test the waters and begin the business building and market development process. Once a market is developed sufficiently, investment in manufacturing assets often follows. As such, companies frequently accept lower profitability during the entry and development stage with the endgame of optimizing profitability and customer service post-localized manufacturing investment.

My view? It’s about immediately being competitive and quickly gaining market-share while maximizing profitability for both company and channel partners.

I believe price premiums are achievable and sustainable in highly competitive markets. However, value-added features or services must be relevant, meaningful, and priced within the threshold of affordability.

Rather than using a simple cost-plus pricing strategy, consider a market or value-based pricing strategy. Market-based pricing factors in similar competitors, product features, services and value propositions, while value-based pricing factors in relevant product and services features that differentiate and enable price premiums.

Either pricing model must provide sufficient profitability for channel partners considering logistics and import duties. This price becomes the Ex-Works or FOB export-price or channel partner cost-price for a specific market.

3. ASEAN markets are made up of people and relationships, not just products and price

The importance and value of relationships cannot be understated or underestimated. Relationships in ASEAN markets are founded on trust and confidence. Canadian companies are considered to be highly trustworthy within the ASEAN region and this established trust equity can often translate into brand, product and services preference and price premiums.

Building trust with partners or suppliers through customer-centric business conduct and ethical behavior is something that must be experienced and this takes time. Exporting companies must understand the ASEAN culture is to establish intimate affinitive relationships that build the business. Companies that try to take shortcuts and build their businesses on opportunistic sales before establishing relationships often fail to develop a strong, profitable and sustainable ASEAN business.

ASEAN markets offer significant growth opportunities, and with the right strategy that is correctly aligned with markets, channels and customers, Canadian companies can thrive in the ASEAN region. The core ASEAN markets – Philippines, Vietnam, Thailand, Malaysia, Indonesia and Singapore – are rapidly emerging as the global growth engine of the next decade. Emerging markets and globalization is here to stay.

A number of key ASEAN markets, such as Vietnam and the Philippines, are rapidly evolving as lower-cost manufacturing alternatives to China. These evolving markets offer significant new interregional customer opportunities due to rising incomes and urbanization. The ASEAN region’s total population is approximately 45.7% of China’s, but when comparing the top 10 cities of the ASEAN region and China, that number rises to approximately 62.1% of that of China.

Vietnam reported record FDI for 2015 and the country’s General Statistics Office reports 95% year over year (YOY) growth in the first half (H1) of 2016 ($3.839b to $7.5b). By comparison, this is second-place in the ASEAN region to the Philippines in attracting FDI, who reported 103% YOY growth in H1 2016 ($19.76b to $40.15b).

The post Three key considerations to help build your ASEAN entry and growth strategy appeared first on Trade Ready.

The way that newer generations are communicating, however, is changing worldwide. We now live in a world where the current generation’s attention span has dropped to 8 seconds and people increasingly communicate with emojis and 140-character tweets.

Within the next four years, almost 3 billion people worldwide will be on social media, simultaneously multi-tasking on up to 5 different devices. Many of them no longer have the time (or inclination) to stop and look up at the person they are interacting with.

Given these circumstances, how will these future executives interact in foreign markets, where meaningful exchanges with other cultures are still based on careful development of face-to-face personal relationships?

Technology can’t replace the “live” experience

Many will argue that seeing someone on a screen is just as effective as face-to-face interaction. They would argue that foreign executives have their own electronic identities and websites with the ability to communicate virtually around the world.  But it is also a fact that anyone who wants to succeed internationally cannot simply refer their new contacts to a Facebook or LinkedIn profile.

Any seasoned international executive knows that meaningful exchanges with other cultures will always be based on the careful development of a personal relationship.

In many international cultures, the decision to trust another person can only be done “live”, meaning developed in-person. Communicating via blogs, forums, business networks, photo-sharing platforms, chat apps, “selfies”, Twitter Feeds, etc, can be useful, but is not enough to build a trusting business relationship.

While videoconferencing, webinars and Skype are excellent methods of communication, nothing replaces a warm handshake, a respectful bow, the verbal exchange of personal confidences, or a spontaneous hug.

Cultures around the world are comparably proficient at communicating electronically, but in order to succeed in foreign markets, North American executives will have to remember the way of doing business on a one-on-one basis. To do that, they’re going to have to dig deep into their subconscious memory-banks and once again add this forgotten skill to their business quiver.

Remembering the basics of international business relationships

1. It takes two to tango.

It is not enough to hope that someone will read and reply to a text or email, or even react positively to viewing a website. To obtain (and evaluate) an answer, nothing replaces face-to-face communication composed of verbal and nonverbal messages.

Millenials and Generation Zers will have to re-learn this ability by joining and participating in networking groups such as BNI (Business Network International) –or even practicing one-on-one communication skills by talking to strangers.

An executive I know likes to strike up conversations in office tower elevators, asking people what they do and exchanging business cards (the 30 second elevator pitch). He even goes so far as complimenting someone for their choice of tie in order to find common ground.

Fifty percent of the time he succeeds, and an interesting conversation ensues, while at other times he is simply ignored. Imagine if you did this just twice a day – that’s one new business contact every day.

