Growing your business often means entering the international marketplace but it can come with risks
Are you thinking about expanding your business operations to other countries?
More and more American companies are partnering with businesses overseas. For example, in the Asian commerce market.
Expanding your business overseas has multiple advantages.
It allows you to grow your company beyond U.S. borders and makes it easier to meet the changing needs of your customers.
Partnering with foreign companies can help you stay current with the latest trends, expand your product offerings, and improve your bottom line.
While these are all advantages, without performing your due diligence you can also run into problems.
The Importance of Researching Potential Partnerships
Why is company due diligence vital to the success of an overseas partnership?
The answer is simple. It helps ensure you are partnering with a company that will help you reach your overseas business goals.
Some companies, regardless of their location, may overstate their abilities or qualifications.
Others may not follow processes and practices that fit your brand image.
All business owners understand how vital brand reputation is for their company. One misstep can harm your business’s overall image.
Thankfully, you have tools that will help you decide if the partnership is the right move for your business.
Take Advantage of All Available Tools
Consumers, regardless of their country, often turn to the BBB (Better Business Bureau) when researching an American company.
The BBB assigns companies a rating based on consumer experiences. It’s an effective way to research U.S. businesses, but the agency does not typically cover companies located overseas.
Don’t worry, you have other tools to help you perform due diligence on almost any overseas company.
Almost all companies operating in the Asian market have licenses issued by their respective countries.
Checking to see if the company holds a valid business license is a good step to take in your research.
Be prepared to wait a little bit for a response. Typically, it takes a few business days or longer.
Company due diligence also involves researching supplied references. The references can be consumers or the company’s fellow business associates.
When a business is not willing to release its references, it’s typically a red flag.
Another tool not commonly used is checking with your potential partner’s bank.
The amount of information you can legally receive is limited but you can learn if the company has any warnings of potential fraud.
Remember, a global partnership is only beneficial when both companies are trustworthy.
Tips on Gathering Information
International laws regarding company research are generally non-existent. It helps to keep the global market flowing smoothly but it can also increase your risks.
Be proactive in your research. Don’t wait for a potential partner to release limited amounts of information.
Creating a questionnaire is often an effective method. To reassure your potential partner your business is capable of holding up its end of the agreement, attach your answers to the same questions.
Verify the supplied information and get ready to enjoy a mutually beneficial partnership.