“The general who wins the battle makes many calculations in his temple before the battle is fought. The general who loses makes but few calculations beforehand.”
General Sun Tzu, writer of the book ‘the Art of War’, is a famous tactician whose strategies, developed around 500 B.C., are still being taught till this day. In his book he highlights the many different aspects of battle and indicates ways to overcome the enemy. Business today is not much different, it is vital to have the upper hand towards your competitors. The quote above highlights the importance of accumulating data to make calculations increasing the chance of future success.
During the setup phase of an organization this can indicate one has to know their market, know the competitors and know anything there is to know about local entities and so on. Some companies operate in certain industries, which are restrained or even prohibited. Other companies simply cannot compete that other, local organizations Acquiring all these aspects will grand you knowledge into whether you should fight the battle, or not.
Whenever a company has established initial success in the market, we believe the battle has just begun. Many foreign companies ran into trouble whilst operating in China because they did not keep themselves informed. This is the determinative factor which ensures success in the long run. One can only be compliant to their market all requirements of the market and every internal process within the owned entity are known.
For instance, operating a Chinese entity implies you will have to sign and stamp many documents, all written in Chinese. It is impossible to know all the details of is signed in these documents. Of course having a good team will help, but the profound difference with Western rules and regulations can make it hard to follow. Some western companies we know have been fined half their yearly turnover just because they were operating outside their business scope. Others missed certain tax requirements and ended up with equally hefty fines. Such issues can all be managed if you let an external company check all your documents at regular intervals.
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A partnership in compliance Michael Pronk