Corporate Dec 17, 2012
By SME mentor
Been there, done that... and still growing. Madhusudan Sikri, founder of Sikri Packaging Corporation, tells you how to take that leap, not just to the next level, but to the international arena. It's a dream most entrepreneurs nurture but many either don't have the wherewithal or the confidence to do it.
What qualifies Sikri to offer advice on such a weighty subject? His company provides packaging machinery solutions for packing groceries, pharmaceutical products and other items. But he also exports machinery to around 70 countries, and 90 per cent of his revenue comes from selling machinery overseas. Sikri shares his experiences, anecdotes and valuable advice on cracking the overseas formula.
1. Pick your territory
First, a lesson in geography is in order. But this geography lesson also includes knowing the market you want to enter, its strengths and weaknesses as well as the micro and macro economics of the country. Of course, this calls for intensive research. Zoom out a little and get a perspective on the international market with respect to your business space and find out who your customer can be.
2. Gain acceptance with the locals
Gaining acceptance from the Western world is a major challenge. Justified or not, they will probably think, "OMG, people from India! How can they sell good products?" Why, the Indian mentality is equally astonishing. When I started out, Bombay, as it was then called, was THE place to start a business. As if Calcuttans didn't know how to sell good products!
3. Dodge the red tape
About seven years ago, I set up a company in Hong Kong because it is a free market. All my business that does not involve India is conducted by that company and is, thankfully, not subject to the rules and regulations of the Indian government!
4. Consider the currency
Choose a country whose currency is much stronger than the Indian rupee. After taking purchasing power parity into account, you can be sure your product will be cheap for the buyer vis-a-vis the same product in is own market.
5. Start from the top of the pyramid
Every company, including the really big ones, is rushing to the bottom of the pyramid to make money. But a small company must start at the top of the pyramid. It's a simple law of physics that water will always find its level. Gravity pulls it downwards and so water flows downwards.
6. Speak in the language of your client
This is an add-on. Languages like Spanish, French and other European languages are easy to pick up. But if you're trading with a country like China, you will have to learn their language as the Chinese speak only in their own tongue. Moreover, dealing with the Chinese is a very difficult proposition for a small company as there is no scope for customisation there. They believe only in mass production.
7. Opt for bank transfers
Don't do business with people who want to do business via credit card, cheque, PayPal etc. Do business with people who are willing to do a bank transfer, which leaves a clear money trail. This way, you will know who you're receiving your money from and the identity of the buyer and the bank. Thus, everything is legitimate.
8. Make optimum use of the Internet and social media
The Internet has levelled the field for small businesses, and apps like Skype are game changers. For instance, if a prospective customer wants to take a look at your product, all you need to do is position it in front of a webcam, or vice-versa, and who knows, you might be on the verge of clinching a deal. You can even offer a demo.
Without the Internet, I don't think I would have been able to take my company as far as I have. Earlier, my clients would send me photographs via msn. It sort of worked but not as well as it does now. Whatsapp is another blessing for the kind of business I am engaged in.
Fortunately, today, if you need help, you can simply post a request on Linkedin groups and you will get plenty of suggestions. Thanks to Linkedin, I was able to convert all the operating systems of our machinery into multi-access electronic controls using frugal engineering - in just six months!
9. Take a long-term view
You must have a passion for your product. If something goes wrong, you must take the hit, repair it, send spare parts or replace the product completely. You must have the ability to set it right even if it means spending Rs 2 lakh for a machine sold for Rs 5 lakh. You may lose this battle but the customer is yours for life. Take a long-term view of things.
Finally, never look at your balance sheet or books of account. Just service your customers, vendors and suppliers well. A sportsman never looks at the scoreboard all the time. They just look at the ball. Nurture your passion, take risks but never entertain fear of failure.
-As told to Nikita Peer
Madhusudan Sikri is the founder of the Kolkata-based Sikri Packaging Corporation, which provides packaging machinery solutions for groceries, pharmaceutical products and other items. Sikri, who has been in the business for 19, also exports machinery to 70 countries.
This article is supported by Spark the Rise. To know more, and to submit your ideas and projects, click here.
More From Firstbiz Staff.