How to launch a regional commercial office in Russia
My friend, Boris Korol , described his experience in launching and successfully operating a regional commercial representative office of a major manufacturer.
The industry is unimportant, since such management techniques and methodic approaches can be applied in many industries and projects.
Production was in Ukraine, the representative office was opened in Russia.
Normal budget, as usual, no one allocated to anyone.
')
However, as usual.
If you want to get additional advice - call, write to him directly.
bbkorol () gmail.com
In the process of growth, companies often become crowded in the home market and Napoleonic plans appear to seize the market of neighboring states.
I will tell on the example of a successful project, how not to chop wood and not fail with a loud bang; how to find a niche in the market with minimal expenses, build a dealer network and manage sales from the head office.
Imagine that we are in charge of sales in the Ukrainian trade and production company and the generalists have been tasked with entering the Russian market at any price.
The first is 1-2 exclusive distributors, leading sales throughout the country.
The second is cooperation with major dealers (deliveries from a warehouse in Ukraine)
And the third is the opening of representation.
Let us examine each of the options in more detail.
Favorite version of smart-ass German (and not only) companies.
We are looking for a strong partner, we give an exclusive, we set a minimum sales plan under which we are guaranteed the exclusive right to represent this trademark on the market.
As soon as the market is saturated with a product, the trademark is recognizable, the dealer network is built and the distributor is going to relax the rolls and start cutting the loot - the manufacturing company opens a representative office and the exclusive distr goes to the rank of large dealers.
Everything has arrived. Tons of sracha with the manufacturer and lulz on an industrial scale for competitors are guaranteed. But since the main sales are tied to a specific product, suitcases of money are invested in building the network and marketing activities, the former exclusiveist has to shove his pride in jo ... that is, in the sand and continue operations with a decrease in rank (and often profit).
Of course, provided that the business is profitable.
In any case, when there is a choice of pride or loot, the entrepreneur in 90% of cases will choose the loot. And those 10% or less who are “Malenky, but proud of Ptyts” do not represent a key interest. Out of a working business? Your hot spot will be immediately taken by others.
A striking example is the “approach” of Karcher to Ukraine.
If you are not a mega-manufacturer of German wunderwalves, which have practically no competitors on the market (when we work in oligopoly), but simply “one of”, you do not have powerful financial and other tools to “influence” the distributor, then this is not the best option.
The likelihood that your partner will say goodbye is very high, and it will be very expensive to bite off your piece of the market.
On the other hand, if we are honest partners and do not plan a “German” scenario - where the guarantees that the exclusive distributor covers the entire territory with a network will effectively promote your product and generally will not change the profile of activity one day or leave to live abroad, because are you tired?
Where is the guarantee that the player in the TOP-5 in the market will be interested in your product and start promoting it to the detriment of the rest?
There is no guarantee.
Okay, we found a partner, we agreed on everything, looked at the growth dynamics and realized that either the distributor does not work in that format, or your product does not sell well through its channels, or substitute_your_array. Yes, you can find another company.
Question: how many years are you willing to search?
This approach is fair if your opportunities are not limited by the market, but by internal factors (production, finance, etc.) and growth is not planned.
But if you see the market and do nothing for the development of production capacity and financial base - this article is not for you.
The scheme looks like this:
Dealers - is an intermediate option, which in principle is not bad.
But there are other limitations.
The minimum scope of supply - evrofura or wagon. The need for the dealer to conduct foreign economic activity and produce customs clearance.
Of course, deliveries can also be carried out through a “buffer” company, but, as a rule, these are gray schemes that select additional cache.
In general, the total amount of deductions (services, conversion, money transfer) may be 5-6% of the delivery volume. If the margin is 12-15%, then this is at least a third of the margin.
There is always a risk that the scheme will be closed at the most inappropriate moment, and it may take an unacceptable amount of time to work out a new one. Or the risk of any claims by the fiscal authorities, especially if the declarations on the lowered invoice are practiced.
But you never know what? At the buffer companies you are not the only one so smart and beautiful - they will start to unwind the tangle, you will get money. A working business does not tolerate long delays - there are suspicions of an unplanned pregnancy.
And even if with logistics all questions are closed and the scheme works as a watch, there are two main limiting factors - the minimum volume of supply and the order of payments.
We are a medium-sized company that gnaws its place under the sun in a highly competitive market?
And you probably don’t want to freeze the turnover for a long period?
We work, most likely, on the letter of credit?
That's right, in the morning money - in the evening chairs.
But dealers in another country may have similar problems.
Supply products without money? And how will you then deal with the defaulter?
Same other country with all that it implies.
How many will agree to factoring? Perhaps the interest and risk will eat up all the margin or make the product uncompetitive for the price?
And the last question - if the monthly need of your partner is exactly half of a euro-truck? Freeze his money for two months? But what about the rhythm and attention to the assortment, which you will never plan correctly for 100%, because the buyer can come with the order "I have three hundred of the same, but only with mother-of-pearl buttons."
If he is told that the delivery time is at least two months (and taking into account production and delivery - at least three)?
Of course, he will go to competitors.
All questions from real life.
We open an office in Moscow, recruit sales staff and hire a manager. We tied under this case the IT infrastructure and .... stop stop stop
You have already studied the market in detail, know how to position yourself, all the logistics have been worked out, the product matrix has been determined and the sales plan has been built?
Not?
Then with a probability of 80% there will be a file.
Sales director, he is the head of the branch - $ 4k per month, sales 4 pieces - at least $ 1.5k, an accountant who understands foreign economic activity - $ 3k
And you will need a logistician (minimum $ 2k) and an assistant ($ 800).
You can probably find people cheaper as well, but I will doubt the professional qualities of such employees. We need a team that will tear up the market. It is clear that motivation should be tied to sales, but there is a minimum program.
