Franklin firm helps companies conquer world markets
Franklin firm helps companies conquer world markets
Build a better mousetrap, the saying goes, and the world will beat a path to your door. But Larry Harper, president of Ballantrae International Ltd., will tell you the world may need a little help in hearing about your mousetrap and finding your door.
“It’s something people forget,” said Harper, whose management consulting firm is based in Franklin. “In New Hampshire, we have companies with really good products that go out of business because they don’t sell, don’t market their product well.”
And, unlike charity, marketing can begin far from home.
“Say you’re a biotech company,” Harper suggested. “You may need some very sophisticated applications. If you look only in New England, you may never find it. We had a company that was looking for some very specific research and development and we found it in Finland. And because it was in Finland, with their financial setup, our client paid a fraction of what he would have paid in the U.S.”
The government in Finland subsidizes some research and development work, as long as it’s done in Finland, Harper said.
“A lot of firms don’t understand how to get their product to the right market,” he said. “The product you’re sending to Massachusetts or Connecticut may be ideal for Germany or Denmark or Italy, or even places like the Baltic states that are looking for American products. Sometimes you don’t think about taxes, you don’t think about looking at markets bigger than our own or places where people are willing to pay more money than they are here. Or someplace where there’s a real need, maybe because of a lack of technology. Maybe that’s the market for your particular product. Maybe there’s a greater demand for your product there than here.”
“Management consulting” doesn’t exactly cover all that his company does, Harper said. “Most management consulting firms don’t normally get into raising funds. That’s getting to be about 30 percent of our business. Most don’t get into matchmaking. That’s about 45-50 percent of our business.”
The matchmaking is often long-distance. While Harper estimates he has helped over 300 companies in the 16 years Ballantrae has been in business, he currently counts 11 clients — “from Russia, as far west as Chicago. As far south as Atlanta. North, as far as Finland and Sweden,” he said.
About 60 percent of the company’s work is with U.S. clients.
One of his clients is the German state of Baden-Württemberg, which, together with the city of Stuttgart, is sponsoring the German Technology Collaborating Program.
The program is targeting small to mid-size precision tools, CAD Cam and automotive tool manufacturers in Massachusetts and New Hampshire as potential partners with mid-size companies in Baden-Württemberg, the home of Daimler-Benz, Porsche and other large German firms.
“Their concept is that once the German and American firms start working together, there will be significant new opportunities and markets that will be jointly developed,” Harper said.
American and German firms working together can help each other maximize the potential in the other country’s markets, he said.
The two countries are separated not only by distance and language, but also by cultural barriers.
“Germans tend to think in black and white,” Harper said. “They’re very specific and they don’t like generalities. They like either, ‘Yes, I’m going to do it’ or ‘No, I’m not.’” Germans, far more than Americans, are fond of statistical analyses, he said. “If I were giving a German Power Point presentation, it would include reams and reams of numbers,” Harper said. “If you did that in this country, it would put people to sleep.”
Forming a fruitful partnership, domestic or international, isn’t easy, he warned. “Most companies fail at partnerships. The average starting alliance lasts about two years,” he said. “A lot of these companies start an alliance for the wrong reasons. They go to a trade show, they find a company that looks good and say, ‘Let’s get together and start working together.’ I have met people who have met somebody on an airplane and set up a partnership.” Often such shotgun marriages end in bitter separation, he said, especially when a smaller company is overly impressed with the stature of a large potential partner.
Even in partnerships of compatible companies, Harper often finds himself in the role of corporate marriage counselor, trying to help both sides overcome the rifts that often arise between business partners operating in different countries and cultures.
One example, he said, occurred early in the relationship between a Ballantrae client in Italy and its business partner in Massachusetts.
“The Massachusetts firm called us and said, ‘We’ve got a problem here. These guys pay their taxes late.’ Well, in Italy, most companies don’t even pay taxes, and if they do, there’s no fine for paying late. But they wanted to make sure the company they were dealing with was squeaky clean. So I said to them, ‘Would you pay on time if you didn’t have to?’ And they said, ‘Well, I guess we’d do the same thing.’
“A few weeks later the Italian company called up and said, ‘Every time we talk to these guys, they get their lawyers involved. And then we have to get our lawyers involved and this costs us money.’ So I said to the folks in Massachusetts, ‘Is there any chance your marketing people can deal with the partner and then take it to your in-house counsel, so you don’t necessarily have your lawyer e-mailing these guys back and forth?” They took that advice and both partners have since been “happy as a clam,” Harper said.
A market to be tapped
American legal culture can often prove a stumbling block to international partnerships, he said.
“There are still a lot of northern Italian firms that do business with a handshake,” he said. “Shake on it and send the agreement later. In the meantime, they’re ready to ship product and everything else. It’s much more easygoing. Even in places like Finland, Estonia, Sweden, the trust level is so high. They won’t deal with you unless they trust you.
The Finns are scared to death to come into the U.S. because of the litigious situation we have here. There is a certain fear that if I send my product to the United States, I’m going to get sued.”
Yet for all the talk in recent years about “the global economy,” Harper thinks businesses in New Hampshire and throughout the United States have just begun to tap the potential of overseas markets.
“Only 15 percent of Americans have passports and only about 15 percent of all companies export regularly,” he said. Many companies don’t know how to find a distributor or a market for their products. And some who find the opportunity don’t want to make the adjustments needed to deal in international markets.
Harper told the story of a company in Washington state that made a finished plywood for paneling. It had thought its product was too expensive for the European market, he said.
“Well, we went to Munich, and they got five definite orders for $2 million in product — right on the spot.” But to fill the orders, the company would have to cut the plywood in metric measures. The firm, an employee-owned company, decided not to make the conversion.
“In both the manager’s mind and my thoughts, they could have had regular German business,” Harper said. For whatever reason, the firm was less successful in domestic markets.
“That company is out of business,” Harper said.
This article appears in the February 18 2005 issue of New Hampshire Business Review