My Tips on Running a Successful Business
- By Tremayne Elson
- Oct. 24 2008 00:00
Russia has its own unique culture. If you are doing business here, one of the best pieces of advice I can give you is to learn the culture as best you can, including the language, and enjoy its riches.
When you start working here, you will notice Russians' direct manner of speaking. At first, this may seem blunt, but from their perspective Russians see the British as comically polite when they say, "Could you possibly ... If it's not too much trouble ... "
On a more serious level, bureaucracy is a significant barrier to doing business, but there are certainly ways of dealing with it and minimizing its impact. An entire service industry has been built around expediting and dealing with state bureaucracy -- from procuring visas to dealing with tax, labor law, customs, registration or licensing. You can do it yourself, of course, but it is easier and actually cheaper in the long run to give these tasks to commercial agencies. Often their fees are a fraction of the opportunity and actual costs you would incur yourself.
Despite the all-encompassing bureaucracy, I have never paid a bribe in my 15 years working in Russia, unless you count buying a few beers from a kiosk for two policemen who insisted on taking me to the station to check my visa registration. I bought the officers a Grolsch beer at the nearest kiosk. Not only did they forget all about my visa, they even drove me home. Moscow's finest taxi service.
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The credibility of the legal system also has improved significantly in recent years. The business community as a whole seems to agree that although actual legislation still has gaps and flaws, judges appear to be quite pragmatic in applying them. Although a few high-profile cases of abuse by the tax authorities make the headlines, in reality companies have been increasingly successful winning cases over the selective enforcement of the Tax Code. There is nothing to be feared here if you are running a transparent and legitimate business. There is a fear and perception that it's better not to deal with the tax authorities, but we have found them very helpful and often turn to them for free advice, which they readily give.
Crime in Moscow is no worse than any other major world city. In the course of 15 years, my apartment was burglarized once. The thieves stole a suit, an expired passport and an iron that didn't work. If you see a man in an oversized suit and matted shirt who has been detained by passport control, please contact my local police department.
Gypsy cabs are a colorful and useful part of everyday life. Call an official taxi, and it will take at least an hour to arrive, if it arrives at all. When you hail a gypsy cab, negotiate in advance and make sure you define the currency. Avoid using a cab directly outside a hotel or you may find what you thought was 150 rubles is really $150, which the driver will insist you pay -- if necessary, with the help of a brick or iron bar stored under his seat. An unwritten rule is that the passenger is never responsible for any bribes a gypsy cabdriver has to pay if he's pulled over by traffic police.
Business cards are a must. If you're doing a lot of business here, have them printed in Cyrillic. There's no particular etiquette, but it's customary to present and receive them. If you have several cards from the same person, you can use them to stop the table from wobbling at your local Shokoladnitsa coffee house.
Although you should always aim to be on time for meetings, it's generally not seen as a heinous crime if you are 10 to 20 minutes late. In fact, many clients I visit are quite surprised -- and not prepared -- if I arrive on time. One footnote, however: This rule doesn't apply to German or Swiss clients.
Particularly in the current global business environment, it's very easy to find reasons not to do business in Russia. Daily newspaper headlines tend to put Russia in a bad light. The reality is much different, however. Business in Russia can be challenging, but the right network can help overcome the hurdles. The first stop should be your home country's chamber of commerce. They can put you in contact with their members, who are usually willing to offer guidance and advice on how to get things done.
To be sure, doing business in Russia is not easy; the commercial and legal environment is much different than in the West. But this should not be a barrier for your market entry. There are always ways to get things done. If you have a will to succeed, you will.
Fulfilling your business plan will surely cost you more than you budgeted and take you much longer than you expected, but if you are smart and innovative and able to manage the Russian risks, the return on your investment will more than compensate the difficulties that you experience.
Tremayne Elson is managing director of Antal Russia Recruitment Company.