Maltby originally came to Moscow in 1994. At that time, things moved very fast. "I remember being told then – two years here and it's like five or six anywhere else". Well, here we are, 16 years later in real-time, but 80 or 96 years later depending on whether or not you subscribe to that point of view.
"I left for a while, then returned in 2004 with the sole objective of starting a "Consultancy Business" (whatever that was) in Moscow. I had written some software, which was able to automate an idea of my own – Project Management Audit. I'd never heard of that being done before, much less having software to do it. I wrote a Business Plan, knocked out some presentations, wrote a manual, and that was it. So, back I came, stars in my eyes, convinced I would be challenging PWC within a year, and my software beating Microsoft into a corner."
Wrong...first round to Goliath
I had no idea how to go about starting a company, or even registering and legalising one, let alone becoming one of the big four or a software provider. I was fortunate enough though, to have a very good network, and friends of friends knew the right people to talk to. I soon learned that this wasn't going to be quite as easy as I thought. Four months later, still no business, and I was beginning to think that Project Management Audit was never going to work out.
It was time to implement plan B, so I started to do Interim and Consultancy work, gradually building the new business model I wanted in the evenings and weekends. My idea was to provide management consultancy, start-up support, IT skills and market entry support. I left the Project Management Audit on the back burner for a while. Moscow was not the place to expose all the issues, problems, corruption and graft on local projects. The concept would have taken off, I'm sure, in London or New York, but Moscow has its own way of managing projects and, let's say, my solutions weren't in line. At the time there were a lot of big companies that really didn't want me telling them all about their dirty washing in a PowerPoint presentation.
Getting started
Selling yourself is selling the hardest product of all, I think - certainly in my case. Business was pretty slow, but I deliberately avoided selling into my network. I made it known, of course, and wasn't shy in publicising what I was doing, but I avoided the hard sell. I think I lost out, but on the other hand, didn't compromise the relationships, which is important to me. So I continued building the model. The original business, called "The Quantum Consultancy", began as a loose association of ex-pat managers, who knew people, could put you in contact with someone, who knew someone who was looking for somebody, and so on. It gradually morphed into something a lot more concrete.
Not long ago, I decided to change direction, and changed the company from Quantum to “Quantum Business innovation” or QBI. I now work with my wife, Anastasia, on Start Ups, Immigration, and Market Entry support. It’s a tough field, but I think more and more companies are going to be coming to us, due to the visa restrictions and labour quota problems that we face here.
Without discouraging potential entrepreneurs at this point, there are a few points to be aware of:
One of the negatives (and there are a few) is never underestimate the bureaucracy, or the ability of the various organs, and some of your associates, to frustrate your every move. There are now, fortunately, one or two companies who will do the legalisation and registration work for you, for a relatively low sum. It's worth it, but you'll still need support for accounting every quarter, even if you provide nil returns.
The banking system has a quite a few challenges for you, even just opening accounts.
You will spend a lot more time in Russia on invoicing and other associated financial paperwork than you would in a western country. That's just the way it is, unfortunately. Unless you're extremely fortunate, you will also spend a lot more time on collections.
The Notary Public or «Notarius», although relatively unheard of in the West, where it is possibly a dying breed, is alive and well in Russia. I have spent an unbelievable amount of time just waiting in line for these people to stamp and sign things apparently for no other reason than to say they've stamped and signed them.
Some time invested in learning the Russian language will be returned 10-fold. If nothing else, it shows your commitment to the place and your willingness to interact.
Accept that you are a foreigner in a place that still has a few issues dealing with you.
Look for and secure niches to build upon. Don't try to compete with local low cost operations. For example, the street corner melon-sellers will beat you hands down every time. Don't even go there.
What else do you need to look out for?
1. Trust and Ethics.
Find partners who have a real presence who you can trust to get the job done. Be wary of non-contractual agreements. Although the business environment is improving, there are still some pitfalls out there. If you get burned, don't go back. It's amazing how many people have been robbed here by the same guy twice.
