Going International With Services

One of my Solutions Forum clients was recently approached by a fairly major Chinese store design firm to explore a partnership on using some of my client’s rather innovative store designs, particularly in small spaces. I thought it would be useful to recap some of the advice I gave them, as applied to services.
1. Don’t expect to do a deal on the first visit, which is much more of a sizing up by the Chinese, and should be for American firms, too; actually getting to a deal might take two or three trips;
2. Research who you’re dealing with, their position and what their ethical practices seem to be; also ask the US Department of Commerce to do some research for you on the companies your considering as partners, and what their reputation is in their home countries; the Department of Commerce will also do research on who the competitors are to the firm with whom you might be dealing;
3. If you don’t have trademark protection in China, or other foreign countries, get it before going, or at least get it in process. While Asian countries are reportedly getting better about respecting intellectual property, they still have a ways to go.
4. Don’t worry too much about patent protection; in fact, we know of some companies who purposely don’t seek patents because they don’t want to expose design or materials to prying eyes.
5. Trust your gut on whether you should do a deal with your proposed partners. Handshakes are not recommended, but Memoranda of Understanding are probably ok, until a legally binding relationship agreement can be done.
Much of what I’ve posted isn’t related to purely international service businesses, and should be taken to heart by anyone contemplating international expanion (our course E18), which starts from the premise that you’re starting international expansion yourself, rather than being approached.