2. Learning about other cultures.

It is natural that those interested in other cultures will go online to learn the basics of interacting abroad and follow social media related to one’s country of interest.

However, all this secondary data is never as valuable as one’s own primary research, resulting from personally interacting with individuals from that culture. Chambers of Commerce and business clubs representing foreign countries exist in most major cities and their websites publish cultural and business events open to the public.

A businesswoman I know was planning a trip to Japan. As part of her research she visited the Japanese Consulate and chatted with the Trade Commissioner, attended a function at a local Japanese Cultural Center, and met with visiting Japanese executives who were part of an incoming delegation.

By interacting with and watching the visitors’ body language, she was able to round out the dry statistics she had read about during her research.

Naturally, these steps take time and effort. But in order to be successful in establishing international relationships, it will always be important to be able to look at foreign clients in the eye and create a personal bond.

It takes more than a well-written social media profile, offering a fist-bump or leaping to an exuberant high-five to succeed internationally.

The post High fives aren’t enough to build meaningful international business relationships appeared first on Trade Ready.

Obada Al-Dimashki, CITP|FIBP is the Supply Chain Manager for Orbit Aluminum Industries, which specializes in manufacturing pre-painted aluminum coils.

Driven by a passion for business and an unwavering desire to build better business relationships, Obada was inspired to choose a career in international trade in order to fulfill his broader career goals.

“I got started in international trade because I love travelling, making diverse friendships and experiencing different cultures. I really liked the idea of working with international business partners and learning how their different cultures impact the way they live and do business.”

To pursue a future career in global trade, Obada decided to take FITTskills courses through the International Business program at St. Clair College in Windsor. The courses offered him a practical introduction into his chosen field, which not only helped him to build his skills but also to narrow down his future field of specialty.

I really enjoyed that the FITTskills courses covered all aspects of international trade, and helped me learn them all one step at a time.

“I also found the FITT textbooks to be a very straight-forward and practical read. They are a great way to learn and still offer a good reference. Early in my career I was able to rapidly gain an understanding of what was going on around me through the things I learned from FITT.”

“My favorite course was the Global Supply Chain Management course because it played an effective role in developing my interest and career in supply chain management. I would recommend this course because supply chain management plays an integral role in any organization’s competitiveness.”

Education +  experience = opportunity

During his last semester at St. Clair, Obada seized the chance to intern as a supply chain analyst with Farrow, one of Canada’s largest customs and freight forwarding companies. During his three months there he was able to do everything, including evaluating the productivity of a new ERP (enterprise resource planning) system, classifying cross-border shipments for customs, reviewing documents, and searching for new ways to improve client management.

After graduating from his program he went to Nipissing University to complete a one-year Bachelor of Commerce program and then joined the Masters of Global Business program at the University of Victoria.

“This program gave me the opportunity to advance my international trade knowledge, travel and work on various supply chain projects in Canada, France and South Korea,” Obada recalls, including one project with LG aiding in the expansion of new technological products into the U.S. market.

In May 2015, just two months after completing his project with LG, he was hired by Orbit to be their Supply Chain Manager, the position he still holds today. Despite his busy work schedule he was still able to continue his Master’s program, completing it in early 2016.

Translating from the theoretical to the practical in SCM

Having now spent over a year in his job, Obada relishes seeing the practical side of his business firsthand, as well as any chance to work closely with his fellow international trade professionals.

No amount of studying could have prepared him for the sheer size, sound and might of the machines that power the manufacturing and supply chain efforts of many companies, and how it feels to stand beside them.

Coming from a business background, I never had much exposure to the industrial automation world. Now, it always amazes me how massive these industrial automation machines can get. The monstrous power and noises they discharge is comparable to a thunder storm! It is definitely breathtaking to witness the level of energy, technical expertise and managerial experience advanced manufacturing requires.

“As a supply chain professional, visiting suppliers is a big part of my job, and experiencing these industrial miracles is definitely one of my favorite responsibilities.”

Not only do visits like these allow him the opportunity to take a thrilling look at the machinery that powers international trade, but they also play a pivotal role in his efforts to build relationships and partnerships for his company.

“One of my most interesting projects was when I was preparing a sourcing deal with an international supplier for a big part of our business. We succeeded in building very strong relationships with senior management through inspecting their facilities and providing production, planning and technical solutions to run their operations more effectively.”

“The project enabled us to reach an excellent sourcing arrangement and succeeded in improving their performance. This definitely increased our competitiveness in the market and helped us source raw materials with very favorable terms.”

Enhancing his career through his global business relationships and certification

With some major successes already under his belt, Obada now looks to continue to improve his reputation in his industry.

On top of a strong foundation in education and training, he also recommends focusing on building personal relationships to those just starting out in global trade.

“I think this is very important because in international business, professionals from many countries dwell heavily on personal relationships in order to consider working with you. This means that having a solid reputation and relationship building skills can take you the extra mile in achieving more favorable agreements, opportunities, conflict resolution outcomes and market intelligence.”

Another way he has sought to improve his reputation is by earning the Certified International Trade Professional (CITP®|FIBP®) designation.