Total $ 15-16k per month only for salary + taxes 26% = $ 19-20k. It is possible to pay "in an envelope", but we are building a "white" company?
UPD Tax data may be slightly out of date, as signaled by bdmalex
$ 1.5-2k office in a normal place + $ 500-600 for communication + stationery, maintenance of equipment, Internet and so on. If you invest in treshka - well.
Add another warehouse cost of at least 100 sq.m. not far from the Moscow Ring Road (up to 10km) at $ 12-15 per meter - total + + $ 1.5k
Let's match the results.
20 + 3 + 1.5 = 24.5 thousand dollars a month. These are only fixed costs, I’m not talking about variables yet.
Round up to 25 for ease of calculation.
In a year it turns out $ 300 thousand. Is there any reason?
In addition, we have forgotten the initial costs of finding personnel, preparing jobs, training, prescribing business processes and regular business trips to Moscow. And if sales do not go? What, at the end of the year to end with an operating minus?
Well, of course not!
Everything can be done completely differently.
I will now express for many may be an unclear idea, but:
you don't need an office
you do not need a warehouse with a constant volume
you do not need a director of representation and sales in Moscow
you don't need an accountant
The only one you need is a logistician.
Everything.
Forget about the "sales representatives in the region", the selection of the team of "successful sellers", secretaries, marketers and other employees in the country where you plan to open a representative office.
Thought number 2, perhaps also not the most obvious.
Do not be Napoleon! Remember how it all ended? No need to seize Moscow - go to the regions.
Then they can immediately object to me, they say, and if we are aimed at cooperation with major retail chains or are our strategic partners located in Moscow?
The question has already been answered. Strategic partners cannot be 50 or 100. And 2-3 such partners will be very superfluous.
As for the networks, start to storm them when you work through ALL logistics processes, because penalties can gobble up all the margins and lead you to a deep minus (you can believe me).
So back to the organization of representation.
The first thing you need to remember is the mantra: “give everything to outsourcing, except sales”.
Find an auditing company that will deal with the legal aspects of opening a company (most often in the form of an LLC) and accounting support.
Explain how you plan to work, from which country, where, to whom to sell, which product and so on.
See if there are reviews from companies with a similar profile of activity, whether they understand what FEA is and what it is eaten with.
If, during your dialogue, the second side takes the form of squares and you are sure that you have not told now about the purple aliens - most likely you need to look for other people.
Also, do not forget that if you exceed a certain amount of annual turnover or a certain amount of assets at the end of the year (400 or 60 million rubles, respectively), you will be assigned an external audit.
Therefore, the choice of the company that will keep the accounting support for your representative office must be approached very carefully.
Law of the Russian Federation on Auditing (read for a long time and thoughtfully)
Yes, the price of a good company for a start-up business will not exceed $ 1k per month. Isn't it true that it is cheaper than an accountant for $ 3k?
According to the current legislation, after passing through customs, a car with a cargo must arrive and unload at a specific place indicated in the declaration.
There can be more than one declaration, but the fact is that it is impossible to sell potatoes in any village from the board after crossing the border.
For those who wonder why this is the case, they can google “coastal shipping” and restrictions on them for non-residents.
On the other hand, Russia is a country where most and most of the cargo to the regions will be sent by railway transport (and preferably in containers).
Some buyers will come to your warehouse themselves, and for networks, the goods will need to be sorted and palleted and perform other operations in accordance with the standard of each network.
Naturally, the warehouse must meet the minimum standards of storage for your products, be fairly conveniently located, have normal entrances and so on.
Ideally, when the cost and size of the warehouse is dynamic - i.e. pay only for the place you occupy. Yes, yes, such miracles exist, you just need to look good.
This is the person who will be fully responsible for receiving the goods, sending the goods with the accompanying documents, monitoring the warehouse, and much more. In essence, these are your eyes and ears. And at some point even a courier.
Ideally, this is a former military man. Such people are accustomed to discipline and order. If you correctly register all the logistics processes (and it will help, because the military is more prone to formalization), you will get rid of the headache, at least in terms of stock and dispatch of the goods.
In the future, he will need an assistant or two.
In the office sits the head and sales. Since we don’t need them in Moscow, we don’t need an office either, at least in the first stage.
Question: if partners want to come to visit us?
Answer: do not want.
If you need to meet - go to your partners yourself or meet in neutral territory.
In Moscow, in general, once again, no one goes anywhere - this is a big loss of time.
They are needed (should someone sell :)), but not in Moscow.
In the end, the sales process consists of phone calls (letters, messages, etc.) and business trips.
Tell me, what's the difference where to call to Vladivostok - from Moscow or from Kiev? With modern communications technology this is completely unprincipled.
IP-telephony server in Moscow, Moscow number, VPN - and you are already working on a single network.
Of course, there must be alternative sources of communication (traditional landlines and mobile phones) in case the Internet or server falls. But these are nuances.
I am sure that any successful trading company has talented salespeople and a minimal training program.
So, future employees of the new department are usually working in your company. No need to look for strangers, nor do you need to hire an accountant - all accounting is kept by an auditing company.
Maximum will need an assistant for the preparation of primary documents.
You do not need to rent a separate office - in most cases there are already places for 3-4 people who start a project.
In general, we started in the basement with no windows next to the room of the technical staff, who at the most crucial moment of conversation with the client liked to sharpen choppers and cut metal :)
There is no need for a separate system administrator - the project is connected to the main structure or a person comes from.
In the end, you should come up with this scheme:
So, what are the advantages of building a representation according to such a scheme, besides a significant reduction in costs? Will it really work? How to overcome the psychological moments of "we are here and they are there"?
I will try to give answers to these and many other questions below.
If the company has a favorable working atmosphere, life is in full swing and the company is developing, then the people who came to sit on their pants will stand out from the big picture.
