Signing an International Partnership? Here's Your Checklist
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Every entrepreneur dreams of building a start-up that is renowned nationally or better yet, globally. An important aspect of scaling up your business is signing new partnerships - global and national. But while signing partnerships, especially the international ones, a founder needs to be very careful about what's in the offing. A wrong move could even result in a law suit or a failure of their first international venture.
So, start-ups going global need to know about what they are getting into and more essentially, how they are going about it. Entrepreneur India spoke to start-ups, that have gone global or tied up with international players, who shared tips on what to do before you sign on those papers.
Compliance, Most Essential of Them All
Speak to any entrepreneur and they cannot write off the importance of being compliant with the laws of the land that you are expanding into. When you are stepping into the rings of the international trade, you need to have your boxing gloves on. One cannot simply go ahead with an international partnership without being compliant and making sure that the governance aspect is looked after.
Vikas Bagaria, founder of PeeSafe, has over 20 years of international business expertise and he cannot stress more on the need to be compliant. "For start-ups, you cannot start a service without having all the regulations in place. You need to have registered with a bank to ensure you can send and receive money, the contract you sign needs to be verified by a lawyer etc. If you are in the service business, it is important that you register to be able to export and import products," he said.
Ensure Your IP is Safe
When stepping into a foreign land with a registered or patented product, an entrepreneur has to make sure that their trademark is registered even in the country they are expanding into. One also needs to understand the do's and don'ts of the country. "If someone else is registered with the same brand name, you will be compelled to do business with them or buy out the trademark, which can be taxing. The concept of going global is not merely the supply of products," said Bagaria.
Get A Background Check Done
While signing an international partnership with a foreign brand, one needs to be sure about the authenticity of the brand. A background check will help you know whether it is okay to go ahead with the partnership. Bagaria has a tip for entrepreneurs here. "Although it can be a lengthy process, but try to write to the Indian Embassy of the country you are expanding into and ask them for a background check," he said.
Who is Your Partner?
Understanding the partner is core to the deal believes Gurpreet Singh Bhatia, CEO, Vision Express, which is a joint venture between Grand Vision - the global leader in optical retail and Indian retail business giant Reliance Retail. According to Bhatia, the most important consideration before signing the dotted line, is to understand your partner. "An entrepreneur should find a strategic partner who understands your goals and share your vision. Second, be involved in every step of the way. Meet your local lawyers, potential employees and vendors in person," he said.
For any international expansion, it is essential that a partner is someone who adds to the growth of your business. The stakeholder in a foreign country should be able to give you inputs and advise on how to scale in that country. Himaghna Dey Sarkar, Chief Expansion Officer of ToneTag, which has global partnerships with Infosys finacle, Master Card Global etc., said, "You should partner with someone who has connects across the ecosystem and can get you introduced to more people who will further add to your value chain."
But before you sign a deal, it is important to look at your own business first. "The key to international expansion is pace and skill - how fast and how much can you grow," said Dey Sarkar.