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INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | | JULY 27, 2000 SMART ANSWERS Pitching a New Consultancy Step No. 1: Make sure there's a market need for your services
Q: We're a small company that imports products from China. As a side business, we would like to start a consulting service offering trade visits, cultural expertise, and document translation for companies that want to do business in China. What is the most cost-effective way for us to market this consultancy? -- L.H., Manchester, England A: Before you start thinking about how to market your consulting company, you need to research the idea and try to ensure that the effort and money you invest in this side business is really going to pay off. Is there truly a need for your services that isn't being met by government and private business-development groups or language schools and interpreting/translation services? What can you offer your clients that will be unique? How much will you ask them to pay for your expertise? Will the consultancy take so much personnel and time to establish that it ultimately weakens your import business? If you determine that there's an unmet need for a consulting business such as you envision and that you could fill it, you must take steps to make your company attractive to your targeted market. Look into the possibility of cooperative agreements with existing marketing firms in Shanghai, Guangzhou, and other Chinese business centers, suggests Michael Doram, a Pasadena- (Calif.)-based attorney specializing in foreign trade. "With partnerships in China already established, you will have a credible capability that you can market," Doram suggests. AIM SMALL. Determining your target market will be crucial for focusing your marketing efforts. The business consulting field is extremely crowded, and if you try a scattershot approach, you'll be competing against the Arthur Andersens and other large consulting companies that aim for the Fortune 500 market. Rather than waste time and effort only to be outspent by the giants, narrow your sights. What kinds of companies do you envision would need your services and be willing to pay for them? Your expertise is in importing Chinese products to Britain. But the details of doing business globally -- such as exchange rates, shipping and handling, letters of credit, and tariffs -- vary from country to country. So, you should probably look to other Britain-based companies to make up the bulk of your customer base, experts say. Large, established companies already importing successfully are likely to have experts on their staffs or have offices in the countries they are targeting. Smaller companies exploring new markets are more likely to hire a consulting company to help them, but you will have to make sure that your prices don't lock out these potential customers. Capitalize on your own story as you pitch your services to these future customers, experts say. How did you get started doing business in China? What blunders and missteps did you make that could have been avoided if you had had expert help? Emphasize the fact that you can save your clients money and time, and help them expand their businesses into China more quickly than they could by themselves. Since you'll be using your own story to sell your services, you might start by targeting companies something like yours in terms of location, size, and mission. TRADE GROUPS. As for how to reach potential clients, start by asking yourself where they get their information. What publications are they reading, what organizations do they join, what Web sites do they frequent? "Pursue industry-specific trade leads through mailing lists, trade magazines, and trade-association participation," says Doram. The costs are lower in a specialized niche, and the businesses you'll reach will be more targeted. Along with industry organizations, join some local trade associations aimed at businesses working in the international market, recommends Nancy Hiromoto, board chairwoman of the Los Angeles chapter of Women in International Trade. "Board members are usually good sources for information and referrals. You can make valuable contacts by joining and participating in several groups, and posting advertisements in their newsletters and on their Web sites," Hiromoto says. "That way, you could spread the word about your services on a smaller, localized basis. This works well with small and midsize companies [that] feel more confident working with another company in the same trade organization." The Organization of Women in International Trade, with chapters worldwide, might be a good starting point. You can find links to other international trade organizations on their Web site. Have a question about running your business? Ask our small-business experts. Send us an E-mail at smartanswers@businessweek.com, or write to Smart Answers, BW Online, 46th Floor, 1221 Avenue of the Americas, New York, NY 10020. Please include your real name and phone number in case we need more information; only your initials and city will be printed. Because of the volume of mail, we won't be able to respond to all questions personally.  By Karen E. Klein  | | |
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