Businesses come with risks and to avoid or minimize the risks, entrepreneurs need to consider some factors. Selection of foreign partners comes with its dangers and to avoid any disagreements; there should be factors or issues to consider when an organization or company is selecting its partners (Cavusgil, Knight & Riesenberger, 2016). This paper will discuss the issues that need to be considered when choosing foreign business partners.
Selection of a business partner is the most critical thing when a company is entering an emerging or unfamiliar market. Extensive investigations need to be done before any decisions are made. The first issue to look at is the legal status of the company or partner. An individual might be surprised at the number of times an organization has partnered with others and disagreed along the way because of legal matters. The partner should be registered with the statutory bodies concerned and have the necessary documents needed for any partnership. Furthermore, the intended partner should have valid and legal documents for a business and free of any charges (Cueto, n.d).
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The financial resources should also be investigated. The new business partner should have in place documented economic breakdown of the company or resources. On the other hand, the partner should be able to provide financial information from the local and international banks. The partner should also be able to provide credit information. It is discouraging to go into partnership with a firm that has its financial statements hidden.
The most important issue to consider is the business scope and commitment of the partner. An individual should be able to look for a business partner they share the same goal and deal with the similar brand. In this case, it makes it easier when making any decisions. People avoid disagreements when they share the same purpose and work towards achieving the intended objectives.
In conclusion, there are several issues to be considered when selecting a business partner. Making the right choice drives a company or business towards the right direction. Some of the issues to be looked at are the legal status of the partner, the financial resources and finally the scope and commitment of the intended partner. The right partner makes a business grow further and bigger.
References
Cavusgil, T. S., Knight, G. & Riesenberger, J. (2016). International Business: The New Realities . 4th Edition. Pearson Education
Cueto, S. (n.d ). International Business Law: Identifying Trends in International Business Law . Retrieved February 15, 2017 from http://www.slideshare.net/Scueto77/how-to-select-a-foreign-business-partner
