How Do You Succeed in International Business?

David Cameron, his coalition Government and the various Government Development Agencies are all encouraging, if not pushing, UK businesses to export more to achieve the growth required and close the gap in the Balance of Payments.  

So! How do you succeed in international business?  Here are some of the things that I’ve learned having been responsible for leading, establishing, acquiring, selling and undertaking business in the following thirty plus countries worldwide over the last 27 years:

• North America (Canada and USA)
• Trinidad
• South America (Brazil & Venezuela) 
• Europe (Norway, Denmark, Holland, France & Spain)
• FSU (Russia, Sakhalin, Azerbaijan, Kazakhstan, Georgia)
• Middle East (UAE, Saudi Arabia, Oman, Kuwait, Iran)
• India, Africa (Egypt, Libya, Algeria, Nigeria, Sudan and Yemen)
• Far East (Malaysia, Singapore, Indonesia, China, Japan)
  Australia

FIRSTLY ASK YOURSELF WHY & UNDERSTAND THE RISKs

Before you set out to internationalise your business, you first need to ask yourself Why and understand the risks involved.  Internationalisation is normally higher risk, more costly & much harder than finding more clients and business in existing markets / nearer to home.  However, if you’re determined that it’s the right thing to do then below are some of the things that you need to think about.

INTERNAL HEALTH CHECK

Before embarking on any overseas / international expansion you must first undertake an internal health check!  You should check things such as:

• Are you (as the leader) personally fit to undertake overseas travel and sustain the hectic schedule?  
• Is you business fit?  
• Do you have the right & competent resources to undertake the international business development?  
• Are your processes & systems suitable, scaleable & accessible remotely?
• Do you have resources to backfill and / or cover?  
• Do you have a plan?
• Is your brand fit?  Will it internationalise and / or transend numerous cultures?
• Do you have sufficient funding to sustain your internationalisation plans? 
• Do you, or any of your team, have any knowledge or experience or doing business internationally? 

If the answer to only a few of these basics is No, then I urge you to stop and seek advice and help first.  It could be a costly mistake if you get it wrong including losing your business!  I’ve seen it happen!

FOCUS ON A FEW MARKETS

You should focus on a few markets, rather than a scattergun approach!  You need to develop a clear criteria for the markets that you will / are able to penetrate and do the necessary analysis.  Perhaps use the SE / Dti "Country Scorecard" tool.

RESEARCH, RESEARCH, RESEARCH

Before you consider setting off in any particular direction you first need to undertake extensive research.  Check out the SDi, FCO, SE, World Bank websites amongst others to learn about the countries, the business culture, how to do business and useful contacts

STAMINA & COMMITMENT 

Be aware that an incredible amount of stamina and commitment are required!  You need to keep going forward and not give up when you meet with problems or suffer any setbacks.  I can assure you, you will!  

IT WILL TAKE LONGER AND COST MORE THAN YOU THINK 

Beware! It always takes much longer and costs much more than you originally think.  Whatever the number you first think of, triple it and you might be nearer the final number required!  So you’ll need to ensure you’ve got sufficient cash funds available to finance this just like any other investment.  You also need to be realistic in setting your plans.  Don’t try to ‘bite off the elephant all in one go’!

PRODUCT OR SERVICE FIT

Make sure your products and services fit the target market and / or taylor your product or service to suit the individual market needs.  'One size suits all approach' does not work.  You must do your research!

THE POLITICS, VALUES & WAYS OF DOING BUSINESS

You need to be very aware of the politics, values and ways of doing business of the differing nations and cultures / religions. Ignore these at your peril.  Also, be aware of the local mafia (literally at times)!

Make sure you are fully conversant with local business structures, laws, labour practices plus taxation and money transaction rules / laws.

LANGUAGE & EMOTIONS

Watch out for language challenges!  Just because they speak english, doesn’t mean they understand us, like us, or are open to do business with us!  Equally, it doesn’t mean that they do business in the same way!  You also need to learn to keep your emotions in check.  Some nationalities and / or cultures watch your body language and deliberately provoke you to elicit a response and test you!

