How to spot an international business fraud

Many firms are rushing to get their products and services overseas ‹ giving rise to charlatans who try to take advantage of the situation. Trading companies and consultants materialize that seem to be able to fix anything for you overseas.
Here are some telltale signs of fakes and frauds:

“I know everyone in China”
China has quite a few people. While the international English-speaking business community is astonishingly small, the idea that the entire country is ³covered² is preposterous. It¹s amazing how many firms fall for it.

“I have a brother in Russia”
Does this mean your brother knows how to do what we need done in Russia? And does it mean that if you have a local relative, we¹re guaranteed success? How do we verify this?

Referring to a “partner” when they mean a “supplier”
Many times, consultants will tell you all about the “partners” they have in Asia, when they’re really referring to a factory to which they’ve given work. Always ask for a definition of “partner.”

“I’m doing you a favor by taking you on as a client”
This is insulting.
All businesses need clients, and without them, there is no business. Why was this person pitching you if they didn’t want you as a client?

“My wife is from India; she can handle the negotiations”
Is your wife a seasoned international negotiator? If ethnicity and skin color alone make one an international business expert, why not hire the foreign-born waiter who served you lunch?

“I know the international market”
There is no such thing. Anyone using this terminology is expressing ignorance. Do they mean Ghana or Bulgaria? There are hundreds of international marketplaces; grouping them together just doesn¹t make sense.

Taking you into introductions too quickly
There’s an enormous relationship aspect to doing business in almost every country. Hence, the client and vendor must trust each other, as the vendor is risking the loss of long-term overseas relationships.

The one-trip promise
If anyone really can sell into a foreign market with only one sales trip, then give me their phone number. In 25 years, I’ve never seen it happen. Promising it to a client is implausible.

Working in all countries
According to the United Nations, there are 192 countries, plus 61 territories, on the planet. Hence, the notion of one “go to person” for all of these is ludicrous. While many vendors can be connected in many countries, it’s impossible to be connected in all of them.

Working in all disciplines
“International” is an adjective. Expertise has to be quantified into some type of functional discipline, whether it¹s finance, human resources, law, marketing, technology etc. You wouldn¹t send a production supervisor to market in your home country, so why would you do it overseas? Some of us can have more than one area of expertise, just not all of them.

Stating that their technical skills will transfer abroad
Selling in France is very different than selling in Chicago. Managing people in Kansas has almost no similarity to managing Czechs. People who claim their skills are interchangeable with overseas needs obviously have never worked overseas.

“My buddy at the Korean restaurant can get us into Korea.”
If your buddy is an international market entry specialist, than what is he doing serving bulgogi (Korean barbecued beef) and cleaning up with a bus bucket? How could anyone make that leap?

No grasp at all of culture
Business is about people. If you want to work with people from other cultures, then you must understand them. When culture is glossed over or downplayed, one has to doubt the success of the vendor.

Meyer the buyer
If you have a vendor that¹s been purchasing coffee mugs in Taiwan for 20 years, then use him to purchase more coffee mugs. Don’t hire him to market your product (he¹s a buyer, not a seller) or solve complex overseas issues.

Not willing to prepare and educate you
International business involves education, expectations management, coaching of executives and management of negotiations. A true intermediary will insist on doing these activities mentioned. The best client is one who understands exactly what will happen, and why it’s happening.

Trying to keep too much “mud” in the relationship
Again, when the parties don’t get to know each other, it’s a recipe for disaster. The true intermediary in international business needs to feed back market intelligence, let you know their foreign counterparts and be as transparent as possible.

It’s too good to be true
If it seems too good to be true, then it probably is. The same wisdom holds true for your domestic endeavors. When a vendor can do absolutely everything and has no limitations, then it’s a fairy tale.

Bill Decker, managing director of Partners International, which consults with firms on global business and creates partnerships in foreign countries, can be reached at [email protected]

Technorati Tags: , , ,