Strategic Partnerships

What are best Terms for foreign partnership?

Altaf Sayyed Diversity-focused, forward-thinking experienced IT executive with a humanist, global perspective

Last updated on December 12th, 2019

Our service is software development and we have provided services in foreign country already. If we have to associate/partner with foreign company or individual to regularize sales and also to handle clients in their country:

Who can be ideal partners for this venture?

What terms should we set for this partnership?

What percentage of share we should offer in each business deal?

Paul Garcia marketing exec & business advisor

December 11th, 2019

While you may eventually reach a point where you can operate through foreign associates, here why the idea likely won't work today:

1) you have not reduced the risk for a foreign associate in any way

2) you have not tested or established a foothold in the foreign countries to know that your business will succeed there

3) you have not determined the sales effort and method required to attract attention in the new market

A foreign partner would be foolish to enter a deal with you right now. Opening global markets typically requires you traveling there personally to win some sales and learn the environment. A foreign sales partner wants to walk into a franchise that already has defined the amount of effort required to win deals, the correct approach to use in that local market, and demonstrated they can deliver quality so customers are happy. What works or sells in one country does not usually work the same in any other country.

Yes, it is probably more efficient to withdraw once you break the market open in a new country, turning the business over to a local partner. But expecting a partner to break the market open for you, well you probably should expect to pay them nearly 100% of the sale for the risk you're asking them to take. They'll be putting in all the time with zero guarantees.

Tobbie Diamond Cofounder & CEO @ Xtordnigeria.

December 17th, 2019

Paul Garcia is actually right. Most times new grounds need you to touch ground first. U must travel over to your target geographical location and see what is obtainable

Edward de Jong Software designer and developer, programming language designer

Last updated on January 17th, 2020

Having done business all over the world, the most important thing when doing foreign deals is to first pick an honest country. I made a mistake once of building a very nice software product for Turkey, bundled with every PC in their school system. The company in question was run by Erdogan, who was slated to be the next prime minister. How could i lose? Well, they reported zero sales, and i got royally screwed. Probably helped pay for the carpet in one of his 1000 rooms in his palace. In contrast, i had handshake deals with people from the Nederlands and Japan ,and did great business there. America is only medium honest (and thus we are only medium rich). The wealth of a nation is entirely determined by the integrity of the people in that country, and there are just certain areas like Nigeria and Russia that are just hopelessly committed to thievery. High integrity people can be found in any country, but when national standards are very low, it could be problematic. You would have to be very intuitive, if not psychic, to find an honest man in some of these countries. I know that some people will object to this, but having sold software all over the world for 20 years, the yearly stats from southeast asia (population 2.5 billion) versus the sales to the Island of New Caledonia (pop. 250,000) were consistently the same. That is a 100,000 : 1 ratio of per capita sales. That is a staggering number that deserves your attention.