PERHAPS USE A PARTNER

In the first instance, it is sometimes easier to find & use a partner that is local or has done business successfully there for many years!  However, finding the right one can be a challenge in itself!  Beware, there are many rouge companies out there that feed off newbies who don’t know any better!  Improve your odds and use the UK DTi, SDi and GlobalScot networks for advice and local introductions.  There are often grants available too!

THINK GLOBAL BUT ACT LOCAL

From my experience you will only finally make some traction and get some successes if you have a local presence, even if it's virtual.  It’s essential that you develop local marketing materials including the local language and don’t just issue corporate english marketing materials.  Everyone prefers to do business with local people, including us!

ENSURE YOU PLAN FOR SUCCESS

You should always develop a plan because as they say, “if you fail to plan, you plan to fail!”.  Or as the SAS would say, “Proper Preparation & Planning, Prevents Piss Poor Performance” (The 7P's).

FINANCIAL RISKS & OTHER RELATED CONCERNS

• Getting paid in reasonable time or at all, can be a challenge
• Watch out for currency exchange fluctuations
• Make sure you control your travel policy and costs.  Costs can mount up. It's not a holiday! Consider & use alternatives.  Use experienced travel agents. 
• Don’t forget to ensure you’re fully covered with insurances including, in some cases, Kidnap and Ransom insurance.

A SUGGESTED LOW RISK STRATEGY!

I believe that the best (lowest risk) internationalisation strategy is to follow your existing clients, partners and / or do business with people you know and trust.  Even then things don’t always work out!  Going on a DTi, SDi or SCDI Trade Mission can sometimes be a safe first step.

If you’d like to understand more or want some help with preparing or executing your internationalisation strategy and plans, then please contact me for a free and confidential initial conversation. 

Murray Strachan

Murray works with executives, funders and shareholders to recover & create value!  You can contact Murray via his website www.murraystrachan.co.uk or follow him on twitter @murraystrachan

Fundraising For Early Stage Businesses

A number of months ago, I was asked to provide (from my perspective and experience) an overview of the fundraising life cycle and stages for young and growth businesses to members of the Entrepreneurial Exchange.  

There are seven main stages that I’ve observed within the life cycle / process!  These are highlighted below along with some of the key points of note and/or factors to be considered:

STAGE 1 - Establish the NEED

• What stage the business is at will determine the nature of the funding required and which category and specific funder you need to target
• No substitute for research & more research
• Who should you approach & Why?
• It’s best to approach local and specific funders
• Timing is key!  Are the funds open? Do they have funds?
• Also consider whether you need Support & who might be best suited to provide it

STAGE 2 - Are you INVESTOR READY?

You need to ask yourself are the following credible about your proposition:

• Vision / Idea
• The Business Plan
• Is it Researched?
• Differentiated?
• Tested?
• Is the product Wanted / Needed?
• Right Timing?
• The founder / The Team
• Passion
• Experience
• Are the founders & executive personally financially committed & locked in?
• Realistic Financials?
• Prospective Return - High Growth not Lifestyle business
• Realistic expectations from Execs in terms of salary & No special terms for them!
• Realistic Valuation
• Is the proposition Capital Efficient?
• Are the Exit Routes identified
• Is there a simple share / legal structures etc

STAGE 3 - NETWORKING & COURTSHIP of prospective funders

• Who & How
• Do you need help & warm intros - Yes!
• Takes time! 3 to 6 months plus
• Beware Investors Talk to each other
• Preliminary Sales Pitch / Testing the water!

STAGE 4 - THE PITCH

• Adopt the 7P’s - see separate blog “Making The Perfect Pitch” 

STAGE 5 - FOLLOW UP / CLOSE

• Must follow -up! They’re busy and getting approaches from many others!  Don’t wait for them to get back to you as they may never!
• They also may initially say No!  Consider how you can save it by adopting another approach / angle!

