Chain Reaction

Picture this: A Minneapolis native moves to Siberia to open a chain of restaurants based on an American staple hardly anyone there has ever heard of. Sound outlandish?

Not to 32-year-old Eric Shogren. In the summer of 1996, he opened the doors to his first New York Pizza restaurant in Siberia. Today, the chain boasts seven locations throughout Novosibirsk, a city of approximately 2 million people. But despite the obvious achievement, Shogren is the first to admit the difficulties inherent in such a venture. "Sometimes I tell people it's a rewarding experience if you can do it," he says, "but it falls into that category of `Don't try this at home.'?

But with the right frame of mind--and the right resources--you can drastically increase your chances of launching a successful chain on foreign soil. Because it's a difficult venture to undertake alone, Shogren brought in his two brothers, Brad and Mike, as partners. It's also essential to hook up with the right foreign company before launching a business overseas: Locals can provide cultural and bureaucratic know-how that only comes with firsthand experience.

Beyond language and cultural barriers, financing will be a problem if you don't obtain strong backing at home first--especially when you've relocated thousands of miles away to a place like Eastern Europe, where banks either fail on a regular basis or penalize borrowers with sky-high interest rates.

Another stumbling block? Staying grounded about your goals. When you've taken an innovative product to a foreign land where opportunities abound, the temptation to expand too quickly is all too real.

Which is not to say that obstacles should deter those with a knack for international business. The main thing to remember? You'll have more difficulties than you expect, says Shogren. "But the rewards are out there," he adds. "I suppose if it were easy, everybody would be doing it."

This article was originally published in the April 1998 print edition of Entrepreneur with the headline: Chain Reaction.