How to Start Business in Russia: Tips and Tricks

OVERCOMING OBSTACLES OF ENTERING THE

RUSSIAN BUSINESS ENVIRONMENT

The new emerging global business environment has focused the attention of business and manufacturing enterprises on the largely untapped potential of the Russian consumer. The road to a successful enterprise in the Russian business environment is, however, a series of obstacles–both cultural and governmental. Before proceeding to do business in Russia one must be prepared for the following steps:

• Functioning in Russia

  The new or existing business enterprise must first decide how it will function in Russia. Affiliate companies are subject to a lot of restrictions from accreditation, licensing and so forth — most of which must be renewed periodically as required by the government. Independent companies fare better being subject to fewer restrictions. The independent can enable a business office and staff in a relatively short amount of time allowing the beginning of business at an earlier time. A Russian professional is necessary to accomplish this step at terms most reasonable and timely to the business. It is unwise to expect to accomplish this task without professional assistance from within the country.

• Marketing and Research

  Generally speaking marketing and research as provided throughout the EU and the Americas will be of little value to the enterprise hoping to reach into Russia. The cost of this general information will be money not well spent. The main concern to the new business hopeful will be to get and grow distribution arms within Russia. Restrictions, requirements and difficulties associated with Russian Customs Services, and reliability of cost efficient delivery systems cause Russians to avoid directly purchasing goods from outside the country. If you do not know someone connected with the Customs Service do not hope that you can negotiate this process to a successful and profitable result. Russian distributors have the necessary contacts to eliminate this obstacle. The simple truth is that without these distributors in place no goods or services will ever reach the Russian consumer level. Make distribution contacts first.

• Certification in Russia

  Most Goods imported to Russia are required to get certification for conformity to Russian standards, norms and rules. The certificates have to be produced, at least, in the following three cases:

  1. to Russian customs, when goods are imported into Russia.
  2. to Russian authorities when goods (whole- or retail-sale) are sold on a Russian market.
  3. to Russian authorities when a product comes to use in Russia.

  This “assessment of conformity” ensures the product’s characteristics to safety requirements. Variety of the requirements arises from the existence of different sources of danger: general, hygienic and fire requirements, requirements to the medical production and building materials, radiofrequency, electrical and industrial safety requirements, etc. Certificate of conformity (sometimes is called as quality certificate or certificate) is a result of testing and assessment of testing of the product for conformity to the safety requirements, determined by standards, norms, regulations, etc. Assessment of conformity is carried out by experts of certification bodies and other special state bodies. Knowing which of the eight certificates is required for your product, and getting the testing accomplished to the satisfaction of the certifying agency, is best handled by someone with contacts in the area of certification.

• Presentation in Russia

  Now it is time to come to Russia to present your product line to potential customers. Make arrangements first to maximize your time. Have a professional with good contacts organize and arrange a schedule that will place you in front of the most potential buyers in the least amount of time. Identification of prospective buyers for your products is key. Everyone’s time is wasted to present products that do not conform to the buyers market sector. Furthermore, do not expect that you will get time with buyers without prior arrangement.

  Another viable option is to participate in trade exhibitions. Participating in exhibitions is quite important for most companies. For some it’s a way to make new contacts and discover new technology. For others it’s a way to introduce their products and estimate their potential in a certain segment of the market. If you are familiar with the East European mentality and languages you can perhaps make these preparations yourself. If not, we suggest you allow a specialist from the host country do some, or all, of this work for you. Find someone who will:

  1. Help to choose the exhibitions which best fit the goals of your company.
  2. Reserve space and arrange stand construction.
  3. Prepare for exhibition participation.
  4. Provide travel support (hotel, transfers, etc).
  5. Organize traffic to your booth and schedule meetings.
  6. Provide translation-interpreter services before, during, and after exhibition.
  7. Arrange for printing of exhibition brochures and other exhibition publications in Russia.
• Post-Presentation Services

  Now that you have met your buyers and arranged for distribution you need to secure these relationships through written contracts, and maintain good working relationships and efficiency of service through direct communication. Russians always prefer to speak with Russians. Be certain that you have available to you professional and reliable Russian representation for the purposes of easy communication. When in Russia do as the Russians do.

Don’t let these things prevent you from participating in the business revolution that is happening in Russia. There are buyers, distributors and consumers eager for your products. The problem is only to find them. Each of these obstacles is solvable when you engage the assistance of the right people to help you. Whenever possible it is always most efficient to try to locate a company that can successfully address all of these issues on your behalf. To take services from more than one source creates a break in continuity which is both time consuming and expensive. This is avoidable, and this should be your goal. A company that operates in both Europe and Russia will be your most efficient choice. Russia is a new participant in the global business environment. It has much to offer those who know how to avail themselves, and Russia will equally benefit from the partnerships created.

(C) 2009

Dr. Svetlana Mamkina

Nexus-Europe GmbH

www.nexus-gmbh.bizwww.nexus-gmbh.biz

email: info@nexus-gmbh.biz

info@nexus-gmbh.biz

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About Author

Dr. mamkina is General Director of consulting companies: Nexus-Europe GmbH (Germany) and OOO Nexus (Russia). Dr. Mamkina has earned a Master’s Degree in Economics, a Master’s Degree in Mathematics and a PhD in Mathematics from St. Petersburg State University, ranked as one of the ten best universities in the world. She has participated in numerous international statistical and mathematical conferences alongside such notable peers as Nobel Prize winners Dr. Robert Aumann and Dr. John Nash.

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