STAGE 6 - DILIGENCE

• Akin to the worst and most invasive of medical examinations!  Unavoidable and necessary!  It’s an essential part of the investors / funders process

STAGE 7 - TERMS / COSTS

• You will likely be provided an initial Term Sheet or Letter of Offer.  Once you’ve agreed this and the outline terms, then a formal Investment Agreement will be produced.
• Unlike VC’s, Business Angels are now moving to a more standard approach.  LINC, the Scottish Business Angel Association are leading this.
• Be aware there are many standard terms (Indemnities, Warranties, Disclosure, Covenants etc) that are not unreasonable for someone taking a risk on you / your business, that you will have to accept if you want the investment.  However, make sure you get appropriate legal, financial and commercial advice.
• There will be costs involved!  Arrangement & Monitoring Fees potentially plus you will be asked to pay for or at least contribute to their Legal, Financial, Tax, Diligence costs for doing the deal with you!  Can be up to 5 to 10% of sums raised!

You’ll need lot’s of STAMINA and PATIENCE too:

• It’s not easy! It’s a hard and long process with potentially many lows! 
• You need to have determination, perseverance & stamina
• Don’t give up!

 A couple of other (not insignificant) ISSUES you’ll need to think about:

• Who’s running the business and progressing the plan whilst you’re out trying to get funding?
• You’re going to improve your changes of securing funding if you seek the right help at the right time!

Murray Strachan

Murray works with executives, funders and shareholders to recover & create value!  You can contact Murray via his website www.murraystrachan.co.uk or follow him on twitter @murraystrachan

So what is it that drives you?

One of the key characteristics of successful entrepreneurs is that they have a high level of personal drive combined with a strong determination to succeed!  

A high personal drive is critical to achievement in that it’s one’s personal drive and determination that turns dreams into reality, converts ideas into action and then it’s from this action that the desired results will be achieved (eventually)!  It’s also this drive and determination that: keeps you and your project on course when the desired results or your goal(s) take longer to achieve; or things get tough; or even when you suffer the inevitable set back or failure.  Of course, success is often also related to a complete (to the exclusion of everything else) focus on the achievement of the particular result or goal(s).  As an entrepreneur and/or leader, it’s often your personal drive and determination that sets the tone for those around you, helping push the organisation and/or project forward towards achieving the desired vision and goal(s).

I believe that we all have some form of personal drive. Some people focus on obtaining educational degrees, others building a family, some starting and succeeding in business and others something completely different.  However, the key to any enhancement of a person’s drive seems often to be where extrinsic motivational factors are found in the goals that they’re attempting to achieve, such as wealth creation, business reputation and prestige.  

I’ve often been asked where my drive come from?  I’m not exactly sure!  My mother and father tell me, that as a child and teenager, I was always on the go, had high energy and low threshold of boredom.  Nothing’s changed then!  My father even went as far as saying that I didn’t know how to relax (until recently).  Perhaps my drive comes from watching and copying my always busy parents, based on the premise that ‘monkey see, monkey do!’  Or is it from learning through sport that only the brave and hard working usually win? Was it a strive for wealth creation and a better way of live?  Is it a fear of failure? Or is it success itself in that once you’ve had a taste of success it becomes addictive?  For me, it’s probably all of the above in varying degrees, as well as many other factors that only several meetings with a friendly occupational psychologist and confidant named Graham, might shed some light on!

So, what is it that drives you?  I’d be interested to hear!

Murray Strachan

Murray works with executives, funders and shareholders to recover & create value!  You can contact Murray via his website www.murraystrachan.co.uk or follow him on twitter @murraystrachan

Some ‘golden nuggets’ from Richard Branson's book titled, "Screw it, let's do it"- lessons in life

I’ve just finished reading Richard Branson's (quick read) book titled, "Screw it, let's do it"- lessons in life.  A great little book full of what I call ‘golden nuggets’ of lessons and advice from one of Britain’s leading entrepreneurs.  

