Business without borders: how Russian companies can enter the international market

Entering new markets allows the company to get new customers, expand the geography of its presence and increase profits. That is why many Russian entrepreneurs strive to enter the international level with their product. The task is difficult, but solvable.

Ilya Likhov, the founder of NEOSUN Energy, spoke in his opinion column about what should be considered during international expansion.

Ilya Likhov, 34 years old, was born in Novosibirsk, graduated from the Faculty of Physics of Novosibirsk State University. In 2015, he launched his own production of solar panels and power plants, new generation lithium-ion batteries, and energy storage systems in China. The company's products are supplied to 16 countries, including the Middle East, China, Europe and Latin America.

Want beyond the borders

Entrance of Russian companies to the markets of other countries — it is only a matter of their will. I believe that business in any country operates mainly on the same principles. And, observing them, you can develop your business in other states.

No intermediaries, in my experience, are needed here. It is even easier for those who provide services to start working in the international market than for those who sell goods. There are international platforms where they can find orders. That is why now in Russia the main export is services (if you do not take into account the export of raw materials). First of all, these are IT services, website development, software development, etc. In many cases, companies are located in a small city like Tver or Podolsk, but provide services to large corporations. And they make good money.

Those who have their own production will have to think about exporting or look for partners in a new country for themselves. But all issues are solvable if you approach them carefully.

 Learn English

Most often, all business negotiations with foreign companies begin with something informal — personal meetings of top managers or owners, for example, when they go out to dinner or lunch together. There is a rule in business etiquette: first, a meal and easy communication, and only then business.

I believe that the leaders of Russian companies need to know English. Without it, building a business abroad will be almost impossible. Therefore, English — must have. He today — the language of international communication, trade, business and science.

When it comes to major deals, the manager most often takes part in the negotiations. And in those cases when he comes with an interpreter, especially for an informal lunch or dinner, it does not look very comfortable for a potential client. Because you always want to talk directly, and not through an interpreter. For the head of the company, knowledge of English — it is the ability to create and control international business, as well as the efficiency of employees and the quality of their work.

In most cases, English is more than enough to do business in any country. Companies that buy or order services on the international market understand that for successful cooperation they themselves need to know some language. Therefore, most customers can already speak English — albeit not very good, but nonetheless.

Until recently, the main difficulty in working with China was the language barrier. But now the percentage of Chinese who speak English is much higher than the percentage of Russians who speak English. For example, all sales people in factories in China speak English fluently. Therefore, entrepreneurs who know this language have no problems communicating with the Chinese.

Assemble an international team

To do business at the international level, the project team must not only know English, but be fluent in it. Ideally, an international — employees from different countries who know English and who will help in the development of your project.

NEOSUN Energy's team includes specialists from the Middle East, Latin America, and China. In most cases, employees from other countries come to us themselves, because our business in the field of alternative energy sources attracts attention in principle.

It is very difficult to find specialists with the level of competence we need in Russia. For example, in our country there are no highly qualified engineers, but in China and other countries they are. Their labor costs more than in Russia. But I, as the owner of the company, do not proceed from how much an employee costs me, but from what benefits he gives to my business.

Respect the rules of business etiquette

Traditions that exist in many countries, for example, in China or the Middle East, are increasingly fading into the background when doing business. Business communication often comes down to Anglo-Saxon traditions. Standard rules of business etiquette, money and mutually beneficial agreements rule in global business.

In Asia or the Middle East, there are some peculiarities of business etiquette, but they are insignificant. For example, in China, business cards are served with both hands and at the same time they lean forward a little. If you give a business card with one hand, it looks somehow casual and dismissive towards your partner.

And when doing business with companies from the Middle East, you should consider when they have major religious holidays. For example, throughout Ramadan (the month of obligatory fasting in Islam, during which you can eat and drink water only before sunrise and after sunset - editor's note) you should not schedule business lunches.

The myths that Chinese partners always drag out negotiations or do not comply with the agreements reached are just myths. It is much more comfortable for me to do business with partners from China than with Russian businessmen: in most cases, the Chinese work without delays, since their business processes and logistics are well built. If they pull, then most likely they are not interested in you, but they are embarrassed to refuse you.

If you are interested in Chinese partners, then they themselves will contact you, call, write, etc. Today, the Chinese honor their "Made in China" brand gradually transforming it into "Made in China", and many Chinese companies care about their brand and their reputation.

If something goes wrong in cooperation with the Chinese, then either they are not interested in working with you, or you are dealing with some small and frivolous Chinese company. There is also a third option — you somehow behaved incorrectly during the negotiations, perhaps you tried to "squeeze out" too much; price partner.

If you behave culturally, proceed from a win-win position, when your negotiations are beneficial to both parties, then you can count on respect and that everything will be done on time. And the country or nationality of your partners does not play a big role here.

Consider your pricing policy

I recommend for international business to have a different pricing policy for different regions. I'll explain why.

Representatives of the Arab countries bargain very strongly, and one should prepare for such behavior of partners. You will be asked about the discount throughout the negotiations, up to the stage of invoicing. I had cases when clients from the Middle East called me from the bank and said that they were going to pay the invoice we had issued now. And at that moment they asked to "reset" thousand dollars of the total. When I refused or offered to "throw off" $500, they still paid $100 less than we agreed.

When this happened to me for the first time in 2016, I didn't know how to react to the situation. I called the client and asked what was happening, to which I was told: “Well, why are you so worried about $ 100?” Given that the amount of the transaction can be from 100 thousand dollars, these 100 dollars will not play a role, of course. But for me it looked a little strange that the official invoice transferred the amount less than it should be. When I realized that this is, in principle, a normal situation when working with representatives of the Middle East, I began to take it easier.

Don't expect quick results

There is no need to have illusions that when entering the international market, the company will succeed immediately. As with any business, it can take years to develop your brand name. It may take 2-3 years for a company to gain experience in a new country or region, find customers, bring its product in line with the requirements of another state and the preferences of its inhabitants.

Companies that export products or manufacture them in the country of presence will have even more difficult times. They need to either find a local partner or open their own representative offices. Finding partners, checking them, getting to know them — all this takes time.

Prepare money and resources

You need to understand that any new market requires the time of a business owner or company leader. He should be focused on solving this problem. Therefore, it is very important that all processes in the Russian business of an entrepreneur be built. Otherwise, you cannot cope with work on two fronts.

It is necessary to have a team of specialists who will deal with entering the international market. Perhaps this team will be separated into a separate project or a company with its own marketing.

One more moment — This is money. It is required to invest in promotion in a new market. Do not forget about the team of specialists working in this direction. In the first year, they most likely will not bring results, and they will have to pay for the whole year. This means that your investment in the payroll during this period will be an investment in future growth. And all this can cost you quite a lot of resources.

If we are talking about exports, then we will come to the need for certification of products in the countries of presence. When we started working around the world, we received certificates in those countries where we operated. Of course, it cost serious money. Often our costs for certification exceeded our costs for marketing. Therefore, it may make sense to start international expansion from some simpler markets.