As with any startup - we need fighters who will dare and make a lot of effort to bring things to the "victorious end", that is, to reach the planned indicators (in terms of sales, profits, market coverage, etc.).
One Ukrainian production company, well, very much wanted to enter the Russian market and began to do everything according to the rules: office, equipment, warehouse, staff - all local.
Even a man who successfully conducted wholesale sales in a competitor company.
At first glance, all the components of success are in place, but ... Two attempts to bring the company to the market in both cases ended with the reduction of representation.
The first is the “traditional” approach to building distribution in a highly competitive market.
There are simple rules: either do the same thing as everyone, but then be ready for high entrance fees or look for your chip (niche, product matrix, working conditions, service, etc.) and get more results for less money.
But this is only the tip of the iceberg.
The biggest problem they face when working in the field. Yes, yes - these are people. Activity, mentality and a completely different atmosphere.
It's great when a manager is well acquainted with the values ​​of a company and a product and can create an “ant-like effect” by analogy with the parent company, but only on a local scale.
It’s great if it can create a better atmosphere and clearer and more understandable business processes than in the main office.
But as practice shows, in 99% of cases everything works out exactly the opposite.
After several months of enthusiasm, relaxation begins, the establishment of our own internal rules and in general - we get a separate mini-kingdom, which seems to obey us, but lives its own life.
And the farther, the more conflicts arise between the top management and the branch management in matters relating to strategy, management, tactical issues and others.
Because the problem of intracorporate communications is acute in many companies, where employees are located within the same building, what to say if they are in different cities or even countries?
On the other hand, the best sales manager when moving to another country is not likely to show the results that are expected of him.
After two unsuccessful attempts to enter the Russian market (while cooperating with several large Russian companies in the “delivery from a warehouse in Ukraine” mode), the top management began to analyze the reasons that led to the failure.
Superficially, they came to the conclusion that “we work poorly and spend a lot”.
As a result, the project was offered to two employees who recently graduated from the university. Moreover, sales were to be conducted from Ukraine.
One of these employees was me.
The logic was simple - the guys have an open mind, motivation and activity above the roof, they cost a penny. Even if it fails this time, the losses will be minimal.
No one expected miracles for obvious reasons.
But this solution had several positive side effects:
The communication channel has been reduced to the ability to communicate directly with decision makers in the company.
Competitive effect with other sales departments (export department, sales department in Ukraine)
Psychological confidence that the company in one day will not disappear anywhere along with all production facilities.
The opportunity to learn and quickly solve tactical tasks within the company
You are always “at hand” with the top management and the management always knows where we are, what we do, how things are going.
Accordingly, the number of "prophylactic stars", if not reduced, then their intensity decreases exactly, which is not so much demotivating.
Those. there was no division into “they [Moscow] and we [Ukraine]”, which always arises, as a rule. In addition, regular monthly payments, which without fail are dragged along by the representation colony, did not hang with the sword of Damocles.
We set the task as follows:
“Do what you want, but sales must go. Only 100% prepayment and no cash payments. ”
Less than a year after many experiments, we developed an alternative to the existing product matrix and sales system.
As it turned out, the key problem was not “working poorly and spending a lot”, and “selling not right and wrong”.
But could we find answers to all questions and develop a strategy while being away from the System? If yes, then by that time the representation would have been minimized.
On the other hand, a psychological aspect arises - we say that we are a Russian company, but physically we are in another state.
That is, we are cheating people?
How are we going to sell there without being physically in this country?
Here I ask two questions:
But does it really matter where to call? With modern technologies of Internet distribution and IP-telephony, you can organize a virtual office, whose employees are located on different continents. The only caveat - time zone accounting. We came to work by 8.00, because at that time in Moscow it was already 9.
Does it really matter where to fly, for example, to the Urals - from Kiev or Moscow? Ticket price is about the same.
About cheating.
Company resident (I'm talking about a legal entity)? Yes.
Logistics residents? Yes.
Accounting support is similar.
Now narrow the boundaries.
What is the difference between the sales department in Kharkov and Belgorod (the distance between cities is less than 100 km)? An hour by car, if you exclude the border?
Yes, in Moscow, it happens, for 4-5 hours from end to end you get. Only in the first case we have two countries, and in the second one city.
And if you need to meet in Moscow - then go to neutral territory or invite to your office exhibition.
This is a headache for many trading companies. Many companies received a minus on the basis of operating results only because they could not properly organize warehouse logistics.
The recommendations are simple.
It is necessary to determine on the basis of the commodity matrix, what should be in stock in Moscow.
It would seem - what could be easier? Here the ambush begins.
If you have 50-60 models in the product matrix, each of which can be in 5-6 variations - we get 250-360 product items.
Average up to 300.
Using the sales statistics of any department that has been working for a long time and sells a lot, you can form an approximate quantity for minimum storage in the warehouse.
But, there will always be a situation when you have 15 units of products in stock, and the client needs, for example, 17. To store 3-4 thousand units of products to take into account all the probabilities is not a very smart decision at the first stage. At a minimum - it is expensive. On the other hand, where is the guarantee that the product matrix for one country will be the same as for another? And if you have not 50-60 models, but 5-6 thousand?
It is much more reasonable to use one large warehouse where all logistics processes are already established, and in Moscow to use a temporary storage warehouse for reloading and sorting.
Here you need to make a small remark.
The only employee who is IMPOSSIBLE to outsource and conduct activities outside the representative office is a logistician.
No third-party company will care so much about the product, provide customers with high-quality services, give practical proposals and understand internal processes, like your employee, who was informed about work policies, core values ​​of the company, etc.
If you do not believe - read Tony Neck “Delivering happiness. From zero to billion. " In this book, the author paid quite a lot of attention to the proper operation of the warehouse and its importance of warehouse logistics as a whole for building a proper distribution system.
My favorite topic.
Tools - this is what is usually left "for later", not paying proper attention to them. And very, very vain!
