I recently reviewed an online tool for managing sales teams and running sales meetings. The technology wasn’t overly complicated, and a manager could expect his people to be up and running on the software after some pretty light training. It seemed like the perfect tool for a US-based owner or manager to stay in touch with his Chinese managers and salesmen.

There’s a ‘BUT’ coming, and a lot of you experienced with China know what it is. “But…you have to figure out a way to make sure everyone uses the system”, is one good answer. And that brings us to the topic of today’s discussion – about communication styles and international management.

Chinese managers and Western managers communicate differently – even when they are both speaking the same language. We have different attitudes towards communication and information. Chinese managers have a terrible reputation among western managers for being difficult communicators. New hands will chalk it up to language issues – naturally Chinese speakers are uncomfortable using English, and that must account for their reticence to share information, right? Well, anyone who walks down Shanghai’s Nan Jing Road or remembers XiangYang market knows that Chinese aren’t shy about using English or sign language to get their point across – if they are motivated to do so. Likewise, a Chinese manager with an advanced degree from a US school will often forget how to operate the telephone-machine when he has bad news to report.

If you are an expat or international manager in China,, you have to develop a system for communicating with your China managers. Here are a few issues to be aware of:

Technological solutions and barriers. KISS – Keep it simple, sonny. You will be tempted to try sophisticated technological solutions. Your Chinese managers will happily experiment with a new platform or technology every week if you let them. I train salesmen for a living, and those two industries (sales and training) have been trying to improve the effectiveness of communication for years and years. I’m going to let you in on a little secret – NOTHING compares to a live, face-to-face meeting for effective information exchanges. If face-to-face is impossible (as it is for most of you on a regular basis), then a two-way phone call is the next best thing. Video conferencing is nice if you have the technology and the bandwidth, but it always feels like a gimmick to me. Hi-tech solutions like Webex and Salesforce.com are great – AFTER you have set up a routine system for conference calls. I would NOT recommend trying to use high-tech solutions for human problems. Put a regular system in place first — then install the gee-whiz gadgetry.

Regular and Systematic. The most effective system is something like this: Every Tuesday at 10:00 AM Shanghai time. Rain or shine, hell or high water. Hold that conference call no matter what – even if you have no issues to discuss. I once worked for a sales manager who constantly postponed and rescheduled our sales meetings. We quickly learned that the meetings were a low priority, and before long they were completely disregarded. I know of sales managers with people posted all over China who still hold regular conference calls. If you follow the routine, so will your Chinese staff. If you don’t, they won’t.

Don’t ask, don’t tell. Once little quirk of old-style Chinese managers is a tendency to try to evade responsibility by not painting a complete picture of the local situation. The old joke about the Chinese manager who didn’t tell the US-based owner that the factory burned down, “because the owner didn’t ask” is a bit over the top these days (I hope), but you will find that Chinese managers don’t volunteer information as readily as your US staff. Develop a good set of metrics that will tell you the whole story, and make sure the data is gathered, checked and transmitted regularly. Remember – a Chinese person may not consider withholding vital information to be dishonest. He may feel that it is simply not his place to say anything.

Cultural differences. I hate that phrase, because it ALWAYS seems to be an excuse for poor performance and missed goals. BUT when you are working with China you have to be aware of a few significant differences. Chinese people tend to hate voice mail, and haven’t always been big fans of email either. They, on the other hand, wonder why you can’t seem to work a fax machine or figure out how to send an SMS. On conference calls, you’ll grow old before anyone volunteers a comment or question. How do you deal with this? Send agendas in advance, and make sure you use a return-receipt to confirm everyone gets the message. China is still a very bureaucratic place, and once you develop a set procedure and routine your Chinese staff will follow it religiously – BUT if you are relaxed about the schedule then it will fall apart pretty quickly. Send an agenda in advance with all the points you want to go over. Let them know what you’ll be talking about. If you are picky about following up, your team will be too. If you let things slide, then they will slide.

Multiple channels for information and data. This is a big issue, and Old Hands have learned the hard way that if you rely on one person to gather, filter and deliver ALL of your China information you are never going to get the whole story. The best management information systems involve a variety of data flows that overlap and confirm one another. You head of HR and Finance should be communication directly with their China counterparts. If you are getting all of your information from the Country Head, then you are hearing a single viewpoint. If you are lucky, everything may work out great. If you are smart, you will develop multiple channels for collecting data and distributing information.