“I chose the CITP®|FIBP® designation because I was interested in advancing my international business expertise and academic achievements. I was also interested in becoming a member of an international trade community where I can continue to update my global business expertise and meet like-minded professionals.”

The designation has ultimately helped me to be recognized as an international trade professional, and I feel very happy and proud because it is definitely an achievement.

“I think that it will continue to enhance my credibility in my international business practice. I believe that the materials, membership and business relationships forged within the FITT community will keep me updated and effective within the international trade arena.”

Already excelling in his field, the years to come will undoubtedly be filled with many further accomplishments for Obada.

The post Obada Al-Dimashki, CITP|FIBP – Supply Chain Manager appeared first on Trade Ready.

You’ve had encouraging discussions during the exhibition about new opportunities to sell your products in high growth markets, and you may have even had back-channel meetings with prospects over dinner. You return to your home country, continue the discussion on-line and appoint new distribution on an exclusive basis.

A year later, however, you determine the new partnership has failed, export sales are well below expectation, communications to probe why go unanswered, and bilateral enthusiasm weakens. What went wrong, and what do you need to do differently next time to achieve a more successful result?

Your best options to identify new potential partners

Choosing your channel partners, who will help you sell your goods and/or services, is one of the most critical decisions facing new exporting companies entering ASEAN markets. The markets consist of multiple types and layers of channels serving a wide variety of dealer networks and end customers.

Identifying, establishing and developing the best-fit channel partners is essential in gaining market entry and building a successful ASEAN business.

As such, exporting companies should consider acquiring professional services to assist in identifying, appointing, and developing best-fit channel partners.

Firstly, it’s difficult to identify the best-fit and most capable channel partners during an interregional trade exhibition. Travelling to attend and exhibit at interregional trade exhibitions in major ASEAN cities has become very expensive due to the rapid pace of economic development. Moreover, a number of trade exhibitions have scaled back significantly over the past three years.

Most ASEAN top-tier channel prospects have limited marketing budgets and prefer to focus expenses and resources towards their local or host country exhibitions. In most cases, local exhibiting companies enjoy a significant rate reduction over visiting foreign companies.

When attending trade exhibitions, the main priorities of local companies are to gain new customers within their territories and identify new foreign suppliers and partners. As such, a more focused and effective approach is to attend or exhibit at specific trade exhibitions in strategically selected markets.

Trade exhibitions are just one method to expose channel partner prospects. Additional options such as customer referrals, competitor channels, adjacent products suppliers, industry organizations and consulting firms are other options that should be considered.

Keep the end goal in mind at all times

Secondly, when selecting and appointing channel partners, you should consider three priorities:

Do channel prospects have access to your target customers? ASEAN markets are made up of people and relationships, not products. A qualified channel will have strong existing customer relationships that the exporting company must tap into. This can be evidenced by making joint customer visits to gauge the quality of customers and relationships.

Favorable customer visits and responses to new products and brands will only elevate your value to the channel partner prospect.

Do channel prospects have the financial capacity to support the exporting company’s market entry and longer term growth strategy? Often channel partner ambitions outweigh abilities. It’s crucial to ensure channel prospects have the financial capacity to support marketing initiatives to promote new products and brands and scale up inventories and resources as you gain momentum.

Product supply interruptions due to unanticipated financial limitations will inevitably lead to the customers you gained seeking alternative suppliers.

Do channel prospects have the sales resources to proactively sell your products? Sales professionals have a critical role in engaging customers directly to demonstrate customer value and gains, convince skeptical decision makers, justify price, and defend profitability.

ASEAN channels are beginning to adopt best-selling practices by establishing product specialists to drive the growth of priority products. Tapping into channel product specialists will prioritize your products and optimize customer reach.

Partnerships are two-way streets, so make sure you’re adding value

Thirdly, developing meaningful, productive ASEAN channel partnerships and relationships is about understanding, acknowledging and acting upon channel partner needs and priorities.

Channels seek suppliers offering innovative value-added products that are simple to market and worthwhile to sell. They are reinforced by a willingness to regionally adapt and support mutually agreed upon growth initiatives and goals.

Making your products simple to market requires going beyond product training by developing cooperative market and customer relevant marketing                 campaigns.

It’s important to educate and coach channel salespeople on how to sell your products using a consistent, structured professional selling methodology. Leading regular and frequent joint customer visits will establish channel and customer confidence and accelerate growth.

A new product and brand must be worthwhile to sell in terms of generating new revenues and profits. Channel cost price needs to factor the type, intensity and behavior of competitors, acquisition costs such as logistics, and inward duties often overlooked by exporting companies.

Establishing the correct market price and channel cost-price that is able to gain market-share and provide sufficient profit for channel partners is essential in developing ASEAN markets. This will enable you to motivate channel partners to buy-in, actively market, proactively sell and succeed.

Be a leader in the ASEAN growth markets with the right partnership

ASEAN markets offer significant growth opportunities for exporting companies. The ASEAN region is the global growth engine and will be for the next decade, but accessing these markets requires identifying, establishing and developing dedicated, highly motivated channel partners who can reach your target customers.