So, what do we need to organize the work of the representative office?
Communication is the cornerstone of everything, for sales are first and foremost communication.
The most optimal channels for voice communication between different countries are ip-telephony and a regular wired / landline telephone for backup.
The second communication channel is e-mail and instant messengers (icq, gtalk, skype and others).
The third channel of communication is your website and social networks.
What do these communication channels have in common?
That's right - they all work through the Internet. Therefore, the task of choosing a provider that provides high-quality high-speed and trouble-free data transfer is number 1 in the list.
The easiest way to combine offices that are physically distant from each other into a single system is a VPN ru.wikipedia.org/wiki/VPN
Who buys the cheapest computers - that fool. When buying a computer for an employee, you cannot save on 4 things: Monitor, keyboard, mouse, RAM volume.
I will stop in more detail.
The first three components are responsible for the health and convenience of work.
As a rule, at the first stage, employees have to process large amounts of data, so the cheapest 19 ”tank slot with an aspect ratio of 16: 9 is completely inappropriate here.
A normal 22 ”monitor with a 16:10 aspect ratio (we're going to work, and not watch a widescreen movie) is now worth a penny.
Save a measly $ 20-30 and buying the cheapest monitor is a crime against humanity.
The office worker's keyboard is like a samurai’s sword.The number of enemies chopped into a vinaigrette depends not only on the skill of the samurai, but also on the quality of the sword. No need to save 5 or 10 bucks, buying frank Chinese shit. A good keyboard pays off on the very first day the employee works. With the mouse is similar.
As for the amount of RAM. At the first stage of work, we look for clients, register business processes, draw presentations, etc.
And now imagine a typical situation: a
browser in which 30-40 tabs are open, an email client, Excel with a heavy table, PDF, Word, a graphic editor, and double GIS + 1C type accounting system.
This is a typical set of simultaneously running programs (variations are possible) at the computer of an active member of the “breakthrough” team.
It would be a completely stupid decision to give the fighters a team of outdated equipment from storekeepers of a company that is buggy and slow.
Especially if for such tasks give laptops with 1 GB of memory on board.
Yes, it doesn't matter what the processor, graphics card and hard disk capacity will be. You can save on this. But on everything related to “contact” with the technique and responsiveness of the system - it is impossible to save.
Tools should not be a bottleneck in performance!
You can not dig a garden with a snow shovel and hammer nails with a wooden hammer.
Point number 2 also applies to "contact" and the fact on which ALWAYS save - telephone terminals.
What device, besides the computer, does the sales at the first stage spend the most time on? Right, behind the phone. The choice of a telephone terminal should be taken as responsibly as possible. Convenient buttons, handset, shock resistance, redialing the last 10 numbers, speakerphone, the ability to connect a headset. All this needs to be paid attention to when buying.
It will be enough one laptop for travel.
Just do not buy a 17 ”coffin weighing 4 kg and a battery life of 40 minutes. Carrying such a fool in a train is very uncomfortable. And trimmed batteries of budget models will not make this device “mobile” at all.
A device with a diagonal of up to 14 ”and a weight of up to 2 kg will be optimal.
The choice of the operating system plays absolutely no role. This can be Windows, MacOS or Linux. The main thing is the convenience of work and no holivar about the system used.
Although if we decided to save and install only legal software - our choice is one of the Linux distributions. For example, I really like Ubuntu - to myself I called it “Linux for blondes”.
The implementation of the terminal access to your work machine will be very convenient. Often on a business trip you need exactly _to_file, which you forgot to rewrite from the main working machine.
And just to see the status of payments in the accounting system or to enter data into CRM is very convenient.
I am sure that within the company a certain accounting system has been used for a long time (one of the products of 1C or alternative solutions) and the IT department will help with installation and configuration. If no one wants to help, then you can always buy 1C: Trade and Warehouse with the Russian configuration. Maybe there are better solutions - google help :)
No, this is more correct:
Oh yeah!The answer to this question most often sounds like this: “nuuu ... uh ..." and other interjections :)
Most often use Excel. Less Access. Specialized software is generally used units.
But the main thing is that someone somewhere heard about the three magic letters (no, not the ones that are written on the fences), but about CRM - Customer Relationships Management or customer relationship management.
We will talk about the problems of implementing CRM next time, here I’ll only briefly discuss the key system requirements and why it is needed at all.
First of all, you need to understand that CRM is not a program, but a concept.
Its essence is absolutely and completely analogous to the financial accounting system, but for unknown reasons, we love to take money into account, but the clients who generate this same money to us are not.
What is the similarity? We make budgets, plan payments, monitor the timeliness of the receipt of money, deductions for tax obligations, consider turnover ratios and much more.
For customers, for some reason, only the sales volume and, at best, the product matrix are analyzed.
This is not enough. This paradox for me still remains a mystery.
The roots of this phenomenon, in my opinion, lie in the lack of understanding of the importance and necessity of an accounting system for clients and a multitude of non-working options for such systems that developers give people.
According to Gartner Group estimates, 42% of licenses for the use of CRM-solutions still remain in the company as a dead weight, not finding any use in the business.
That is, on the one hand, a manager cannot clearly articulate what he needs and how it should work, on the other hand he sees an expensive solution that does not really solve his problem.
Also, you need to understand that CRM is first of all an information system and the second or third is a data storage system.
What is the fundamental difference between data and information?
I met the most complete description in Elia Goldratt’s book Hay Stack Syndrome.
In short, information is information that influences decision making. The main task of CRM is to provide the right information at the right time.
What should be the right CRM I will tell in the following publications.
The industry is unimportant, since such management techniques and methodic approaches can be applied in many industries and projects.
Production was in Ukraine, the representative office was opened in Russia.
Normal budget, as usual, no one allocated to anyone.
')
However, as usual.