China’s business centers have become much more sophisticated and complex in just the last few years. If you are a newcomer, you’ll have to take my word for it – Shanghai and the other big centers have really raised their game in a hurry. This is a double-edged sword for new ex-pat run businesses. On one hand, localization of products and services is getting easier as market research and bilingual expertise becomes available. The downside? Your costs of doing business are skyrocketing, and the degree of competition for both market share and mindshare have intensified.

Anyone planning to succeed in China is going to need professional help – of the consulting, outsourcing or freelance variety. (Psychologists aren’t common here yet, so if you need the OTHER kind of professional help you are best off finding a nice understanding bartender.)

You should decide on what SPECIALTIES and CORE COMPETENCES you will need.

There are 3 kinds of specialists in China.

1) Industrial or business specialists.

Examples include:
A sourcer who is an expert in the textile industry.
A business entry consultant who specializes in software or marketing.

2) Client specialists.

Examples:
A logistics consultant who speaks Chinese and Spanish specializes in helping Spanish-speaking clients handle China-bases sources.
A project-management firm founded by German and Chinese engineers works with German electronics companies to supervise OEM contracts.

3) Geographic areas.

A real estate developer specializes in Yunan Province properties.
A supply-chain expert who specializes the in the Ningbo market.

NOTE: Shanghai, Beijing and Shenzhen are not appropriate places for a geographic specialty. They are too big, too diversified and too competitive.

Do I need a specialist?

Many newcomers to the China market feel that they are better off with a generalist that they can trust to get them pointed in the right direction at the beginning. This strategy may still have some life left in it, but you are going to run into some limitations very quickly. Your best bet is to use the generalists to find more specialized service providers right away.
To see why, turn the situation around. You are sitting in your office in NY or Chicago, and you get a call from a lawyer in California representing a client from Beijing. The lawyer in question doesn’t understand your business, doesn’t understand his client’s business, doesn’t understand the industry drivers or the market, but wants to chat with you about the potential to set up a JV at some point in the future.
You are going to have one of two reactions to this encounter. 1) It is a waste of your time. 2) This Chinese client must have lots of time and money to burn if he is taking such a scatter-shot approach to business. Maybe you should take the meeting and see what you can get out it.

You don’t want to be THAT client in China, where you can spend 6 months of back & forth just to find out what the company really does! It makes much more sense to take the time to find an expert in your business challenges. In China, the ability to access a useful network of contacts is one of the most important value-added skills that a consultant offers. (And don’t be taken in by big-name international firms that offer to open doors for you. Yeah, you’ll get great meetings – but the counterparty may be more interested in meeting your expensive consultant than in doing business with you!)

Another reason for dealing only with specialists is that it helps you do your due diligence on potential service providers. Shanghai and other major Chinese cities offer you access to a wide range of competent, reliable, experienced consultants who can help make your Chinese business a huge success. But for every honest professional there are dozens of charlatans, con-men and incompetent novices. Screening out the winners from the losers is much easier if you are discussing business specifics. True, you may not know anything about business entry regulations in Shanghai. You will, however, know a lot about your potential clients or operating conditions. If your consultant has never handled a client in your industry before, you are best off continuing the search until you find someone who has more experience that can help you. As always, get references from international clients, and check them out carefully.

China business is all about HR. We know that by now. Getting people, training people, holding on to people – in China we are all HR managers. Many American bosses think that they can solve the HR dilemma by running a leaner organization. Find one high-potential young star, dump piles of attention, money and responsibility on him, and sit back while the rumbas roll in.

Nice idea. Unfortunately, it doesn’t always work.

What can go wrong?

Chinese like groups.
Americans like the rugged individualist thing. Chinese like being part of a group. You keep trying to make your guy lead, but he doesn’t have much interest in standing apart from the crowd. He ends up being the group spokesman for their complaints, excuses and demands. If your superstar is effective, you will end up working for him.

If they’re going to work hard, they’ll do it for themselves.
Sometimes the superstar thing works out just fine. It works so well that your guy learns every aspect of your business and leaves to start his own shop. Chinese managers tend to take a pretty “aerial” view of business and strategy – if they can see the broad outlines of the landscape then they think they can land the plane. Sure, they’ll probably crash magnificently into the mountainside, but that doesn’t help you.

