The Roadmap to Successful Ventures in the Middle East Series – No 1
Working with Local Partners
By Hugh Fraser, managing partner
Welcome to the first in my new Roadmap Series, with some personal views on what does and does not work when structuring business ventures in the Middle East region.
My first theme is local partners. The right local partner with the right deal is one of the keys to success in Middle East region: their contribution to market verification/connectivity, legal compliance, localisation and logistics/services support can be crucial.
Here are my Top 5 golden rules on this theme:
- Go territory by territory NOT regional: local connections and knowledge are critical local partner inputs.
- Be realistic with timelines: a 5-year contract with appropriate break clauses is my starting point. Less than 2-3 years is simply insufficient time to build the venture and relationship up and out.
- Ensure the commercial arrangements are WIN/WIN: if the local partner is not incentivised and treated openly and fairly the venture the relationship will quickly run into the long grass or turn negative.
- Communicate proactively: regular review meetings however informal are needed to develop the relationship, to spot opportunities and to avoid friction points.
- Agree in advance the circumstances in which either party may call time on the deal: failure to achieve vendor registrations with a reasonable period and failure to achieve minimum initial sales and/or minimum annual sales once momentum has been gained should be cornerstones.