Recessions end with boredom. When people finally say, “oh, hell. I guess it’s time to do something” then spending and hiring start again. Even if the recent stock market rally turns out to be nothing, there are still enough signs we’ve bottomed out to start plotting out our next steps. It may not be good, but it looks stable. The economics report isn’t thrilling any more. That means that people are planning again - and our old friends, colleagues and distant relatives are waking up to the fact that, like it or not, they are going to have to look to China for markets.

If you are a China-based expat looking for an injection of capital or an unwilling consultant trying to make your way in Shanghai, you can expect the frequency of the “business entry inquiry” calls. To new consultants they seem like real clients and to business owners they may sound like competitors. In the world of consulting, these first-time inquirers occupy a strange space somewhere between potential gold-strike and competitive blood-sucker.

How do you handle the ‘general inquiry’ from a western business looking at China for the first time? First, know the answer to these three questions:

Now people are starting to plan.
It’s great that people in the US and Europe are taking a new interest in setting up operations in China. But if you’ve never had serious negotiations with a potential business-entry client, you have to be careful. You can end up doing far too much work for far too little compensation OR recognition. But even worse, you can end up being led around by the nose and end up signing agreements that are harmful to your long-term financial health.

How to prepare for your first Western partner or client – the Expat edition

Here are the three questions you need to get straight BEFORE you pick up the phone and start talking to high-potential strangers. If you answers are, “it depends”, “it’s impossible to know” or “every situation is different”, then you are missing the point. You are will be involved with what some people consider to be high-stress dialogues – talking about money, selling yourself (or your business – which is pretty much the same thing) and setting commitments. You’ll have more than enough flexibility when your prospect asks you ‘how much?’ out of the blue. The problem is that you won’t know what to say when you have to say it. So have good, solid answers to these questions:

How far are you going on a first date? How much are you gonna give away for free?
Experienced consultants have learned where to draw the line – and it’s remarkably close to where they’re standing. They don’t do work on spec – and they don’t give away too much in the proposal stage. Lots of novice contractors will be tricked into solving the problem they are bidding on in order to prove that they can really solve the problem. The less you say the better.
One good solution to this is a website or blog that clearly demonstrates your ability, expertise and specialties without doing customized problem solving for every inquiry. Many successful consultants write up a boiler-plate summary of services and maybe a case study or two and use that to close on the first appointment. The new consultant conundrum – you will be asked to work for free in order to get paying work.

Are you specialist or generalist?
Right now you may still be broke (or afraid of becoming broke), so you’re thinking that you’ll be anything you need to be. The problem is, the moment you get one job, client or partner then you are too busy too look for new work. That means it’s easy to drift off into directions you never anticipated. Plan early – are you an industry specialist, a client specialist or a generalist?

Generalists work more, but Specialists get paid more. It’s normal for consultants to start of as generalists and let the market determine their specialty for them. If 65% of your business is doing feasibility studies for French-Chinese JVs involved in real estate development in 3rd tier cities – then that’s your specialty. If you want it to be otherwise, you have to pick a target market at work it. There are basically two classes of specialty for business consultants – client specialists and service specialists. Client specialists are valued because of the people they know and industry knowledge they possess. It’s common to see former engineers marketing a range of services to other engineers. On the other hand, some consultants are specialists at solving a specific problem that they perform for a wide range of clients.

Are you looking for a commitment?
Be honest here: Do you want a job from a client? Do you want a partnership (i.e.: cash injection) from a supplier or client? Don’t pussy-foot around your real goals – but don’t look desperate here either. Most new consultants look desperate while existing businesses will grow old waiting for someone to ask them to dance. If you are the one proposing a deal then you are the one who has to come up with a price and terms. If they are proposing the business then they should state their numbers first.

Consultants – unless the other guy brings up a job offer, don’t mention it until after you have settled on a price and signed a contract. Your best approach is to wait for something to go right early and then use hiring as part of an up-sell. If you bring the fact that you want a job with them too early, you’ll never get paid – and might not get hired.

Existing businesses looking for cash or commitment from partners – ask them if they have plans to expand their operation in China. If there’s any hope here, start insinuating yourself into their plans. Start with basic biz entry assist, and keeping a dedicated staffer on just for them (who pays for them is to be negotiated). Hint: Decide EARLY if and when this becomes a competitive issue. Lots of business owners tend to freeze up here – one minute seeing a potential partner and next imagining an insidious foe. If you really can’t decide, then pass before it causes ulcers.

Next: Exploiting your advantages

This entry was posted on Monday, April 20th, 2009 at 7:59 am and is filed under Expatreprenuership, Managing in China, Consulting in China. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.