Bulk up the team for you
Sometimes your young superstar will take the ball and run with it – but he’ll assume that his main responsibility is bulking up your pathetically understaffed operation for you. Your lean, mean operation turns into one of those big ol’ jugs that hill-billies use. Thin on the top – but really fat and bloated beneath. The buzzword that MBAs use to describe this kind of organization is a “bottleneck”. You’ll just call it a nightmare.

They quit anyway
It all seemed to be going so well. You were doing everything right, and your protégé really seemed to be making progress. Then one day he didn’t show up. Next day either. You track him down, and he’s in a manager trainee program at some German multinational for less money and a crappier title than he had with you. Why? How? What happened? Doesn’t matter. Your plans are in ruins, your heart is broken and you’ll never trust again. Within 6 weeks you have a huge staff bloated with slack-jawed drones that have no initiative – but won’t be noticed when they quit in 6 weeks.

Still think you can pull off the Lean & Mean approach?
Here are a couple of ideas that may improve you chances of success.

Hire from outside the big cities. Young people from the sticks (and in China, any city with under 5 million people qualifies as a simple countryside village) have a better notion of lean operations. They tend to show more initiative and have a more acutely honed sense of responsibility. Downside – they are not universally respected in the big cities.

Tie pay to performance. The key here is to make it visible, logical and direct. Forget lines like, “If things go well then you’ll be taken care of”. Put together a specific plan, discuss it, and make the numbers visible and open. X%, after expenses, paid quarterly. Pay promptly, completely and without any cleverness or tricks. Long term compensation plans can include equity, MBA or tuition, branch management, or lump-sum bonuses.

Plan for the long term. If your priority is long-term retention, be honest and up front about it. If you care about developing markets, then make THAT your plan. If you want to expand to a new city or region, build your strategy around it. Whatever your long term plan is put your money where your mouth is. Let your new protégé in on the plan, and figure out a way to make him WANT to stay with you for the long term and shoulder a big chunk of the management burden. Too many western managers run their organizations like a top secret military operation. Let your high-potential managers know what you are thinking, and get them to buy in early. You’re not going to trick anyone into staying with your operation for 5 years.

Success in China — particularly in the world of HR — often involves managing your parent company as carefully as managing your China team. But where here in your priority is getting top performance out of your team, your goal with the folks back in HQ is managing expectations.

Basically, you have two strategies for managing successfully in China.

Option 1) Change China.
Option 2) Manage the expectations of your China stakeholders.

It’s your call, but you may find that educating your home office and clients is the more attractive option.

ATT New China managers — Quick quiz:

What do you know (about China business)?
What do you know you don’t know?
What do you NOT know you don’t know?

Sounds like a word game, or a hippy philosophy discussion. In China, though, figuring out what you DO NOT know is your top priority for surviving your first year. Before you start doing RESEARCH on the China market, you have to INVESTIGATE the China market.

ChinaSolved Rule #1: The China market is a work-in-progress. The ground is shifting beneath our feet. No one really knows what the situation will be tomorrow. Tracking changes to regulations and laws is the easy part. At least they get published. But YOU are responsible for tracking changes in attitude, custom, fashion and business methods.

Rule #2: Everything you’ve ever heard about China is a lie – or at least out of date. If you want to make a room full of Chinese professionals laugh, read to them from Time magazine, or a 3 year old marketing textbook, or yesterday’s New York Times. Tell a 26-year-old professional woman in Shanghai that “brand awareness isn’t too strong in China”. She’s likely to point out that your own ensemble is two years out of date. Mention to a local associate that China’s infrastructure and distribution network are under-developed, and they’ll show you a subway system that makes New York’s seem crude and primitive.

Rule #3: Understand the Hardware - Software dichotomy. First the shiny new buildings go up, and then they figure out how to fill them. A lot of bad decisions have been made by westerners who believed that the guy in the nice Shanghai office actually knew what he was talking about. In China, the infrastructure tends to outpace the business practices.

Rule #4: China experts like to fill in the gaps with easy-to-digest cultural punditry. Giving face. Building relationships. Market opening. Cultural difference. These phrases sound great and make newcomers feel like they are making progress demystifying China. The only problem is that these words don’t really mean anything. People who live and work in China don’t really talk this way. Spend a little time saying “so what?” or “what does that mean?”

Rule #5: Due diligence is more important when you don’t know what’s going on. Get specific fast. Price breakdowns, itemized costs, references, partners, length of time in the business – you know the drill. Yeah, right – that’s not the “Chinese way”. But you’re not Chinese. There is only one constant in China – no one gets more cooperative or transparent after the funds have been transferred. Your pre-deal conversation is your one and only shot at getting answers to the hard questions. Oh – and don’t be afraid to ask the same question several times. If you get a variety of responses, then you’ve just heard your first alarm bell.

