Getting started overseas

BRW Fast Club members who have expanded their businesses overseas pass on there experience and advice

BRW: How do you identify export markets? So you’re sitting in Australia, you know you have a local market, what do you do next to get overseas?

Drew Dickson of Drew Dickson Architects: Our first foray was into China and that was purely by accident because we were invited to do a one-off project. Identifying markets was more just hearsay and reading up on the areas that seemed to be hot and exciting for architects and construction companies to be – obviously Dubai and India.

BRW: How did you get into the joint venture there? How did that happen?

Dickson: You’ve just got to keep showing up. We go to boat shows. I tell people in the first three years, they won’t take you seriously. It took us six years to do the deal with UAE after we went down the track with three different companies.

Jennifer Zanich Myriad Group: Picking up the phone and calling people, when they weren’t even specifically in the market I was in. It wasn’t until I was actually in the US that I found a couple of fantastic networks, such as Forum for Women Entrepreneurs that was visibly targeting females because fewer than 3 per cent of women were getting funded for businesses.

Emanuel Perdis, Napoleon Perdis Cosmetics: We first looked at the UK. But when it comes to consumer goods, you want to position your brand globally and Hollywood’s a more influential trendsetter in terms of prestige and fashion. As hard as the market is to crack, I think it’s a diamond mine. Every store, everything that we generate in publicity in Hollywood has a three or fourfold effect here in Australia.

BRW: How did you crack Hollywood? Do you just knock on doors?

Perdis: I’m still cracking it. We’ve been stung by bees. The honey pot isn’t there yet. It’s like we’ve just had a few tastes. I do just knock on doors. There are people whose sole job is to find celebrities to turn up to your party – that’s all they do. And there are people who just focus on product placement and product drops. There are people who just focus on event PR. If Sigourney Weaver’s throwing a party, they can get you into that party. A network of contacts is so important because they’re the ones who will help you make it once you get there.

John Hogan, Superior Jetties: It’s interesting that three of us were expats in the US. They have a much better system of growing entrepreneurs over there: they celebrate it. They actually assist their competitors to be successful. They’ll take very much a view of “we’re strong in this market ... here’s a leg up”. What we found out was that the more you put into the trade organisations, the more you get back.

Roger Olds, Coffey International: We’re not quite Hollywood. We have been working overseas for 50 years, at first on a project basis. We would go to Papua New Guinea and do a project, come home again – it wasn’t really what I’d called export. Then our strategy became remaining a specialist in the fields we work in and to go global. So for us, it was about where to go. We tried Asia first and failed. So we said, “let’s go to more Western-thinking countries”.

BRW: Do you actually need to be there? Do you need a joint venture with Indians in India?

Olds: Ask fundamentally, why are you going there in the first instance? Why do you want to export? There’s so much market in Australia and you can lose a lot of money overseas.

Perdis: We hit a saturation point in Australia. For our prestige line there are only so many department stores you can be in. We knew that by our 12th year we would be at saturation point. We also knew that being in America would help the Australian business in terms of brand. I believe your local market should be your first hit because it is extremely expensive to export and set up

operations and deal with the problems there. For every dollar it takes to solve a problem here, it takes you almost three to four dollars to solve it there.

Zanich: We built here specifically for a US market because once we profiled the demographic and the typical user of our product, people who were social-networking aware – all the social networking companies and all the people I needed to hire who understand the social economy – were in the US.

At that time, the dollar was pretty low, so it was cheap for us to have engineering here. But all business functions and marketing and the market were in the US. We knew that Australia would lag by some years.

BRW: Do you need to have an actual physical presence where you are?

Dickson: Yes. That’s the hardest thing for us – we don’t have someone there full-time. It is chicken and egg. You need to put someone there, particularly in Abu Dhabi, and it’s probably going to cost $150,000 to $200,000 a year to get the right person. We have three people visiting on a rotation and we’ve got a serviced office so that people can ring a local number. The next step for us is to find someone who can represent us properly and put them there full-time. In the Middle East, they don’t like using email because they might make a mistake in the English and they’re a very proud people. The best way is just to be on the phone as often as possible.

BRW: Should you find a local or just send someone over?

Olds: Trying to use the expeditionary model does not work in the Middle East. Being present in the market costs a bomb but it’s an investment you’ve got to make. Then you have to have a partner, too. In places like the Middle East, if you don’t have a local partner, it’s hard work.

BRW: How hard is it to go into different cultures, to put your values on them?

Zanich: It comes down to localise, localise, localise. It’s not just about localising your packaging, it’s about localising your company, your approach, your business. It’s everything – even your business card.

Hogan: We’ve got better at finding the person to trust in another country. It’s the biggest point where the governments can help, the people who are physically present in the country. We were told to change our name, abhorrent to us in trying to build a global brand. But we went to the Shanghai Boat Show as the Royal or Holy Golden Marina Company. It’s the best we’ve ever been because we looked Chinese. We were also told not to be there with all the other Westerners; locals would be scared to talk to anyone because of their English. Get outside where all the Chinese boat builders are.

Dickson: We were given exactly the same advice when we went to China. They said no one will understand the Drew Dickson Architects business; call yourself Happy Sun Golden Architects because the Chinese will understand it.

BRW: The worst mistake you made?

Dickson: We picked up a business manager out of the phone book. He was based in Dubai; we wanted to set up in Abu Dhabi. It cost nine months of grief.

Perdis: The biggest mistake dealing with English-speaking countries is assuming they’re similar to us. They are so, so different.

Olds: Appreciating cultural subtleties – recognising that the Philippines, Malaysia, Hong Kong and Thailand are completely different cultures for doing business. Aussies tend to gloss over stuff and that “she’ll be right”.

Hogan: Managing growth. Once you grow, it becomes more complex. So all of a sudden it’s not a $100,000 job; it’s a multimillion-dollar job. And you’ve got a joint-venture partner and you’re in another country and they want everything that Australian companies can bring to the table: beautiful product, great engineering. Oh, by the way, you have to match whoever is the lowest anywhere else in the world. And after all of that, the rules change and you find you’re in another market.

BRW: Are there better, easier areas to export to?

Zanich: It’s product-driven. Everybody in California has a smart phone. Our opportunities are in constrained mobile markets such as Latin America and India.

Dickson: We have an associate company in Delhi. We outsourced our last project to them, doing the documentation for a $70 million Sydney project. Their understanding of our methods of construction and detailing and so on was as good as we would get here, for a fraction of the price. We can see ourselves handling the project from Sydney, getting it documented in Delhi and having it built in the Middle East. That’s an area we’re going to try.

Olds: It’s complex. Brazilians say they are like us: like to party, like sport. You can communicate despite the language. But bureaucracy there is very difficult. That’s why I think the networking concept of learning from other people in your industry is valuable.

BRW: When starting in a new country, what’s the one thing that you must do?

Dickson: You have to persevere at it, be patient and just put the effort in. It’s hard work.

Zanich: Network, network, network. Find the people who have the arrows in their back, who have done it before.

Olds: Understand why you’re going there. Without a reason, it’s too easy to give up.

Hogan: Always select a country and spend time there with your feet on the ground; learn the money trail.

Perdis: Make sure your base at home is really strong because the Australian operations will have to support a lot of expenditure.

BRW

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