Tapping into the many top-tier channel prospects available in the ASEAN region is vital to capitalizing on growth opportunities.

The post Decoding the steps for channel partner hunting in the ASEAN region appeared first on Trade Ready.

Canadian-American trade is the largest bilateral trade relationship in the world. I’ve written these tips with Canadian businesses in mind. In working with Americans, here are a few cultural tips I can give to make your interactions more effective:

Americans have a special relationship to time

In American business, there is a profound focus on completing tasks as quickly as possible. We have an expression: “Time is Money”. It’s the idea that if we save time, there is automatically a value associated with that time savings. Oftentimes that is true.

There’s even a movement which originated in Silicon Valley called “growth hacking,” or trying to speed up the process of finding new qualified sales leads. While there are sometimes time-saving shortcuts, most of us understand that success comes down to hard work and consistency.

But for other cultures, Americans can seem rushed.

This can lead to the misinterpretation that Americans often don’t understand the trust-building process that genuinely requires time to establish. It can also create an air of suspicion about why the deal needs to be signed so quickly.

My advice to Canadians and others feeling rushed is to confront their American counterpart with the value of what is being overlooked – quality, trust, risk management, etc. Discuss the costs of the relationship failing or needing to replace an implemented system. Faster is not always better.

Silence is the enemy during international negotiations

Americans in business are very uncomfortable with silence. If you stop talking mid-conversation, your American counterpart will be at a compete loss for what to do next.

In Asia, this is often used as a negotiation tactic against Americans. They know that because Americans are desperate to get conversation flowing again, they will start giving away concessions in the negotiated deal. When there’s an extended silence the American normally assumes that they have said something that has not been well received and are trying to return to a state of acceptance.

By the way, silence is a tactic that I have seen work similarly on Israelis too.

Prepare yourself for friendliness on steroids

Canadians only need to visit an American department store to see friendliness used as a business tool. A store sales clerk will likely follow you around asking if you need help. In fact, it is often asked several times in the same store. This overt “friendliness” can be unnerving to international guests to the U.S., but it is a great example of friendliness in business.

Americans are taught from a young age that confidence and friendliness are traits they should cultivate.

This American openness is often appreciated in business settings, at least initially. But it can run the risk of being seen as insincere, especially when Americans talk about “getting together” and then don’t follow through on the expectation they set.

In working with Americans, it is important to set an appointment to follow through on action discussed. And if you trying to sell to American companies, be prepared to follow up with the company’s staff several times to move a step of your selling process forward.

I hope these insights help you to effectively engage and build strong relationships with American business people. If you have a particular situation related to cross-cultural communications and need advice, please feel free to contact me at: info@The-International-Entrepreneur.com.

Best wishes in all of your international business dealings!

The post These tips for working with Americans will make your interactions more effective appeared first on Trade Ready.

The second view suggests taking a holistic approach by managing domestic and international business as an integrated whole and considering both, in tracking the overall success—and value—of the enterprise.

There is no single correct model.

The first approach is particularly well suited to situations where a company evolves gradually from a domestic start-up to a viable venture to a credible business and then decides to explore international markets and options for expansion beyond comfortable domestic borders.

This model of gradual international expansion, however, is more likely to be the exception than the rule in today’s highly globalized business environment. Companies in knowledge industries, such as information and communications technology (ICT), biotechnology, professional services and others, tend to look at global opportunities very early in their lifecycles.

Evolving models of global sourcing, the increasing interconnection between trade and foreign investment and the increasing momentum of outsourcing and offshoring all combine to motivate companies to look beyond domestic borders—early and often—as attractive opportunities beckon, or powerful competitive forces compel. The issue is now less a matter of choice and more a matter of necessity.

What are the main strategies for a strong banking relationship?

Whether a company adopts the integrated model or the structure that delineates along domestic and international lines, there is a parallel debate about the nature of a financial institution or banking relationship for organizations seeking to do business internationally.

In some markets, banking relationships are “for life,” whereas in others, banks and companies alike take a very “transactional view,” looking at each proposed deal on its own merits.

Should a company—even a SME—consider keeping domestic banking and trade/international banking relationships separate, with different financial institutions?

Generally, and based on the traditional trade finance instruments, an importer is more restricted in decisions related to banking relationships. This is because a credit relationship has to be in place to enable the granting/provision of a trade finance product, which is typically based on an existing line of credit. Importers are generally restricted to dealing with banks where they maintain an account relationship.

Exporters, on the other hand, are much freer to select the bank they may wish to do business with, provided that the bank is able and prepared to transact under the trade finance instrument agreed on between the importer and the exporter, and provided that the role envisioned for that bank is acceptable to it.

The exporter could, in theory, change banks for every transaction. Perhaps more practically, an exporter could select banks based upon their risk tolerance (and/or pricing) in certain markets, or based upon industry or sector-level specialization at the banks, which can prove valuable to an exporter.

Should I stay or should I go?

Bankers will point out that there are also advantages for exporters that remain with their primary relationship banks in working through export transactions. It is true that the primary bank is more likely to act in the interest of an established client (as long as the bank’s other responsibilities in the transaction are not compromised).

