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.
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