High Street Partners was founded 3 years ago to help companies deal with the challenges and frustrations of doing business overseas.
We’ve written previously about the growing trend of the micro-multinational. That trend is about companies that are very small and very young, yet have a global presence almost from the get-go.
Today, many of these micro-multinationals are operating in Web-related businesses or information or technology businesses where “place” is mostly unimportant. Typically these micro-multinationals involve people who work from their homes or remote locations and collaborate using the Internet and telecommunications. The businesses may attract customers over the Internet and distribute services or information over the Internet. However, in many cases they operate with next to no physical presence in other countries.
But what about those businesses that need a more substantial local presence in other countries — i.e., feet on the street? For instance, what about companies that need to have a sales force operating on the ground in another country? Or they need local representatives to oversee manufacturing or service or importation or distribution in other countries?
That’s the sweet spot of where High Street Partners comes in. High Street Partners helps companies deal with the many details — and avoid the many potential pitfalls — that arise when trying to set up operations or some kind of physical presence in other countries outside of the United States.
According to CEO Larry Harding, a handful of issues come up repeatedly when companies desire to expand overseas. “It’s easy to do the things that are readily apparent, but below the surface there are so many more things to look out for. It behooves companies that are in the planning stages of international expansion, to factor in the costs of compliance.” He pointed to these two typical pitfalls as examples:
- Employment Regulations and Practices — These are very different overseas. A typical pitfall might involve a company sending its U.S. offer letter to a prospective employee in the European Union, without realizing that they really need a full-blown employment contract that complies with local regulations. The ramification is that it immediately tilts the balance of power greatly to the employee, at the expense of the company, and makes termination difficult.
- Shipping and Importation — Many U.S. companies don’t have a good handle on shipping product overseas. There are a complex set of rules about importation and logistical issues. A typical pitfall is that something arrives on the dock and a duty must be paid. The company shipping ends up paying and it can be sizable — sometimes 17% — eating up the profits.
CEO Larry Harding is an evangelist when it comes to pointing out that globalization is not a fad. He says, “It’s as seismic a change as the Industrial Revolution. But we’re still at very beginning of a major change that will ripple through companies. It is much easier to be a virtual company operating globally if you have at least one person on the ground speaking the language and in the same time zone. One person can make the difference.”
One trend that Larry Harding noted was that companies are expanding overseas much earlier than they did 10 years ago. Some venture-backed companies have raised money with the dictate that they immediately establish operations in China. He says, “If you don’t have an international strategy, your competitors do.”
While High Street Partners represents organizations of all sizes, from very small to large, a typical company it represents might have 50 to 100 employees. However, some of their clients are brand new — only months old — and may have as few as 10 or 12 employees.
What’s next for High Street Partners? As companies expand their global footprints, High Street is expanding the ways they are helping companies go global. Early on they focused primarily on a few quick needs, such as handling tax and employment contacts. Now they are getting more deeply involved, on issues such as helping with recruitment and actually opening up offices in local markets to help companies entering those locales.
The weak dollar is a huge driver to expand into other markets because the value of exports is greater under a weak dollar. Another key trend they are focused on is helping non-U.S. companies enter into the U.S. market.