Many of us are inspired by Sir Richard and I believe he is the epitome of an entrepreneur who ‘works hard and puts something back’.  Amongst many things he’s involved in, or with, he is Honorary President of the London Entrepreneurial Exchange (www.londonentrepreneurialexchange.com) and is also a Hall of Fame member of the Entrepreneurial Exchange in Scotland (www.entrepreneurial-exchange.co.uk)

Sir Richard summarises his approach to life and business in “Just do it. Think yes, not no. Challenge yourself. Have goals. Have fun. Make a difference. Stand on your own feet. Be loyal. Live life to the full!”

A copy of the book can be found via this link to Amazon.  A highly recommended read! You never know, Sir Richard might just inspire you as he has me and many others!

The ‘golden nuggets’ that I’ve drawn from the book and resonate with are:

A belief in setting goals. 

It's never a bad thing to have a dream but you must be practical about it!

I set goals and then work out how to achieve them.  I want to do well and not half heartedly.

“Just to do it... and never give up”

The best lesson learned was ‘just to do it”

The beginning is the most important part of any journey! "A journey of 1000 miles starts with that first step"

Whatever it is you want to achieve in life, if you don't make the effort, you won’t reach your goal!

You have to believe it can be done

I don't believe that the little word "can't" should stop you.

There are no prizes for being second – "... The Victor takes the spoils!"

I learned to keep trying and to never give up!

Whatever your goal is, you will never succeed, unless you let go of your fears and fly!

Don't waste time – grab your chances!

Have a positive outlook on life

Have a positive outlook on life. When it's not fun, move on!

There are no rules to follow in business. I just work hard and believe I can do it but most of all I try to have fun.

It's not always easy! When you have goals and a positive outlook on life, you have something to aim for. 

Hard work and fun is what life is all about. 

As soon as something stops being fun, I think it's time to move on. Life is too short to be unhappy.

Calculate the risks, take them and never regret it!

Calculate the risks and take them. Believe in yourself. Chase your dreams and goals. Have no regrets. Be bold. Keep your word.

You can take care and try to avoid the risks, but you can't protect yourself all the time. I'm sure that luck plays a very large part. It's easy to give up when things are hard but I believe we have to keep chasing our dreams and our goals. Once we decide to do something, we should never look back, never regret it!

I set my goals and stick to them. Success is more than luck. You have to believe in yourself and make it happen. That way others also believe in you.

Be glad when you win. Don't have regrets when you lose. Never looked back. You can't change the past. But try to learn from it.

Whatever your dream is, go for it. Always beware if the risks are too random or too hard to predict, but remember, if you opt for a safe life, you will never know what it's like to win.

Challenge yourself

Aim high! If you challenge yourself, you will grow. Your life will change. Your outlook will be positive. It's not always easy to reach your goals but that's no reason to stop. Never say die. Say to yourself, "I can do it. I'll keep on trying until I win".

Try new things. Always try. Challenge yourself. I like the challenge of looking for new things and new ideas. To me, the search is fun.

You can achieve almost anything – but you have to make the effort.

The writer and mountain climber, James Ullman summed it all up when he said something like, “Challenge is the core and mainspring of all human action. If there is a ocean, we cross it. If there is a disease, we cure it. If there's a wrong, we right it. If there's a record, we break it. And if there's a mountain, we climb it”.

The winner takes all! Chase your dreams!

Love life, live it to the full and do the right thing

Love life and live it to the full. Enjoy the moment. Reflect on your life. Make every second count. Don't have regrets. Regrets weigh you down. They hold you back in the past when you should move on. So, even if sometimes you get things wrong, regrets are wasted and you should move on.

Money is important. But the bottom line is, money is just a means to an end, not an end in itself.

Put family and the team first. Be loyal. Face problems head on. Money is for making things happen. Pick the right people and reward talent.  

One thing I always try to do is keep my word.  Be respectful. Do the right thing. Keep your good name. Be fair in all your dealings. Don't cheat – but aim to win. Never do anything if it means you can't sleep at night.

Change the world, even if in a small way. Try to make a difference and help others. Do no harm. Always think, what you can do to help.

Murray Strachan

Murray works with executives, funders and shareholders to recover & create value!  You can contact Murray via his website www.murraystrachan.co.uk or follow him on twitter @murraystrachan

Some other lessons from 25 years in business!

