Whatever decisions you make in life, you can get them right or wrong, partly or wholly. It is no different in selecting who you do business with. However, you can do a number of things to make any risk a calculated one based on facts, figures, and reputation, and therefore minimise the degree of risk to your own business.
In PART ONE of this Tale, Om and Joseph demonstrated a hunger and persistence that encouraged belief in their dedication and will to succeed, and risks were taken in both cases by the companies who gave them a chance. Both risks were minimal and were calculated risks. Om was prepared to finance the purchase of machinery and he did, and our company at that time had no alternative options to sell into Dubai. It was a case of either do it or back off. There was no financial risk, but there was a risk to our reputation should Om have turned out disastrously. At first, Joseph operated as a Sales Agent for the German tooling manufacturer, so he had to win orders and ensure that payments were made before he received his commissions.
The US distributors continued to sell our machinery because we knew they could not get it anywhere else. They continued to sell for our European competitors, so it wasn’t ideal but suited us at the time. Both continued to whinge about the other but there was plenty of space in town for both of them. Our Nigerian friend has stayed in touch and may be of use in future years, so actually none of the cases from PART ONE of this article brought us to a complete dead end.
I only got to know the Nigerian in 2011, but before the advent of the Internet company verification could be quite a challenge. Now we have the luxury of online credit checks, Google Streetview, and a whole host of other information sources that go some way to help us establish whether or not a company is a good or a bad risk. The flip side is also true. Companies and individuals who are a bad risk use the Internet for a range of activities, both innocent and fraudulent.
So you start with two rules of thumb: if it sounds too good to be true then it probably is; if you have even the slightest doubt, check, check, and check again and do nothing if doubts persist. Below are 20 questions that I have used over the years to help verify new enquirers:
1. What is the street address of your company?
2. What is your website address?
3. What is your company registration number?
4. How many locations does your company operate from?
5. What is the main business of your company?
7. How many years have you been selling into our market sector?
8. What is your company turnover and how many people do you employ?
9. How many sales people do you employ?
10. What territory do they sell into?
11. What market/industry sectors do you target?
12. What complementary product ranges do you sell?
13. What competitive products product ranges do you sell?
14. Do you have your own warehousing facility?
15. What Trade associations do you belong to?
16. What Industry publications do you advertise in?
17. What is the scope of your online advertising?
18. What exhibitions do your company show at?
19. What are your main sources of sales lead generation?
20. What sales turnover can you generate for our company in the next 12 months?
What would your company’s 20 questions be? Of course you don’t need to ask all of them all of the time, but it is useful to ask four or five of these to provide you with a basic understanding of who you are dealing with. You know best what your company requires from an overseas partner, so build your own checklist based on that knowledge. Alarm bells should sound if companies are not prepared to answer reasonable questions, and some will not respond at all. Those who do tell you some or all of what you want to know are generally worth pursuing.
Be aware also that there are occasions when you can run through all possible checks but then still can’t tell! That’s when you have to rely on instinctive judgement, gut feeling. And that’s what it was always like 20+ years ago, and it remains an essential skill in appointing any new business partner, especially internationally.