International Expansion: Why Look Beyond Germany?
Currently, the question of international business relations, especially with the USA, is highly topical. Without wanting to go through the economic situation in Germany once again, it can be said that it is currently a good idea to look beyond the German horizon if you want to expand your business.
A branch in the USA is characterized by numerous questions in advance. It is not primarily about organization, administration, legal matters or taxes (all of which can be considered necessary trivialities), but about the classic demands for growth: sales, new customer acquisition, raising capital, networking. Thomas Watson Sr., who was considered the world’s best salesman in his 40 years at IBM, said it best: “Nothing happens until a sale is made!”
Chambers of Commerce vs. Private Sector Support
So who will help the entrepreneur onto the trading floor? Although one might think that such requirements for a project would be in good hands in the private sector, many do not initially trust the offers from the private sector for onboarding in the USA, but turn to the Chambers of Commerce and Foreign Trade Offices, which of course operate organizations in or with the USA. But is this really the better way?
Rather not, it seems! If you talk to the clients of the privately run service providers, there are many among them who, as “burned children” of the Chambers of Commerce, have fled to the providers from the private sector. The points of criticism that one hears again and again are stereotypical: High retainer fees without transparency and little concrete performance (if you want to consider general Excel spreadsheets with unqualified contacts and non-actionable leads).
Even if the statement just made has turned out to be somewhat striking, the (foreign) Chambers of Commerce often fail to provide their clients with hard-hitting proof of performance on the basis of predefined KPIs, detailed and comprehensible proof of activity and transparency in remuneration. In short – they too often act not like proactive service providers, but sluggishly like authorities! As I said, these are by no means just assumptions, but strikingly identical complaints from former clients of the Chambers of Commerce and Foreign Trade Offices.
The Critical Questions Every Business Must Ask
The litmus test for the meaningfulness of cooperation is quite simple: If you ask even one of the following questions:
· Did they help me generate sales?
· Assisted in raising capital?
· Did they help me win new customers?
· Contributed to expanding the local network?
… with “no”, the conclusion is obvious. The analysis of why this is the case would clearly go beyond the scope of this commentary. In general, it can be said that the same applies here as in all other areas of the economy: If risks and responsibilities are not equally distributed on both sides, success is in question!
About the Author: Ulrich Schmidbauer
Ulrich Schmidbauer has been in the consulting business for 35 years and is a contributor and advisor to US Trade Consult, a U.S. market entry and business consultancy based in Austin, TX. As Senior Advisor European Desk, he devotes a significant part of his work to analysis and conceptual work for European companies with U.S. branch offices or expansion plans.