It is equally true, however, that the expertise and capabilities required for a particular transaction may simply not be available through the primary bank, or that the bank cannot support business in a given market due to its own risk assessments or credit limitations. Determining factors will often be the country risk a bank is prepared to accept and the price charged for that risk.

Large corporate entities and multinationals can maintain a dozen or more core banking relationships across various geographic markets, even by industry vertical, given that banks do have specializations.

However, for SMEs, the question of how best to approach banking relationships is an important one. A bank’s willingness to finance or facilitate trade finance transactions will often depend on its understanding of the company’s entire business, and a smaller company that is expanding internationally may need to choose its banking relationships carefully.

Take a closer look at your bank’s priorities before making a final decision

A fundamental truth is that a healthy and positive relationship with a bank or financial institution can be a lifeline for a small business. There are risks to maintaining an integrated banking relationship: the bank could, for example, take possession of current account deposits to offset an expected loss on an export finance transaction where the importer has become insolvent; the benefits of building a strong, trust-based relationship with a financial institution over time must be carefully weighed.

“Shopping” the business to other banks can be beneficial in terms of securing lower pricing, but again, the benefit of establishing a strong relationship may be worth the occasional premium in bank charges.

The final answer is that the best model depends on the priorities of the company and the practical realities of dealing with bankers in a given market. Some banks claim to be SME-oriented, others try to be, and some succeed fully, and both sides of the equation—the client and the bank—matter.

Banks are under ever-increasing regulatory pressure to understand their clients’ business, and to be able to demonstrate that understanding at the level of individual transactions. This ongoing challenge for banks, arising from anti-money-laundering and anti-terrorism measures, as well as from numerous spectacular financial failures, will make banks hesitant to take on new clients without knowing the business well, first.

Banks that fail to demonstrate that they have undertaken appropriate due diligence to meet the Know Your Customer (KYC) standard can incur significant financial penalty.

Ultimately, the decision about the most effective banking relationship structure may come down to a combination of factors—the company’s objectives and requirements, together with the banks’ obligations.

The post Build the best banking relationship for your trade finance needs appeared first on Trade Ready.

But as an exporting SME looking to China, or an entrepreneur with sights set on President Xi’s “China Dream”, should we be worried? Not at all…

I moved to China in 2011 and spent just shy of five years living in Zhejiang Province in what has been the most prolific learning experience of my life.

In that time, I had the privilege of working, teaching, selling to, and studying with hundreds of incredible Chinese and foreign entrepreneurs all across the mainland.

With the ups and downs of being a young “Laowai” (outsider), I’ve been on a steep learning curve in what I consider to be a pretty unique combo of business experiences.

As such, I felt compelled to share some insights to other like-minded international entrepreneurs who plan to develop a new import/export-oriented venture on the ground, as a foreigner.

1) Make foreign universities your initial hub

We all know education has been a thriving industry in China (especially for the EFL market), but few outside the country know just how much progress has been made, and how cosmopolitan and aspirational some of China’s foreign campuses are.

More importantly, very few foreign companies have cottoned-on to how much of an asset these hubs of activity are for starting a business.

For me, it was the University of Nottingham’s campus in Ningbo. I initially studied there, and the sheer amount of local resources and support for launching a business (being right next to the port helped) was amazing.

The University of Liverpool has a similar set up in Suzhou, as does New York University in Shanghai.

Whilst you don’t need to study at these campuses to benefit, hiring interns from these schools full of local knowledge and social links, is invaluable.

There are always open seminars to go and speak at, whereby the campuses are always happy to have foreign companies or entrepreneurs in attendance.

I can promise you, the first few initial Skype calls you will make to set up a meeting and a flight out will pay off a hundred-fold a year or two down the line.

2) Build ‘Guanxi’ in the second-tier cities

As cool as the mega-cities are, and as much as I am infatuated with Shanghai, setting up a small office or having an informal base in one of the booming second-tier cities is a strategy for small exporters (or like me at the time, an importer) that especially benefits fresh entrepreneurs or SME’s with a limited budget to develop sales here.

These cities are considered small by Chinese standards, but are much larger in population than many of the biggest Western cities, and have booming consumer markets with deep pockets and insatiable desires for foreign goods.

Although this isn’t breaking news in itself, getting some traction for your products and finding some suppliers on the ground isn’t as crazy as it sounds.

Approaching Chinese business networks (local chambers of commerce) is a treasure chest of Guanxi building (a system of social networks and influential relationships that facilitate business and other dealings).

You very well may be the only foreign entrepreneur savvy enough to build relationships in such a direct way, and the locals will know it, and will be very keen to help you connect with whoever you need to find.

The foreign business clubs in the Tier-1 Cities tend to be more like social hubs that invite prominent people to give expert advice. This is also valuable, but usually more beneficial for larger firms.

Over the space of a few years of repeated networking in one of these smaller cities, you will have built direct links to sales networks to export to, and have the face-time that Chinese businesspeople value so much.

3) WeChat is an essential tool for exporters/importers

Some of you whom have been to China on business trips will know that this is the mother of all social networks. For those that aren’t familiar with it, Wechat is like Facebook, Twitter and Instagram combined!

