How to Do Business in China

Looking to expand your business? You might want to look to the Far East - as in China. There is a groundswell of eager Chinese consumers with money to spend. As the middle class expands they'll be looking for the same types of products and services as every other group of middle class workers around the globe.

How can you break into the Chinese market? It's going to take a little groundwork and investment.

Here's what you need to think about to do business in China:

Get the Lay of the Land

You really can't just drop your products into China and expect them to sell. You'll first want to explore the country.

Don't worry about seeing it all. Stay focused on the urban centers where people are spending their money. The language barrier could be a huge hurdle but it is easy to overcome. There are many locals who are happy to act as an interpreter. Try going through a reputable service to find someone to take you around. For a few bucks you can also download the iTranslate app on your Smartphone which will get you through the basics in a pinch. If you're really serious about doing business in China you might take a language course. That will show your Chinese counterparts that you're respectful of their culture.

Keep in mind that you're not guaranteed to make a quick buck in China. Build a long-term strategy, with a network of employees, business professionals and consultants.

Find a Trade Show

Just like there are trade shows and expos happening all the time on this side of the Pacific, there will be the same kind of opportunities in China. Depending on your business these could be a perfect way to start building up your new Chinese network of business associates.

Retain a Qualified Lawyer

The Chinese have a different way of doing business. Once you embrace that you should be able to navigate the intricacies of the Chinese marketplace. For instance, the Chinese don't embrace contracts as a legally binding agreement but more of a show of good faith. Does this mean you could get ripped off? Perhaps which is why you want to do your homework before setting up shop in Shanghai. A good lawyer will provide you with the legal backing and advice to help you navigate the business culture.

Work With a Consultant

You might find that a solid business consultant on this side of things can be the best introduction into Chinese business and culture. Once again, because of the many business opportunities happening in China you should be able to find a qualified consultant to help you set up your business. Look for a consulting company with many resources as opposed to an individual. You'll get more bang for your buck that way.

Finding Suppliers in China

If you're making a product for sale, then the specific cost of manufacturing of that product will make all the difference to your bottom line. It's no secret that Chinese manufacturing can deliver a wide variety of products are very competitive rates.

If this is your first foray into the world of outsourcing manufacturing to China, you need a smart approach. Sourcing from China comes with its own set of challenges that need to be overcome. Here's how to not make it a problem.

Determine Your Needs

 

Sure, you know what you want to make but in China there are different approaches to each manufacturing contract. Basically there are big corporations that will take on the job or farm it out to a 3^rd party vendor. As a small business owner, you might want to seek out the smaller family owned business for the startup. This type of company will probably be in a better position to provide you with direct access and support. You will avoid the markup when a larger manufacturer subcontracts out your job.

Research All Angles

Before you book your first flight to China, you'll want to do a lot of research. Build up a database of potential manufacturers by searching trade directories, chamber of commerce listings in China, Export Development Corporations or business associations. This can happen when you research comparable products to yours online. You'll start seeing some of the same company names popping up. Clearly these are the dependable factories. They should be your first stop.

Pick Your Top 15 Suppliers

Once you've put a list together, start making calls or sending out emails to set up relationships. You'll want to find out all the costs associated in hiring this company from raw materials to transportation. Make a list of questions that you'll be asking of all of your suppliers and then you'll be able to narrow down the list to your top 15. These you might want to visit in person to make sure they can handle the job. It's going to take time to find the best fit for your company's needs but you're better off exhausting all the possibilities before firing up the assembly lines. Do not put your entire manufacturing assembly line on one company. Spread the work between two or three companies depending on your volume of work.

Get a Local Guide

If you are traveling to China you'll definitely want to find a local business representative to help show you around. Hopefully, this will be someone who comes highly recommended and who you've set up arrangements with before landing. The best guides are usually the government trade representatives between your country and China. You don't want to ask around at the airport for a guide!