I had to go to a major Chinese bank to deposit some cash recently. Late morning. Not crowded. Only about 6 customers – and about the same number of tellers behind the windows. There were another 5 or 6 administrators, supervisors and clerks busy about their own business. After 10 minutes of waiting, I saw exactly 1 transaction completed. I figured that at that rate, I wouldn’t have time to do my business. I left.

The seats were more comfortable than in the past, the guard smiled and held the door as I walked in, and there was an electronic ticket-machine to help people queue up – just like in the deli section of a big supermarket. That seems to be where all the IPO money goes in China.

Now here’s the question – Have China banks gotten better over the last 5 years?

Progress? Yes and no.
In reality, they have gotten better compared to where they were 5 years ago. They are more comfortable places to wait.

The problem for the Chinese banks, however, is that during that same period of time their international competitors have also progressed – only much faster, and from a much higher base. In other words the Chinese banks have fallen even further behind their global competitors. And the newcomers are getting set to enter China with those new standards and capabilities. Meanwhile, the market has been educated to expect more and better services.

What about YOUR business?
Are you measuring progress against where you were a year ago, against local standards or against international standards? If you manage a business in China, this is an important question.

I was speaking with a friend who does business entry consulting for international companies, and he told me that the number of inquiries was down – BUT THAT THEIR CAPABILITIES WERE MUCH BETTER than in years past. In other words, you are facing new competition that is hewing a line closer to international standards. The clients and customers you deal with are already looking beyond cosmetic improvements and starting to demand real improvements in service levels.

Do regular market analysis to see how you stack up against direct competitors – but start focusing on international standards as well. The days of giving customers a more comfortable place to wait are over. It’s time to start delivering service that doesn’t make your customers compromise their expectations at all.

Customers in China and overseas have started worrying about the quality of China-made food, manufactured goods and services. Great. Use it. Use your clients’ fears to raise the perception of your brand’s value. Rock-bottom prices are out – value is in. Make the New China Price part of your standard operating procedure. Differentiate your brand and justify higher prices by making your product seem safe, secure and reliable.

I recently attended a business event in a 5-Star French hotel, and the bar was getting a little busy. I ordered a bottled beer and asked for a glass. The harried barman grabbed a used glass, ran it under the tap and rubbed his fingers around the rim – that was to clean it. I drank from the bottle – and left shortly afterwards.

Don’t let that be your operation. There’s nothing wrong with charging more – but you have to deliver the whole package of quality and value. The days of hiring a polite, friendly westerner to greet overseas buyers but outsourcing the real work to anonymous lowest-cost subcontractors are over. The attention is on your operation, and you have to make it work for you.

Restaurants started using the “open kitchen” that was visible to all diners to give their establishment more atmosphere – but also to demonstrate the cleanliness of the food prep area. You can do the same.

1) Certify your supply chain. Whether you are a service, a restaurant or a manufacturer, take pains to demonstrate that your product is high value added from start to finish. First thing to be sure of – that the supplier or contractor you are paying don’t use a web of sub-contractors that you have no control over. Do the legwork to bullet-proof your supply chain, and then talk up your relationships.

2) Transparency. Let your buyers see your process. Show them your resume – and the people who will be doing the work. This is a great time to revisit your website and promotional material. Don’t hide from quality concerns – shine a spotlight on them and make it part of your offering.

3) Key suppliers/key accounts. Build better relationships – and make them part of your offering. One-off sales are out – become part of your customers’ supply chain, and walk them through your process. Likewise, develop stronger ties to your regular suppliers and share your quality concerns with them.

4) Don’t hide behind big names or fancy jargon. It used to make people comfortable, but now it makes them suspicious. Make sure you can back up any claims you make. Have references ready – and offer them even if the client doesn’t ask. Remember that the most powerful recommendations are current ones from recognized players in the same industry as your prospect.

5) Train for quality. Educate your front line people about the language and attitude of quality. It doesn’t matter how good your materials or process is if your front line service makes people nervous. Confidence in your brand begins when the phone rings or the door opens. If you are competing on low price, you can get away with a lame receptionist, misspelled emails and lackadaisical service. If you are charging more than your competitors, you have to outperform from the first moment.