At the conclusion of the annual entrepreneurial lecture at The Robert Gordon University in Aberdeen earlier this year I was asked to provide any other key lessons that I'd learnt from 25 years plus in business.  After consideration my response was that:

• you need to be always selling (yourself and your business) and that if you "make a friend you’ll make a sale"!
• you need to surround yourself with quality people!  If you fly with the crows you're likely to be shot.
• you should ensure you have good counsel - NEDs and best experts & today’s man rather than yesterday’s.
• if you get out-with chartered territory you become exposed to external elements and unforeseen factors
• it was essential that you maintain values and common sense
• you need to learn to trust your gut!  Plus, if it looks too good it normally is!
• there are days, months or years when things don’t happen for you.  That’s life!  You need to learn from these situations.  Things will change!
• you don’t need to be ruthless to be successful in business
• first impressions are critical

Murray Strachan

Murray works with executives, funders and shareholders to recover & create value!  You can contact Murray via his website www.murraystrachan.co.uk or follow him on twitter @murraystrachan

Some advice to aspiring entrepreneurs

I was recently asked to give some tips to some aspiring entrepreneurs on how to succeed as an entrepreneur.  In addition to having, or developing, the right attitude and behaviours (see my previous blog "It’s not just about attitude & behaviours, or is it?"), I advised them that unfortunately there were no short cuts, magic bullets or special pills that could be taken and that:

• they needed to be be prepared to, & serve a broad & varied Apprenticeship in business
• there is no substitute for hard work. If it was easy, everyone would do it!
• they need to keep their eyes and ears open for opportunities - looking for gaps in the market or problems that can be solved or things made better?
• they should ideally look for low capital intensive and highly cash generative opportunities
• persistence & patience are crucial. It won’t happen quickly
• sometimes imagination is more important than knowledge
• building personal networks is key
• they have to get good with financials & cash management
• they need to keep learning and stretching themselves

and finally in the words of Bill Cullen I advised them that “Your future just doesn’t happen. You Create It!”

Murray Strachan

Murray works with executives, funders and shareholders to recover & create value!  You can contact Murray via his website www.murraystrachan.co.uk or follow him on twitter @murraystrachan

Entrepreneurs can learn a lot from Sport!

Entrepreneurs can learn a lot from sport and successful sports men and women. As an example:

• You need to put more time and effort into training and preparation if you want to succeed. "The more I practice, the luckier I get" Gary Player 
• Determination - never giving up and turning things around.  A perfect example of this was Novak Djokovic's recent thrilling semi final battle with Roger Federer at the US Open tennis tournament, where he came back from two sets down and two match points against him to eventually win in five sets.
• Always striving to improve
• Competition is inevitable and you must learn to cope with the pressures
• If you work hard, keep doing the right things, then at some point you’ll get a break that will change things!
• If you want to succeed, you need to push yourself, endure some pain
• You have to be focused & make sacrifices to get to the top
• There will be setbacks!  It’s how you deal with these and recover.  A perfect example of this is how Rory McIlroy was earlier this year able to deal with, and recover from, a horrible final day at the US Masters to then win the US Open a few weeks later by a considerable margin.
• To win, you need reliable people, processes and technology but “to finish first, you first need to finish” Jackie Stewart

Murray Strachan

Murray works with executives, funders and shareholders to recover & create value!  You can contact Murray via his website www.murraystrachan.co.uk or follow him on twitter @murraystrachan

To become a successful entrepreneur! It’s not just about attitude & behaviours, or is it?

Another question I was asked to address as part of the annual entrepreneurial lecture at The Robert Gordon University in Aberdeen, earlier this year was "To become a successful entrepreneur, is it just about having the right attitude and behaviours?"  

My colleague at the Entrepreneurial Exchange in Scotland, John Anderson was quoted in a recent interview with a national Sunday paper as saying that "entrepreneurship is a state of mind".  Now, whilst I agree entirely with the sense and wider context of John's comment (as we have debated this point many times), I believe that it's important to note a number of essential factors that contribute to this "state of mind", i.e having the right attitude and behaviours.  These include:

• having the essential knowledge, skills, abilities and attitude (KSA's) and being able to apply them in the most appropriate way
• early life influences greatly shape your personal DNA.  Certainly was for me!