If you want to get additional advice - call, write to him directly.
bbkorol () gmail.com
Inception
In the process of growth, companies often become crowded in the home market and Napoleonic plans appear to seize the market of neighboring states.
I will tell on the example of a successful project, how not to chop wood and not fail with a loud bang; how to find a niche in the market with minimal expenses, build a dealer network and manage sales from the head office.
Imagine that we are in charge of sales in the Ukrainian trade and production company and the generalists have been tasked with entering the Russian market at any price.
You can go in three ways.
The first is 1-2 exclusive distributors, leading sales throughout the country.
The second is cooperation with major dealers (deliveries from a warehouse in Ukraine)
And the third is the opening of representation.
Let us examine each of the options in more detail.
Exclusive Distributor
Favorite version of smart-ass German (and not only) companies.
We are looking for a strong partner, we give an exclusive, we set a minimum sales plan under which we are guaranteed the exclusive right to represent this trademark on the market.
As soon as the market is saturated with a product, the trademark is recognizable, the dealer network is built and the distributor is going to relax the rolls and start cutting the loot - the manufacturing company opens a representative office and the exclusive distr goes to the rank of large dealers.
Everything has arrived. Tons of sracha with the manufacturer and lulz on an industrial scale for competitors are guaranteed. But since the main sales are tied to a specific product, suitcases of money are invested in building the network and marketing activities, the former exclusiveist has to shove his pride in jo ... that is, in the sand and continue operations with a decrease in rank (and often profit).
Of course, provided that the business is profitable.
In any case, when there is a choice of pride or loot, the entrepreneur in 90% of cases will choose the loot. And those 10% or less who are “Malenky, but proud of Ptyts” do not represent a key interest. Out of a working business? Your hot spot will be immediately taken by others.
A striking example is the “approach” of Karcher to Ukraine.
What are the risks?
If you are not a mega-manufacturer of German wunderwalves, which have practically no competitors on the market (when we work in oligopoly), but simply “one of”, you do not have powerful financial and other tools to “influence” the distributor, then this is not the best option.
The likelihood that your partner will say goodbye is very high, and it will be very expensive to bite off your piece of the market.
On the other hand, if we are honest partners and do not plan a “German” scenario - where the guarantees that the exclusive distributor covers the entire territory with a network will effectively promote your product and generally will not change the profile of activity one day or leave to live abroad, because are you tired?
Where is the guarantee that the player in the TOP-5 in the market will be interested in your product and start promoting it to the detriment of the rest?
There is no guarantee.
Okay, we found a partner, we agreed on everything, looked at the growth dynamics and realized that either the distributor does not work in that format, or your product does not sell well through its channels, or substitute_your_array. Yes, you can find another company.
Question: how many years are you willing to search?
This approach is fair if your opportunities are not limited by the market, but by internal factors (production, finance, etc.) and growth is not planned.
But if you see the market and do nothing for the development of production capacity and financial base - this article is not for you.
Dealers
The scheme looks like this:
Dealers - is an intermediate option, which in principle is not bad.
But there are other limitations.
The minimum scope of supply - evrofura or wagon. The need for the dealer to conduct foreign economic activity and produce customs clearance.
Of course, deliveries can also be carried out through a “buffer” company, but, as a rule, these are gray schemes that select additional cache.
In general, the total amount of deductions (services, conversion, money transfer) may be 5-6% of the delivery volume. If the margin is 12-15%, then this is at least a third of the margin.
There is always a risk that the scheme will be closed at the most inappropriate moment, and it may take an unacceptable amount of time to work out a new one. Or the risk of any claims by the fiscal authorities, especially if the declarations on the lowered invoice are practiced.
But you never know what? At the buffer companies you are not the only one so smart and beautiful - they will start to unwind the tangle, you will get money. A working business does not tolerate long delays - there are suspicions of an unplanned pregnancy.
And even if with logistics all questions are closed and the scheme works as a watch, there are two main limiting factors - the minimum volume of supply and the order of payments.
We are a medium-sized company that gnaws its place under the sun in a highly competitive market?
And you probably don’t want to freeze the turnover for a long period?
We work, most likely, on the letter of credit?
That's right, in the morning money - in the evening chairs.
But dealers in another country may have similar problems.
Supply products without money? And how will you then deal with the defaulter?
Same other country with all that it implies.
How many will agree to factoring? Perhaps the interest and risk will eat up all the margin or make the product uncompetitive for the price?
And the last question - if the monthly need of your partner is exactly half of a euro-truck? Freeze his money for two months? But what about the rhythm and attention to the assortment, which you will never plan correctly for 100%, because the buyer can come with the order "I have three hundred of the same, but only with mother-of-pearl buttons."
If he is told that the delivery time is at least two months (and taking into account production and delivery - at least three)?
Of course, he will go to competitors.
All questions from real life.
And so we, after weighing all the pros and cons, decide the same REPRESENTATIVE OFFICE!
We open an office in Moscow, recruit sales staff and hire a manager. We tied under this case the IT infrastructure and .... stop stop stop
You have already studied the market in detail, know how to position yourself, all the logistics have been worked out, the product matrix has been determined and the sales plan has been built?
Not?
Then with a probability of 80% there will be a file.
Let's estimate some numbers
Salary fund
Sales director, he is the head of the branch - $ 4k per month, sales 4 pieces - at least $ 1.5k, an accountant who understands foreign economic activity - $ 3k
And you will need a logistician (minimum $ 2k) and an assistant ($ 800).
You can probably find people cheaper as well, but I will doubt the professional qualities of such employees. We need a team that will tear up the market. It is clear that motivation should be tied to sales, but there is a minimum program.
Total $ 15-16k per month only for salary + taxes 26% = $ 19-20k. It is possible to pay "in an envelope", but we are building a "white" company?
UPD Tax data may be slightly out of date, as signaled by bdmalex
Office and communications.
