There are many reasons for a company to go international, and certainly internationalization is a huge opportunity to expand a business. Adopting an overseas expansion strategy, however, can be a challenging task.
Among the many decisions to be made, one of the most crucial involves choosing the right business partner within the target market. Finding a foreign business partner goes far beyond a simple collaboration: it involves forming a solid strategic alliance and sharing goals, resources, and risks.
A reliable and well-chosen business partner can offer in-depth knowledge of the local market, simplify operations, accelerate market entry and increase success chances, while also helping to manage cultural challenges.
So let’s see what are the main ways to identify the ideal foreign business partner and maximize growth and development opportunities in the chosen market.
Key requirements of the right overseas business partner
Today’s business relationships have become much more fluid and companies want to have more and more direct control over the end customer, however, in most cases when it comes to internationalization of businesses relying on a foreign partner remains crucial.
But how to choose a business partner abroad?
Sharing strategies and goals and having adequate sales volumes are the basis. In addition to this, key criteria to be met by the business partner will need to be established, and these will vary from case to case, for example, industry experience and technical expertise, or reputation, or even distribution network.
In addition, the foreign partner will need to ensure:
- Active presence in the local market;
- Willingness to devote time to partnership nurturing;
- A distinctive business model to emerge from competitors;
- A suitable budget to ensure adequate brand visibility and promotion;
- Sharing a similar vision and corporate culture;
- The greatest possible degree of autonomy, with a view to common goals.
The business partner must actively share the fate of the internationalizing company, otherwise it would only be an intermediary. The relationship between business partners must be an equal one.
In the light of this, the company expanding abroad will need to spend time training and coaching the partner as if he or she were an internal resource, as value transfer is essential.
How to find a foreign business partner
The first way to find a foreign business partner is definitely to attend trade shows in the relevant industry. In particular, it is useful to search within the exhibitor lists on the websites of trade shows that distributors usually attend: exhibiting companies generally are more willing to invest and may be more open to launching into an international partnership.
In addition to visiting over trade shows, space can be purchased on websites and in trade magazines to make oneself known within the market, a move that must be part of a structured communication plan that includes creating content of interest to the target market.
It will also be useful to leverage existing connections and professional networks to obtain referrals and recommendations on possible reliable business partners. In addition, searching targeted keywords in LinkedIn, can also be an option to get in contact with professionals and the companies they work for, or run a search using trade associations services in the relevant industry.
Of course, once we have identified the professionals or companies we are interested in, a careful selection and in-depth analysis will have to be done.
Good practices for a successful international partnership
After identifying potential partners, some meetings and initial interviews should be arranged to better assess the actual matching potential. On these occasions, you will need to discuss goals and expectations, explore skills and competencies, and assess the commitment level they are willing to devote to the partnership.
When choosing a foreign business partner, it is also critical to assess all risks associated with the partnership and to ensure that clear and detailed legal agreements are in place to define roles, responsibilities, intellectual property rights and exit terms in a formal and detailed manner.
If possible, it is a good idea to start with a trial period or a trial project to assess the effectiveness of the partnership before proceeding with a full and binding commitment.
Then, once the partnership is effectively established, performance should be monitored on an ongoing basis and goals achievement should be evaluated. If necessary, adjustments should be made to maximize results, always maintaining open and transparent communication with the partner.
Choosing the right overseas business partner takes time, effort and a rigorous evaluation, but investing in a wise selection has the advantage of leading to a solid partnership that will enable your company to thrive in the international market.
Are you aiming at successfully expanding your business abroad? Are you looking for international partners but don’t know where to start?
Then get in touch with no hesitation!