Despite your status the need to capture revenue and expand lines of business is a constant concern for any entity irrespective of its size standard, location in the market or previous industry prowess. For growing businesses, expanding into new markets is an exciting but often strategically daunting process. Without a physical presence in that 'new area of business,' building up street credit or 'Past Performance' can be sometimes be next to impossible.
For many companies, pursuing opportunities on their own outside their area of expertise is a nonstarter. However, creating a joint venture or strategic partnership with a qualified, compatible company with like-minded leadership can overcome otherwise insurmountable growth obstacles.
Both government and commercial customers prefer to award business to local suppliers and service contractors.
Here are five tips for your international partnership recruitment strategy:
1. Partner to meet contract terms. In many countries, qualifying for a specific contracting vehicle is mandatory for you to be considered as a potential supplier of goods or services for government or crown corporation business. For example, in the United States, RFPs are often set aside for small businesses below a certain revenue or employee count.
When a business has a suitable solution to meet a customer’s needs but cannot qualify under the terms of the mandatory contract vehicle, a joint venture with a qualified business is often a lucrative means to an end for all parties.
2. Don’t lose business because of the 'unknown factor. Over the years I've found the only difference between a successful company and one who fails is two things: the leadership of the successful company does only the things that they are 'Great at' while the leadership at the failing company 'chases everything' and never accomplishes anything. To that point - one must 'ask the right questions' and also understand what may not be visible, but able to take deliberate, calculated risk(s) in order to grow your business. Forming a Joint Venture (JV) is no different, remember on paper a JV is a 'legal entity,' however in real life, the paper is only as good as the people who sign it.
3. Understand that incumbent vendors have a higher propensity to win. Both government and commercial customers prefer to award business to a 'KNOWN' entity. Ever heard of the saying 'I will also go with the devil I know, vice some new guy?' This saying is true in federal procurement.
Growing companies should seek out opportunities for joint ventures or reseller relationships with companies who have been in the desired market/space and have 'built' up client intimacy (affective relationships) with customers that you'd like to serve at some point.
4. Leverage existing relationships. Does your product or service address a quantifiable need and complement the needs of companies overseas? You’ve likely heard that it’s easier and less costly to sell to an existing customer than to one you’ve never done business with.
People buy from those they know, like, and trust. Even if your business cost(s) more, the phrase 'best value' truly means - One is willing to pay more for less risk(s), and better performance. As a CEO/Leader you should put as much emphasis on your BD team to capture new work (with unknown entities/clients) as you do leveraging your existing customers and building new lines of business.
5. Do your due diligence on partner prospects. Before (and after) engaging potential partners in discussions about joint venture relationships in foreign countries, be sure to do a thorough vetting process to ensure the resellers or contracting primes you align with have a good reputation and aren’t already representing your competitors locally (unless they are ending those relationships to work with you).
You don’t want to share your intellectual capital with a service provider and then have it turn on you shortly thereafter. Ensure you have an internationally enforceable partner agreement in place, with termination provisions if either side isn’t satisfied with the relationship.
You don’t want to share your intellectual capital with a service provider and then have it turn on you shortly thereafter.
Accessing a new market through partnerships and joint venture contracts can be a great long-term strategy—or even act as a first step toward expanding your company into other countries.
Remember, your partners become an extension and a representation of your brand overseas. Build relationships with other companies and teams that have a vision and business acumen that are similar to your own.
Contact Federal Government Experts, LLC today to understand how to leverage the JV aspect of building new business. Our experts have helped businesses developed various JV's in the pursuant of new business.