$ 1.5-2k office in a normal place + $ 500-600 for communication + stationery, maintenance of equipment, Internet and so on. If you invest in treshka - well.
Stock
Add another warehouse cost of at least 100 sq.m. not far from the Moscow Ring Road (up to 10km) at $ 12-15 per meter - total + + $ 1.5k
Let's match the results.
20 + 3 + 1.5 = 24.5 thousand dollars a month. These are only fixed costs, I’m not talking about variables yet.
Round up to 25 for ease of calculation.
In a year it turns out $ 300 thousand. Is there any reason?
In addition, we have forgotten the initial costs of finding personnel, preparing jobs, training, prescribing business processes and regular business trips to Moscow. And if sales do not go? What, at the end of the year to end with an operating minus?
Well, of course not!
Everything can be done completely differently.
I will now express for many may be an unclear idea, but:
you don't need an office
you do not need a warehouse with a constant volume
you do not need a director of representation and sales in Moscow
you don't need an accountant
The only one you need is a logistician.
Everything.
Forget about the "sales representatives in the region", the selection of the team of "successful sellers", secretaries, marketers and other employees in the country where you plan to open a representative office.
Thought number 2, perhaps also not the most obvious.
Do not be Napoleon! Remember how it all ended? No need to seize Moscow - go to the regions.
Then they can immediately object to me, they say, and if we are aimed at cooperation with major retail chains or are our strategic partners located in Moscow?
The question has already been answered. Strategic partners cannot be 50 or 100. And 2-3 such partners will be very superfluous.
As for the networks, start to storm them when you work through ALL logistics processes, because penalties can gobble up all the margins and lead you to a deep minus (you can believe me).
So back to the organization of representation.
The first thing you need to remember is the mantra: “give everything to outsourcing, except sales”.
First, accounting
Find an auditing company that will deal with the legal aspects of opening a company (most often in the form of an LLC) and accounting support.
Explain how you plan to work, from which country, where, to whom to sell, which product and so on.
See if there are reviews from companies with a similar profile of activity, whether they understand what FEA is and what it is eaten with.
If, during your dialogue, the second side takes the form of squares and you are sure that you have not told now about the purple aliens - most likely you need to look for other people.
Also, do not forget that if you exceed a certain amount of annual turnover or a certain amount of assets at the end of the year (400 or 60 million rubles, respectively), you will be assigned an external audit.
Therefore, the choice of the company that will keep the accounting support for your representative office must be approached very carefully.
Law of the Russian Federation on Auditing (read for a long time and thoughtfully)
Yes, the price of a good company for a start-up business will not exceed $ 1k per month. Isn't it true that it is cheaper than an accountant for $ 3k?
Stock
According to the current legislation, after passing through customs, a car with a cargo must arrive and unload at a specific place indicated in the declaration.
There can be more than one declaration, but the fact is that it is impossible to sell potatoes in any village from the board after crossing the border.
For those who wonder why this is the case, they can google “coastal shipping” and restrictions on them for non-residents.
On the other hand, Russia is a country where most and most of the cargo to the regions will be sent by railway transport (and preferably in containers).
Some buyers will come to your warehouse themselves, and for networks, the goods will need to be sorted and palleted and perform other operations in accordance with the standard of each network.
Naturally, the warehouse must meet the minimum standards of storage for your products, be fairly conveniently located, have normal entrances and so on.
Ideally, when the cost and size of the warehouse is dynamic - i.e. pay only for the place you occupy. Yes, yes, such miracles exist, you just need to look good.
Logist
This is the person who will be fully responsible for receiving the goods, sending the goods with the accompanying documents, monitoring the warehouse, and much more. In essence, these are your eyes and ears. And at some point even a courier.
Ideally, this is a former military man. Such people are accustomed to discipline and order. If you correctly register all the logistics processes (and it will help, because the military is more prone to formalization), you will get rid of the headache, at least in terms of stock and dispatch of the goods.
In the future, he will need an assistant or two.
Office
In the office sits the head and sales. Since we don’t need them in Moscow, we don’t need an office either, at least in the first stage.
Question: if partners want to come to visit us?
Answer: do not want.
If you need to meet - go to your partners yourself or meet in neutral territory.
In Moscow, in general, once again, no one goes anywhere - this is a big loss of time.
Salespeople and sales manager
They are needed (should someone sell :)), but not in Moscow.
In the end, the sales process consists of phone calls (letters, messages, etc.) and business trips.
Tell me, what's the difference where to call to Vladivostok - from Moscow or from Kiev? With modern communications technology this is completely unprincipled.
IP-telephony server in Moscow, Moscow number, VPN - and you are already working on a single network.
Of course, there must be alternative sources of communication (traditional landlines and mobile phones) in case the Internet or server falls. But these are nuances.
I am sure that any successful trading company has talented salespeople and a minimal training program.
So, future employees of the new department are usually working in your company. No need to look for strangers, nor do you need to hire an accountant - all accounting is kept by an auditing company.
Maximum will need an assistant for the preparation of primary documents.
You do not need to rent a separate office - in most cases there are already places for 3-4 people who start a project.
In general, we started in the basement with no windows next to the room of the technical staff, who at the most crucial moment of conversation with the client liked to sharpen choppers and cut metal :)
There is no need for a separate system administrator - the project is connected to the main structure or a person comes from.
In the end, you should come up with this scheme:
Benefits
So, what are the advantages of building a representation according to such a scheme, besides a significant reduction in costs? Will it really work? How to overcome the psychological moments of "we are here and they are there"?
I will try to give answers to these and many other questions below.
One of the main advantages of the above scheme is the "anthill effect".
If the company has a favorable working atmosphere, life is in full swing and the company is developing, then the people who came to sit on their pants will stand out from the big picture.
As with any startup - we need fighters who will dare and make a lot of effort to bring things to the "victorious end", that is, to reach the planned indicators (in terms of sales, profits, market coverage, etc.).