With nearly a billion hands holding smart phones, and doing everything from banking and shopping to talking and browsing through this app, it really is essential.

As some of you will know, Facebook and Twitter are banned in the mainland.

Since these two are often a budding entrepreneur or SME’s best friend, I’d strongly advise downloading Wechat and playing around with it to see how it functions as a replacement.

I didn’t quite get to the stage of selling our wines through it, but if I got into importing beverages again, this is a prime way to drum up some interest.

You can even configure a small shipment of your goods at a port here in China to be hooked up to orders and sell straight out of the warehouses via Wechat (this is the next big thing for small firms wanting to export. We can explore this at length in another article).

4) Harness the benefits of competing provincial ports

One day Deng Xiaoping decided to take his grandson to visit Mao. “Call me granduncle,” Mao offered warmly. “Oh, I certainly couldn’t do that, Chairman Mao,” the awe-struck child replied. “Why don’t you give him an apple?” suggested Deng. No sooner had Mao done so than the boy happily chirped, “Oh thank you, Granduncle.” “You see,” said Deng, “what incentives can achieve?” (“Capitalism,”1984,p. 62)

It might seem like an odd concept at first, but foreign exporters (or importers if you set up an office here) stand to gain from the competition of provincial ports aiming to attract more activity to their port and trade zones.

Depending on what you are exporting, it can pay to see what schemes and incentives the local governments have to attract you to use their port.

You could land yourself a neat free showroom space in a free trade zone, often very swanky and modern.

There are many savvy local service firms you can hire to be your reps there, on an ad-hoc basis, when you arrange for potential clients to visit the showroom and see your stock – which if you are small and novice like we were, could be as little as a couple of pallets.

5) Export small first and embrace the unconventionality

I am a passionate advocate of learning by doing, and realizing you can scale things up when once your trials work (or most likely don’t! But that’s all part of the process!).

There is a tendency with all foreigners wanting to “Crack China” to limit themselves to only the famous, established channels. The impulse is to wait, and do so only once they are seasoned exporters or a well-established company.

I have met dozens of small firms in the U.S. and UK who are interested in China, and could totally bag some small initial orders with very little extra investment, other than their time and patience in dealing with Chinese buyers directly.

Partnered with targeted, strategic efforts and some on-the-ground savvy, it’s very possible to build a side project in export sales in China with a slight change in mindset to embrace some unconventional methods.

Being small and going direct is not for the faint of heart, but it is very doable with my tips in mind.

Depending on your goals, it may require a change in mindset from the traditional “Exports are for huge orders” thinking. Hold off on the big-trade shows and expensive agents for some longer term, Chinese –style business development.

I hope this helps folks! Reach out to me on Twitter or LinkedIn if you have any questions or want some more info.

The post Top 5 tips for international entrepreneurs from on the ground in China appeared first on Trade Ready.

Some are quick to state that by their very nature, SMEs are too small to penetrate Asia’s diverse and complex markets.

Others would argue that the current governmental policy framework is not offering the right settings to enable SMEs to take full advantage of these lucrative market opportunities in Asia.

And finally, the SMEs themselves, highly intimidated by the scope of business activities in Asia, simply do not know where to start.

In the recently released Building Blocks for a Canada-Asia Strategy, Stewart Beck, the CEO of the Asia Pacific Foundation of Canada, said:

The rise of Asia marks one of the defining shifts of the 21st century. Within five years, Asia will represent 44 percent of the world’s gross domestic product, 54 percent of the global middle class, and will consume $4.8-trillion (U.S.) annually – 42 percent of the world’s total consumption.

The launch of this document on January 28th at the Ottawa Forum is a timely and welcome initiative which, along with British Columbia’s new Raising our Game in Asia trade strategy, will help to increase Canada’s focus on Asia.

It delivers a clear signal to the private sector to take initiative and turn opportunities into successes in this dynamic and diverse region.

The importance of Asia to the future of our economy is unquestionable, especially in the context of Asia’s current shift from an investment-led economy to a consumption and service-driven economy.

Large-scale urbanization, the expansion of the middle-class and sustained economic growth are among the key drivers of future development and wealth in Asia.

This will translate into increasing demand across various industry sectors, such as: power supply and distribution, food production and logistics, and electronics.

But the biggest demand will be in service sectors, including: computer and IT, financial and insurance, engineering, architectural and science, resource and agriculture-related services, health and education services.

These trends should be seen as the ones providing solid opportunities for Canadian businesses.

However, Asian markets are becoming increasingly complicated to access, as governments and businesses all around the world focus on the opportunities in the region.

In order to be successful in Asia, Canadian SMEs will need to find ways to operate in a more competitive environment.

Asia is not all one market and Canadian businesses must not consider it as homogenous. Each country has different cultural traditions, languages, economies and governments.

One approach or market entry strategy is not going to work across each country, or even across different regions within the same country.

Understanding the parameters of various Asian markets from a political, social, economic and technological point of view is key for Canadian SMEs to succeed in this part of the world.

