4 tips to help you land a foreign contract

International business instructor Leroy Lowe has some words of caution, based on his years of experience dealing with entrepreneurs who make the leap to expand overseas.
The leaders of the Phillipines and Japan met for a summit in September 2011. Small business owners can do well if they remember a few rules before expanding abroad, Leroy Lowe says. (Toshifumi Kitamura/Reuters)

You’ve built a profitable business. You’ve got a good product, and you’re dominant in your local market. Now could be the right time to expand and work with bigger, foreign fish.

If you’re thinking about securing large foreign contracts for your small business, international business instructor Leroy Lowe has some words of cautioun, based on his years of experience dealing with entrepreneurs who make the leap.

Be patient

When an entrepreneur comes across a promising lead for a major international contract, there’s an impulse to throw all your eggs into that one basket. Ignore that impulse, Lowe warns. "People tend to want to do business with the first people they meet," Lowe says. "You meet someone at a trade show, and all of a sudden you think this person is your ideal candidate to be your man in Tokyo."

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"That’s not how we do things domestically, so why do it overseas?" There’s no substitute for doing your homework, he advises. You must get a feel for the market, who the competitors are, what the local regulations are, what the margins are, and who the stakeholders are — only then are you ready to start the process of nailing down a contract, and jumping in. And until you’re there, always keep an eye out for other opportunities.


The first meeting with a potential foreign partner can be exciting, but it’s riddled with pitfalls. To keep track of the process and the confusion as the sides feel each other out, Lowe advocates a process he calls "mapping." That means keeping diligent records of who all the stakeholders in the process are. Sometimes people will have a high rank, but little actual decision-making power. Sometimes someone will be low-ranking, but turns out to be a trusted confidante because of their technical knowledge.

"You have to understand where everyone involved in the process is coming from," Lowe says. That can sometimes be a matter of identifying who’s cool to your proposal, and figuring out exactly how their concerns can be addressed. "The quiet guy in the corner that says nothing but has his arms crossed — that’s a cue to listen, find out their views and follow up with them to see if they can be moved," Lowe says.

Any person could have final say over the deal, or simply have a competing interest in the matter. Keeping track of who is who is key. It’s not uncommon at some meetings with overseas government officials to have 10 people in the room, Lowe says. "Every single person in that meeting is there because they all have a say," Lowe says. So don’t spend time focusing on who you think the decision-maker is, or dealing with your contact who got you the meeting in the first place. Listen.

Managing the conversation

What happens after that meeting can be just as important. With a major international company, there are likely to be many people to have to deal with along the way. One person on your side needs to be the point man for stick-handling the way to any contract. The larger and more complex the negotiations, the more people there are likely to be in that process, so it’s important to make sure everyone is singing from the same songbook, Lowe says. "Everyone needs to have a sense of the messaging," Lowe says.

That means everyone on your team needs to be diligent about collecting information and concerns, and ferrying them back to the point man as much as possible. Small details are important, so whoever’s taking the lead on any procurement contract needs to have as much of the information at their disposal as possible. "If the lead person on the other side is getting one message, but his minions are hearing something else from somewhere else, that’s a problem," Lowe says.

Go small

Trying to hammer out a major deal with a foreign firm can fall apart in any number of ways, but ultimately, the higher dollar value the negotiations get to, the more reasons may pop up that become reasons to walk away. If there’s reluctance to a major, multimillion dollar deal, consider going smaller. Maybe they’re uncomfortable giving their entire procurement budget to a small, unknown company from a foreign country that they’ve never dealt with before.

Gauge the interest in a smaller, pilot project. Show your technology can work in the way you say it can. Give them an example of how they can see your product reducing their costs in part of their supply chain. "Basically, anything you can get them to spend is a positive," Lowe says. A dry-run using your new model for six weeks can often turn into something bigger down the line once they like what they see. "If they like what you have done, they’ll be more inclined to up the stakes."