One Ukrainian production company, well, very much wanted to enter the Russian market and began to do everything according to the rules: office, equipment, warehouse, staff - all local.
Even a man who successfully conducted wholesale sales in a competitor company.
At first glance, all the components of success are in place, but ... Two attempts to bring the company to the market in both cases ended with the reduction of representation.
I will not arrange a detailed debriefing, I will immediately move on to what was wrong.
The first is the “traditional” approach to building distribution in a highly competitive market.
There are simple rules: either do the same thing as everyone, but then be ready for high entrance fees or look for your chip (niche, product matrix, working conditions, service, etc.) and get more results for less money.
But this is only the tip of the iceberg.
The biggest problem they face when working in the field. Yes, yes - these are people. Activity, mentality and a completely different atmosphere.
It's great when a manager is well acquainted with the values ​​of a company and a product and can create an “ant-like effect” by analogy with the parent company, but only on a local scale.
It’s great if it can create a better atmosphere and clearer and more understandable business processes than in the main office.
But as practice shows, in 99% of cases everything works out exactly the opposite.
After several months of enthusiasm, relaxation begins, the establishment of our own internal rules and in general - we get a separate mini-kingdom, which seems to obey us, but lives its own life.
And the farther, the more conflicts arise between the top management and the branch management in matters relating to strategy, management, tactical issues and others.
Because the problem of intracorporate communications is acute in many companies, where employees are located within the same building, what to say if they are in different cities or even countries?
On the other hand, the best sales manager when moving to another country is not likely to show the results that are expected of him.
After two unsuccessful attempts to enter the Russian market (while cooperating with several large Russian companies in the “delivery from a warehouse in Ukraine” mode), the top management began to analyze the reasons that led to the failure.
Superficially, they came to the conclusion that “we work poorly and spend a lot”.
As a result, the project was offered to two employees who recently graduated from the university. Moreover, sales were to be conducted from Ukraine.
One of these employees was me.
The logic was simple - the guys have an open mind, motivation and activity above the roof, they cost a penny. Even if it fails this time, the losses will be minimal.
No one expected miracles for obvious reasons.
But this solution had several positive side effects:
The communication channel has been reduced to the ability to communicate directly with decision makers in the company.
Competitive effect with other sales departments (export department, sales department in Ukraine)
Psychological confidence that the company in one day will not disappear anywhere along with all production facilities.
The opportunity to learn and quickly solve tactical tasks within the company
You are always “at hand” with the top management and the management always knows where we are, what we do, how things are going.
Accordingly, the number of "prophylactic stars", if not reduced, then their intensity decreases exactly, which is not so much demotivating.
Those. there was no division into “they [Moscow] and we [Ukraine]”, which always arises, as a rule. In addition, regular monthly payments, which without fail are dragged along by the representation colony, did not hang with the sword of Damocles.
We set the task as follows:
“Do what you want, but sales must go. Only 100% prepayment and no cash payments. ”
Less than a year after many experiments, we developed an alternative to the existing product matrix and sales system.
As it turned out, the key problem was not “working poorly and spending a lot”, and “selling not right and wrong”.
But could we find answers to all questions and develop a strategy while being away from the System? If yes, then by that time the representation would have been minimized.
On the other hand, a psychological aspect arises - we say that we are a Russian company, but physically we are in another state.
That is, we are cheating people?
How are we going to sell there without being physically in this country?
Here I ask two questions:
But does it really matter where to call? With modern technologies of Internet distribution and IP-telephony, you can organize a virtual office, whose employees are located on different continents. The only caveat - time zone accounting. We came to work by 8.00, because at that time in Moscow it was already 9.
Does it really matter where to fly, for example, to the Urals - from Kiev or Moscow? Ticket price is about the same.
About cheating.
Company resident (I'm talking about a legal entity)? Yes.
Logistics residents? Yes.
Accounting support is similar.
Now narrow the boundaries.
What is the difference between the sales department in Kharkov and Belgorod (the distance between cities is less than 100 km)? An hour by car, if you exclude the border?
Yes, in Moscow, it happens, for 4-5 hours from end to end you get. Only in the first case we have two countries, and in the second one city.
And if you need to meet in Moscow - then go to neutral territory or invite to your office exhibition.
With the staff finished, now move on to the warehouse.
This is a headache for many trading companies. Many companies received a minus on the basis of operating results only because they could not properly organize warehouse logistics.
The recommendations are simple.
It is necessary to determine on the basis of the commodity matrix, what should be in stock in Moscow.
It would seem - what could be easier? Here the ambush begins.
If you have 50-60 models in the product matrix, each of which can be in 5-6 variations - we get 250-360 product items.
Average up to 300.
Using the sales statistics of any department that has been working for a long time and sells a lot, you can form an approximate quantity for minimum storage in the warehouse.
But, there will always be a situation when you have 15 units of products in stock, and the client needs, for example, 17. To store 3-4 thousand units of products to take into account all the probabilities is not a very smart decision at the first stage. At a minimum - it is expensive. On the other hand, where is the guarantee that the product matrix for one country will be the same as for another? And if you have not 50-60 models, but 5-6 thousand?
It is much more reasonable to use one large warehouse where all logistics processes are already established, and in Moscow to use a temporary storage warehouse for reloading and sorting.
Here you need to make a small remark.
The only employee who is IMPOSSIBLE to outsource and conduct activities outside the representative office is a logistician.
No third-party company will care so much about the product, provide customers with high-quality services, give practical proposals and understand internal processes, like your employee, who was informed about work policies, core values ​​of the company, etc.
If you do not believe - read Tony Neck “Delivering happiness. From zero to billion. " In this book, the author paid quite a lot of attention to the proper operation of the warehouse and its importance of warehouse logistics as a whole for building a proper distribution system.
