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The Road Less Traveled

Don't disregard the potential of developing nations.

When you're looking to go international, industrialized nations shouldn't always be your first choice. Have you considered developing countries?

More than half the world's population is scattered across the 100-plus economically maturing nations within Africa, Asia and Latin America. Many of these areas have strong middle classes, controlled inflation and adequate infrastructures.

"Opportunities are very good in those areas," confirms Harry Brandon, co-founder with Gene M. Smith of Smith Brandon International, an international trade consulting firm in Washington, DC. "The standard of living is improving. People are starting to have the ability to reach out for the services and products [the United States has] to offer."

The process is far from effortless, however: Relationships take longer to develop, and businesses in these countries rarely commit to your terms unless they're certain they can meet them. They also may be unable to respond to sudden increases in product demand, due to frequent lapses in electrical power or unreliable transportation. And of course, fax and phone lines are often nonfunctional.

Entrepreneurs sometimes fear doing business in these areas (Colombia has a reputation for drug-trafficking and terrorism, for instance), but overall, the benefits outweigh the drawbacks. It's not hard to familiarize yourself with an area like Latin America--its huge population shares similar cultures and languages. And these nations also have "an infatuation with American products and American culture," says Smith.

Just make sure to enlist the expertise of a third party to help you. That's what Jay Duffy did: As co-founder with his brother, Mike, of Cascade Clear Water Co., a bottled water manufacturer in Burlington, Washington, Jay paired up with a market-savvy expert to help with overseas negotiations. Now he's drinking to success with profitable relationships in Taiwan, Indonesia and the Philippines. "For me," Jay says, "we really couldn't be doing business without him."

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This article was originally published in the February 1998 print edition of Entrepreneur with the headline: The Road Less Traveled.

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