I’m writing this on an HP notebook purchased in HK. I’m using a new wireless mouse bought in the Best Buy in Shanghai. The speakers I’m listening to are a well known international name brand (Altec Lansing) In every case, the recent purchases are moderately priced replacements for rock-bottom priced purchases I had to throw away.

Like many ex-pats living in China, I quickly learned that low prices can get expensive in a hurry. If you are lucky, you will have the chance to replace them with higher value goods. If you aren’t so lucky, your cheapo gear or products will fail you at a critical time and you won’t have the opportunity for a second chance.

International managers and owners in China are already feeling the heat. Dangerous goods aren’t just being exported – most of them are being distributed right here in China. If you’ve invested time, energy and money building a recognizable brand name, you’re probably wondering if the latest wave of product quality warnings is going to work for you or against you. The good news is that if you handle this the right way, it can help justify all of your hard work and planning as your brand achieves recognition as a safer, value-adding option. The bad news is that you could easily be painted with the same brush as other “famous names” that charge a premium for dangerous or low-quality products.

Here are a few issues to consider – and review with your purchasing people – to prepare for the New China Price that we’ll all have to start dealing with.

1) The China Price is rising. Basic inflation is working its way into the system. Commodity prices, raw materials, salaries, and costs of inputs have been growing just as margins have been getting squeezed. Also, as China has climbed the value chain and started offering more sophisticated goods and services, the value of those offerings has risen. These trends have put more pressure on margin-sensitive suppliers to cut quality even further. As buyers and end users become more sensitive to quality, look for your market to get more discerning about your claims – both stated and implied.

2) China isn’t necessarily cheaper – it just offers a wider range of quality choices. Some will argue that Chinese goods were never really all that cheap – it’s just that a wider range of quality, materials and grades were available. Chinese factories were able to exploit low wages and subsidized costs of production – but they also benefited by pushing the bottom of the market even lower. Ex-pat businesses that charge a premium have to be careful that their product offering justifies a higher price.

3) Value is not a number. The $2 fake computer mouse with SONY stamped on the top is cheaper because it’s worth less. You’ll replace it 5 times in the first 6 months – while the authentic brand that costs $20 will last for 2 years. Is it worthwhile to buy the cheap fake? Maybe – but you’d better budget for down-time, effort to replace the dud and the possibility that maybe your bargain parts will fail during a critical moment. If your cheapo gear craps out in the middle of a big presentation, the money you save will seem like a bad deal.

4) Quality is a big-picture issue. Nice tablecloths and a hostess at the door will help bring in customers the first time, but if you want people to come back the service and quality have to be consistently high. Your product offering is as strong as the weakest link in the supply chain. If your salespeople are incompetent, your after-sales service is non-existent or your packaging is sub-standard, you will not be perceived as a premium brand. QC isn’t just for the factory.

5) Careful of getting what you ask for. In China you tend to get what you pay for. Experienced China negotiators know when they’re getting low-quality knock-offs, and sometimes they even look for them to boost profits. But there are no bargains here. If you want international standards of quality, you should expect to pay international prices.

Next – Making the New China Price work for you

Recent problems with dangerous and sub-standard exports have exposed deep problems with standard QC methodology in China. In many Mainland operations, QC and QA procedures have not been viewed as a series of beacons and guideposts designed to keep us on the high road – but rather as an occasional warning light or plastic cone to be avoided as quickly and neatly as possible. China has achieved its success as a low cost producer where the biggest gains went to owners who showed creativity in sidestepping regulations – not developing innovative products or comprehensive solutions. It’s little wonder that the response to QC has been “avoid and evade” – or that this belief tends to be deeply ingrained in many organization’s corporate culture.

Is your China operation ready for the new wave of QC challenges? China-based owners and managers are facing a perfect storm. Just as costs are rising faster than they have in years, there is a new scrutiny on safety and quality of goods & services. A possible economic slowdown in the West may crimp demand at the same time that oil and raw materials pricing are hitting records. High-profile product safety issues and US presidential primaries are putting China’s industrial output in the spotlight like never before. Yeah – I thought the “quality question” was old news too, but it’s back and bigger than ever. Are you ready? Here are a few ideas that might help:

ID your quality bottlenecks. And face the fact that it might be YOU.
Low cost and high quality aren’t mutually exclusive – but they are in natural opposition. You might have your own notions of “lowest possible price for an acceptably high level of quality that is in keeping with our parameters of customer satisfaction”, but all your managers and staff hear is “low price”. There’s a good chance that you are the one sending the “cheapest we can buy for, dearest we can sell for” message without meaning to. Just because people are parroting the right buzzwords when you ask them about Quality doesn’t mean that you are making progress. You have to ask yourself some hard questions and be very honest with yourself about the answers.