• parental background & involvement (+ve or -ve)
• the values that are instilled &/or adopted (e.g. hard work, honesty, fairness, respect, competition, always do the best you can, caring for others)

• a good education &/or training (including in life) are crucial
• sport & exposure to competition at an early age can be a catalyst 
• the taste of early success &/or failure is essential and character building
• early role models (good & bad) will shape you, including early jobs and bosses

Murray Strachan

Murray works with executives, funders and shareholders to recover & create value!  You can contact Murray via his website www.murraystrachan.co.uk or follow him on twitter @murraystrachan

So what’s entrepreneurship all about?

Earlier this year I was honoured to provide the annual entrepreneurial lecture on behalf of The Centre for Entrepreneurship at The Robert Gordon University in Aberdeen, to the final year students and representatives of the local business community.  One of the questions I was asked to address in my presentation, in addition to describing my entrepreneurial journey (so far), was "What’s entrepreneurship all about?  In summary, I believe it's about:

• being a bit of a dreamer & envisaging something that others perhaps cannot
• spotting the (right) opportunity and being brave enough to go for it
• having the belief and not being scared to think big or stretch yourself
• having the ambition to build a business of substance and scale 
• being able to communicate the vision and compel others to follow
• having a plan but being prepared to shape or change it as circumstances dictate
• execution, execution, execution & delivery of results
• having the drive and determination to succeed against all odds
• learning from mistakes
• choices, sacrifices and a lot of “blood, sweat & tears”

Murray Strachan

Murray works with executives, funders and shareholders to recover & create value!  You can contact Murray via his website www.murraystrachan.co.uk or follow him on twitter @murraystrachan

What are the key success factors for taking the business forward after an MBO?

I was recently interviewed by Michelle Rodger of the Scotland on Sunday about my thoughts and experience of management buy-outs (MBO’s).  Over the last decade, I have been involved in both leading and advising on a number of MBO’s and /or management buy-in’s (MBI’s).  The most significant of which was the MBO (in 2003) of The RGIT Montrose Group, a leading provider of HSE & specialist training solutions to the international Oil & Gas Industry.  One of the questions Michelle asked was, “What are the key success factors for taking the business forward after an MBO?”

I believe that the key success factors for a MBO are largely the same for any other entrepreneurial opportunity.  These are:

• a clear vision and deliverable plan.
• belief, passion, drive and determination amongst the MBO Team.
• clear and visible leadership.
• an ability to communicate the vision and compel others to follow.
• having a clear plan but being prepared to shape as you go and /or circumstances dictate.
• being ruthless with costs and “passengers” - cutting deeper and then building back to give yourself a chance at the start.
• rapid and significant improvement of processes, procedures, systems and management information.
• ruthless cash management - "every pound is a prisoner" and “Cash is King"
• pay down loans as quickly as possible to give yourselves head room.
• prepare a 100 day plan and address all the key issues quickly to provide a stable platform for future growth.  You need to be ruthless & very focused.
• get complete control of the business. Stir it up and make it clear to all that things have changed and a new regime is in place.
• tighten authorities and develop a new commercial culture where "every pound is seen as a prisoner".
• build the best team around you and ensure that they are totally aligned in every sense!
• execution, execution, execution and a clear focus on the delivery of results.
• develop good relationships with your funding partners ensuring clear, early and open communications.
• get energy and enthusiasm into the whole team and get them behind the MBO team and plan. Make sure they all know what's in it for them!
• constant and consistent communication of progress to all stakeholders.
• lastly be prepared for a lot of hard work, difficult choices, sacrifices and a lot of "blood, sweat & tears".

Murray Strachan

Murray works with executives, funders and shareholders to recover & create value!  You can contact Murray via his website www.murraystrachan.co.uk or follow him on twitter @murraystrachan