Dynamic Business

Hitching up
Having selected a partner, you still need to be vigilant about the details—from drawing up a contract to protecting your intellectual property. Keeping the lines of communication open at this point counts the most. Both parties must understand all aspects of the partnership they are entering.

“Both written and oral communications are important,” advises Robards. “Patience is also an important aspect when dealing with a partner with a complete different cultural background.”

Also remember that your partner will also be looking at your business to see if it is a good fit for theirs. “Potential partners normally seek a product or brand that is unique and/or well known in Australia,” says Robards.

Harcourt nominates “a commitment to your product and service, and an ability to innovate constantly” as attractive to an overseas partner. And strong internal operations, he adds: “Treating your workers really well matters. If you’re going to be a good employer, chances are you’re going to be a good exporter and good at international business as well.”

But as with most relationships, it’s not just the match on paper that’s important, it’s genuine commitment from both parties. “Someone who has long term commitment to your product and long term commitment to Australia really helps,” says Harcourt, and that goes for seekers as well: “The best generic advice is to be persistent—don’t run off when things go wrong.”

The match box

Thoroughly research a prospective partner.
Know their business and ensure it fits well with yours. Make sure your partner has experienced and talented staff in your product area or industry and an effective marketing strategy to help sell your product or service. Look at their website and any associated marketing collateral.

Understand their financial position.
Before entering into a business relationship, research the financial status of your prospective trading partners or agents. Look at revenue, costs and cash flow, and talk to key financial officers. Where possible, obtain copies of financial statements. Look for sustainable profitable growth, not short-term turnover. Where financial details are not available, consider using prepaid payment terms, then progress to letters of credit and possibly to open account payment terms once you’re satisfied with the trading history.

Be aware of the risks in dealing in your prospective partner’s country.
Have knowledge of local conditions and regulations in your trading partner’s country. Some of the main risks are country, political and industry risk. Take advantage of information and assistance from government agencies such as the Export Finance and Insurance Corporation (EFIC), the Department of Foreign Affairs and Trade (DFAT) and Austrade.

Make sure your contracts are clear.
Ensure you fulfil all of your responsibilities under local law. Get legal advice so contracts with business partners are both valid and fair. Also, make sure all of your actions are legal in Australia and in the export market.

Build relationships in person. Nothing beats face-to-face relationship building, so visit the overseas market you are looking to export to and meet with prospective partners.
—Andrew Skinner, head of trade and supply chain, HSBC Bank Australia