3 ways to help Canadian SMEs tap into Asia

When talking to SME managers, I often hear comments pointing out three key challenges they face when trying to do business beyond our borders, and more specifically in Asia:

• low confidence and lack of international experience
• lack of knowledge and poor analysis of the Asian markets
• lack of long-term commitment

1. Think bigger

The small and medium-sized businesses in Canada at all levels of development have a confidence dilemma. Why?

Because it takes a certain skill set to go from domestic to international operations, and to shift business-changing decisions like expanding internationally from the back of business minds to front and centre.

According to the 2015 report by HSBC and the Conference Board of Canada, Selling to the World: The Keys to International Business Success, the four factors allowing us to determine the company’s readiness to go global – and what HSBC calls “a global competitive advantage”—are:

1. Skilled executives
2. Market knowledge
3. The ability to innovate
4. International networks

Canadian SMEs who master these keys will be the ones capable of creating successful operations in the Asian markets.

While every part of the “global competitive advantage” framework is important, the most crucial component to boost the confidence of a small business is the company’s managers.

Talented executives can understand the challenges of expanding internationally, play an influential role in identifying international opportunities, and boost the company’s international competencies by recruiting experienced international business employees and consultants.

That type of “out of the box” and entrepreneurial vision is a big reason why, for instance, AMP Solar Group, an experienced rooftop solar project developer from Port Credit, Ontario, has done so well.

A couple of years after its incorporation in 2009, the company started a careful process of foreign market selection and has established quality business connections in the United States, the U.K., and expanded its operations to the Asian markets of India, Japan and Thailand.

Expanding to unfamiliar Asian markets was somewhat risky and uncertain for AMP –as noted in the December Business Report of the Globe and Mail by Dave Rogers, AMP’s President and CEO.

However, the company’s managers’ strong belief that the market for renewable energy was about to take off, coupled with their solid partnerships in the U.S. and the U.K., allowed them to make confident inroads in Asia.

2. Create your own global knowledge network

Market analysis is far from easy. This is even truer when the company is facing the challenge of targeting a completely unknown market with a high level of cultural and economic differences.

Unfortunately, too many companies are making business decisions based on just a “snapshot” view of the market, which is often inaccurate.

The pace of change is so rapid in Asia that the company’s plans become obsolete before they are even fully implemented.

A lot of market analysis could be biased and poorly made, which results in failure or misalignment of the company’s international strategy.

The managers of Canadian SMEs who aspire to be successful in Asian markets need to find a way to surround themselves with people who have been already exposed to Asia and its various geographic areas.

It is essential to identify who will be your sources of market information and intelligence. This could include taking full advantage of trade promotion agencies and their various market studies and innovative tools.

It may also mean an expanded network of Canadian and Asian consultants and experts. Having a globally oriented business spirit also includes being willing to get on a plane and be physically present in your new target market in Asia.

Prospective CEOs developing the necessary level of commitment for a given market in Asia should attend international conferences and trade shows and develop local contacts which could include new local hires.

According to Ken Shields, CEO of Conifex Timber, a Vancouver-based forestry products company, travel seems to be a must.

For companies that want to expand to China, he is advising to use trade missions which are an efficient way to make connections and to stay apprised of the country’s economic and financial plans and priorities.

3. Build your presence in the market

To successfully capture the opportunities in Asia, Canadian SMEs need to create foundations for deeper and broader relationships with a given market.

Physical presence and personal contact are viewed as real assets in Asia. Setting up a local office in Asia is the most effective way to conduct business transactions, whether with customers, suppliers or partners. This is also the best way to deal with governmental authorities.

Establishing a long-term presence and making the necessary investments help SMEs prepare for tough times and avoid being left behind. This type of presence is a key factor in dealing with the market volatilities.

It is a well-known fact that when China’s economy overheated in the mid-to late 1990s, some of the Western companies started to pull back and only a few anticipated the staying power that was needed to weather the market storms.

China and other Asian markets will no doubt witness new periods of turbulence in the future, as their economies continue to grow.

A long-term presence is also a key factor in developing the necessary level of connectivity with Asian markets. There is presently a tendency to rely too much on technology to fulfill the need for communications.

However, Asian cultures, diverse as they are, have a particular preference for personal contact to establish trust and good reputation.

Nautel, a Nova-Scotia-based manufacturer of radio broadcast transmitters, became international thanks to its innovative business model using an extensive network of sales partners around the globe.

These sales agents, partners or independent contractors – according to Kevin Rodgers, the company’s President and CEO, “are the people on the ground who can interact directly with clients.”

Nautel has been relying on their sales partners’ knowledge of local language, customs and regulations, and proactively leveraging their strengths, connections and knowledge, in order to expand its business beyond Canada’s borders.

Today, Nautel operates in 177 countries, including many in Asia. The company is still on an expansion path, this time to China, one of the few countries Nautel is not yet in, says Rodgers. Nautel has recently entered into an agreement with a sales partner there.

Entry into Asia’s national or regional markets requires adequate resources on-the-ground to facilitate the company’s transaction-based commerce and selling via multinational value chains.