The role of HR. Recruitment and Training.
Climbing the value & quality ladder in China is bucking some powerful traditions and cultural forces. You are asking your team to do exactly the opposite of what their parents, grandparents and society has taught for years and years. To pull this off, you have to instill a new culture and worldview within the minds of your team. Start by recruiting people who are open minded and innovative, and then offer the right kinds of orientation and training.

Purchasing department mentalities have to change.
Time to kill the false economy of low purchase price for goods and services. This is where you are getting killed with the best of intentions, because there’s a good chance your most loyal, devoted, well-meaning staffers are destroying value left and right. When I first started training sales teams in Shanghai, I would negotiate and develop plans for 5 or 6 high-level sales specialists – but walk into a room packed with dozens of clerks, technicians and new recruits who “just wanted to listen”. Some clever HR manager had figured out a way to lower the effective price per person by packing the room. Unfortunately, the effective value of the seminar was plunged since the original goal of the seminar was subverted.

Metrics & critical success factors. There are other numbers besides unit price.
Quality means nothing if your only metric is cost per unit. As a manager, you have to figure out ways of capturing true Return on Investment (ROI) and true all-in costing. Yeah, I know it’s hard. But that’s your job as boss.

Corporate Culture
The hard part of insuring quality is for you to teach your team that “good enough” isn’t good enough. You have to change the attitude and culture of your company to one where people strive for quality output and best practices as part of their own second nature. Chinese staffers have a tendency to believe that QC is a one-off exercise that gets put in place once. You have to demonstrate that Quality is an ongoing process. Until you can do that, your people are going to continue destroying value with the best of intentions.

Your China operation is busier, you are booking more business and getting more hits from the proposals that you and your team are sending out. Great news. But small businesses and entrepreneurs are notorious for their boom-bust cycles of revenue. The key for you is to control costs on the way up and to build sustainable flows of revenue that you can count on for the long term.

Don’t become a China ex-pat cautionary tale. Take action now to secure your long-term success.


Time management tips for the successful China business:

1) Know what’s working. You put a lot of effort into your website or your advertising campaign, and it’s natural for you to assume that your efforts are the source of your recent surge in business. It would be great if it’s true – hard work and bold thinking pay off! But do you have any reason to really believe that? Test and analyze. Figure out where your new business is really coming from, and then develop ways to keep it happening.

2) Don’t forget about your good friends and old clients. There may be a lot more on your plate than there used to be – and flashy, big-named clients who didn’t return your calls before are suddenly asking for proposals. But it’s your old clients and long-term support network that will keep you going when this boom turns to next winter’s slow season. You don’t want to have to re-introduce yourself to your oldest client when the well starts looking a little drier.

3) Beware of new challenges – collection, VCs, hiring and recruiting. There’s a difference between DOING the job and GETTING PAID for the job. The biggest clients are the biggest pain to collect from. And beware of VCs and other strategic partners who spin pretty stories about blue-sky deals. These guys are taking a lot of hours and listening to a lot of your proprietary ideas – and giving nothing in return. As you get busier, make sure that your staffing needs don’t swamp your schedule – because China HR is a huge drain on time and energy. As you get more successful, your time becomes more scarce and more valuable. Don’t let other’s waste it.

4) Don’t reinvent the wheel. This is were systems count. Invest a little time in planning and save a lot later on execution. You’ll quickly find that you start using the same types of suppliers, freelancers, sourcers and processes over and over as your business picks up. Make sure you are not constantly searching for new sources. Develop a list of key-suppliers and contractors, and negotiate volume deals. This is a particularly significant issue if local Chinese are in charge of HR and procurement. They have a tendency to do constant, prolonged searches for freelancers and suppliers.

5) Look for new business even when you don’t need it. The classic entrepreneur trap is to be so busy with yesterday’s contract that you don’t have time to look for tomorrow’s prospect. That’s what leads to the big swings and seasonality in your business – and can threaten you business’ long-term prospects. Devote a time and budget to marketing and promotion so that you have a steady stream of leads and prospects. Otherwise, today’s boom can lead to next quarters’ bust.