Tools
My favorite topic.
Tools - this is what is usually left "for later", not paying proper attention to them. And very, very vain!
So, what do we need to organize the work of the representative office?
COMMUNICATION
Communication is the cornerstone of everything, for sales are first and foremost communication.
The most optimal channels for voice communication between different countries are ip-telephony and a regular wired / landline telephone for backup.
The second communication channel is e-mail and instant messengers (icq, gtalk, skype and others).
The third channel of communication is your website and social networks.
What do these communication channels have in common?
That's right - they all work through the Internet. Therefore, the task of choosing a provider that provides high-quality high-speed and trouble-free data transfer is number 1 in the list.
The easiest way to combine offices that are physically distant from each other into a single system is a VPN ru.wikipedia.org/wiki/VPN
IRON
Who buys the cheapest computers - that fool. When buying a computer for an employee, you cannot save on 4 things: Monitor, keyboard, mouse, RAM volume.
I will stop in more detail.
The first three components are responsible for the health and convenience of work.
As a rule, at the first stage, employees have to process large amounts of data, so the cheapest 19 ”tank slot with an aspect ratio of 16: 9 is completely inappropriate here.
A normal 22 ”monitor with a 16:10 aspect ratio (we're going to work, and not watch a widescreen movie) is now worth a penny.
Save a measly $ 20-30 and buying the cheapest monitor is a crime against humanity.
The office worker's keyboard is like a samurai’s sword.The number of enemies chopped into a vinaigrette depends not only on the skill of the samurai, but also on the quality of the sword. No need to save 5 or 10 bucks, buying frank Chinese shit. A good keyboard pays off on the very first day the employee works. With the mouse is similar.
As for the amount of RAM. At the first stage of work, we look for clients, register business processes, draw presentations, etc.
And now imagine a typical situation: a
browser in which 30-40 tabs are open, an email client, Excel with a heavy table, PDF, Word, a graphic editor, and double GIS + 1C type accounting system.
This is a typical set of simultaneously running programs (variations are possible) at the computer of an active member of the “breakthrough” team.
It would be a completely stupid decision to give the fighters a team of outdated equipment from storekeepers of a company that is buggy and slow.
Especially if for such tasks give laptops with 1 GB of memory on board.
Yes, it doesn't matter what the processor, graphics card and hard disk capacity will be. You can save on this. But on everything related to “contact” with the technique and responsiveness of the system - it is impossible to save.
Tools should not be a bottleneck in performance!
You can not dig a garden with a snow shovel and hammer nails with a wooden hammer.
Point number 2 also applies to "contact" and the fact on which ALWAYS save - telephone terminals.
What device, besides the computer, does the sales at the first stage spend the most time on? Right, behind the phone. The choice of a telephone terminal should be taken as responsibly as possible. Convenient buttons, handset, shock resistance, redialing the last 10 numbers, speakerphone, the ability to connect a headset. All this needs to be paid attention to when buying.
It will be enough one laptop for travel.
Just do not buy a 17 ”coffin weighing 4 kg and a battery life of 40 minutes. Carrying such a fool in a train is very uncomfortable. And trimmed batteries of budget models will not make this device “mobile” at all.
A device with a diagonal of up to 14 ”and a weight of up to 2 kg will be optimal.
SOFT
The choice of the operating system plays absolutely no role. This can be Windows, MacOS or Linux. The main thing is the convenience of work and no holivar about the system used.
Although if we decided to save and install only legal software - our choice is one of the Linux distributions. For example, I really like Ubuntu - to myself I called it “Linux for blondes”.
The implementation of the terminal access to your work machine will be very convenient. Often on a business trip you need exactly _to_file, which you forgot to rewrite from the main working machine.
And just to see the status of payments in the accounting system or to enter data into CRM is very convenient.
On the financial accounting system.
I am sure that within the company a certain accounting system has been used for a long time (one of the products of 1C or alternative solutions) and the IT department will help with installation and configuration. If no one wants to help, then you can always buy 1C: Trade and Warehouse with the Russian configuration. Maybe there are better solutions - google help :)
About client account system.
No, this is more correct:
About client account system.
Oh yeah!The answer to this question most often sounds like this: “nuuu ... uh ..." and other interjections :)
Most often use Excel. Less Access. Specialized software is generally used units.
But the main thing is that someone somewhere heard about the three magic letters (no, not the ones that are written on the fences), but about CRM - Customer Relationships Management or customer relationship management.
We will talk about the problems of implementing CRM next time, here I’ll only briefly discuss the key system requirements and why it is needed at all.
First of all, you need to understand that CRM is not a program, but a concept.
Its essence is absolutely and completely analogous to the financial accounting system, but for unknown reasons, we love to take money into account, but the clients who generate this same money to us are not.
What is the similarity? We make budgets, plan payments, monitor the timeliness of the receipt of money, deductions for tax obligations, consider turnover ratios and much more.
For customers, for some reason, only the sales volume and, at best, the product matrix are analyzed.
This is not enough. This paradox for me still remains a mystery.
The roots of this phenomenon, in my opinion, lie in the lack of understanding of the importance and necessity of an accounting system for clients and a multitude of non-working options for such systems that developers give people.
According to Gartner Group estimates, 42% of licenses for the use of CRM-solutions still remain in the company as a dead weight, not finding any use in the business.
That is, on the one hand, a manager cannot clearly articulate what he needs and how it should work, on the other hand he sees an expensive solution that does not really solve his problem.
Also, you need to understand that CRM is first of all an information system and the second or third is a data storage system.
What is the fundamental difference between data and information?
I met the most complete description in Elia Goldratt’s book Hay Stack Syndrome.
In short, information is information that influences decision making. The main task of CRM is to provide the right information at the right time.
What should be the right CRM I will tell in the following publications.
Source: https://habr.com/ru/post/136274/
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