A lack of in-person presence, investment in local human capital, and long-term commitment to the market, may not be simply sustainable in the Asian context.

Therefore, it is understandable why so many foreign companies, which are our competitors in this part of the world, are busy growing their presence in Asia and planning to position their businesses for success in the Asian business ecosystem.

The post Build successful Asian market entry strategies with these 3 tips for SMEs appeared first on Trade Ready.

Karolina Staszczak, CITP|FIBP, is an Office Manager for SPLICE Software Incorporated, a SaaS company that focuses on Human-Voice Messaging, based out of Calgary, Alberta.

Her passion for international business has already led her to explore several fascinating opportunities in Europe, and she looks forward to developing those partnerships further in the future.

Following a global passion instilled at a young age

With a Polish background, Karolina’s parents instilled in her a strong sense of her cultural heritage from a young age by explaining and celebrating cultural holidays and enrolling her in Polish language classes.

“Every two or three years we visited family in Europe, from when I was a child through to high school, travelling around different countries. This experience introduced me to the idea of working in international business.”

I am fascinated about learning new cultures and discovering the differences in lifestyle and communication, and this led me to enroll in the BBA program at Mount Royal University, focusing on a minor in International Business.

One of the big draws to the Mount Royal program was that the school offered FITTskills courses. Karolina appreciated that the courses were available both in-class and online, allowing import/export professionals to study in the way that works best for them.

She also found the course organization, delivery and material to be extremely helpful in meeting her long-term career objectives.

“The courses flowed nicely, they all tied into and built upon each other, and touched on every aspect of doing business internationally. The textbooks were also easy to read, and I have retained copies of all the materials to use as a reference when the opportunities arise.”

Keeping an open mind to tackle new and exciting opportunities

After finishing school, Karolina was eager to expand her knowledge with hands-on working experience, and found an intriguing opportunity with SPLICE Software as a Process Coordinator.

With a smaller staff, she’s had the ability to take on many different tasks and build her experience quickly, one of her favourite parts of her job.

While her role originally focused on reviewing existing business practices and policies to find ways to improve efficiency, she quickly familiarized herself with the company’s products and services. Before long, that knowledge translated into the chance to expand her responsibilities.

I started preparing funding applications for government projects and partnership programs – something which I have grown to love doing, and look forward to when they come up!

After a year, she was promoted to her current role as Office Manager, which allows her to play a big role in the company’s customer and employee relations, as well as funding applications, international partnership programs and market research for potential business growth in Mexico and Europe.

Using her market entry skills to make big inroads in European markets

Many of Karolina’s favourite career stories and proudest moments came out of these opportunities, particularly the responsibility to identify new opportunities for SPLICE Software in Europe.

“A key standout was attending the Canada-Holland Digital Innovation Event in Calgary. This was put together in partnership with the Canadian Embassy in the Netherlands.”

It was a great chance to leverage what I had learned in the classroom and apply it to potential business opportunities for SPLICE in the Netherlands, while networking with business professionals within Alberta and across the globe.

Karolina’s efforts developing connections in Germany have been among her most important, and have borne great fruit for the company so far. Karolina was involved in writing the company’s Alberta-Germany Collaboration Fund application, as well as preparing SPLICE for the Germany Matchmaking Symposium to find new business partners.

Working with Trade Commissioners and representatives of the Albertan government, she forged relationships with several promising start-ups and other partners.

“We connected with a company that was interested in selling our solutions. This led to the preparation of a press release, hiring of an external sales team and the translation of a portion of our website and marketing materials.”

“Although this expansion has been put on hold due to other time sensitive projects, it was an amazing experience to be a part of and confirmed why I had chosen this career direction.”

Using her experience to become an elite international business professional

As soon as Karolina finished her degree, she knew that earning her CITP®|FIBP® designation was an important career goal. It was both a chance to challenge herself, and to prove that she was using everything she learned in the FITTskills program on an everyday basis in her career.

After officially earning her designation, she is enthusiastic about the ways that having it will help her continue to grow her career prospects.

“I believe that having this designation will set me apart from other professionals within the industry. With the CITP®|FIBP® designation being recognized within the U.S. and Europe, it works as universal recognition, which I believe will help in building a strong foundation of networks around the globe.”

It also confirms her continued passion for the industry, as well as her desire to have an international mindset and be part of a community of global professionals.

Receiving this designation is a bit like a bonus for just doing what I love. Being a part of this community of talented and successful individuals is an honor. The benefits and resources are endless and I am looking forward to being able to tap into this fountain of knowledge throughout my career.

As she goes forward in her career, she plans to remember that with her strong foundation in international trade, it is important to her to always remain receptive to new ways of doing things.

“I have really learned to keep an open mind. Every international project is unique and there is no one way to go about it.”

“It is crucial to know your corporate story because international business is all about telling that story in different ways – ways that will affect different people, countries, and cultures differently. Having a solid foundation of what you are trying to solve is really important.”

With a strong set of skills, a determination to succeed and a positive attitude, Karolina will continue to build an incredible career for herself, and we look forward to hearing more about it.

The post Karolina Staszczak, CITP|FIBP – Office Manager appeared first on Trade Ready.