2. Don't sign anything you don't understand.
Now you might develop a reputation of being something of a purist or stick-in-the-mud, but you probably won't sign your own death sentence.
This extends into being aware of where you are, what you're doing and who you are dealing with. You need some cultural awareness, some business negotiation skills, and an understanding of who is on the other side of the table, what their objectives are, and how they intend to get there. Giving in too early isn't good. If you need to concede, then get a concession in return.
3. Specialization.
You need to have specialist support in this environment. If we don't have the specialist, then we get them – we don't do half-jobs outside our remit.
4. Experience.
You may find yourself in need of people who have been here some time...there are a lot of fledgling 'experts' out there. I once saw a job advert for "a Russian GM – minimum 1 year work experience required..." One-year business boys are a feature of the landscape these days.
The business environment changes very rapidly, but other things still go quite slowly – you need to get the pace right.
5. Look for formal qualifications and proof of expertise.
People will come to you promising that they know everything there is to know about 'x'. Get them to prove it in front of you. If the guy says that he's an expert in a certain Logistics application, make him show you something you've boned-up on beforehand. You can be as tricky as you like – it's your money.
6. Have a backup plan or an exit plan in place.
Speaks for itself.
7. Communicate your business plan, especially to yourself.
A business plan will make things clear to your bank, your accountant, your partners and yourself. What success criteria have you set? Budgets, forecasts, objectives, cash flow, growth, etc. Get the basics in place. I've met some very successful people in UK, who came here with no business plan at all. I don't say it's impossible without one, but for me, working with a client who doesn't have a plan does make life a lot more difficult.
8. Network of professionals.
I can't over state how important your network is. Moscow has a number of business associations and clubs which vary in quality and effectiveness so you might want to check them out. Personally, I think that there's no substitute for the personal network, even if you find it difficult to do.
9. Import / Export, Supply Chain, Logistics and Distribution.
Probably worth an entire book, and out of scope for this text. I will say though, that I will undertake to operate in the capacity of a 4PL or Lead Logistics Provider, and choose the optimum transport provider for your business.
Biggest is not necessarily the best. We have no special allegiances, so we provide the best deal, irrespective of carrier. If you produce products, you might also want to check out the necessary requirements governing conformity, certifications and licenses.
10. Consider the correct legal form of company that you need before you set out. Check out DebitCredit – the CEO is Nikolai Koutin – who will advise and help. It will save you time and trouble.
You need to keep smiling, never lose your temper, and just adopt the way to do things. Eventually you get into the swing of things, and results start to happen.
What's the business situation in Russia now?
On a macro level, the Government has followed an interventionist policy of supporting businesses with capital injections and credit support. They've also supported Russian businesses in re-financing their foreign debt and have been quite proactive in economic measures and tax breaks.
Russia has been crisis-hit, just like the rest of the world – however, less than 1% of Russians own shares. Pre-crisis, they tended to go for consumer durables, and spend fairly liberally. Very few have mortgages, and tend to save quite well, where possible. Personal debts are comparatively low.
It's for these reasons that I think that the economy could recover faster than many other countries. For sure the stock market falls have not hit people here as directly as in the west. If these indicators mean that now's the time for you to consider the Russian market, then read on....
You'll need support with finding office space at reasonable prices, finding staff or outsourcing work, market analysis, branding, advertising, product launch and support, and basically running your business.
That's where QBI comes in. It's a one-stop shop to get businesses going in Russia. "We know that much larger companies than ourselves do that, but where does Quantum Business Innovation score?" Maltby asks rhetorically.
" We are small, but very well connected. That means if we don't have the skills on board right now, we invariably know someone we can bring in. We're dynamic, agile, and we keep our costs low. Lean is now the way to go – we know clients and prospects who have fought their way through the crisis, as have we.
"We don't have a huge presence so therefore we don't have huge overheads and that means we're very competitive. We tend to price projects, rather than offer tariffs.
"We combine European and Russian expertise. You get top management with operational expertise.
"We work very fast, as there is no management hierarchy. Clients only deal with a partner. That's Anastasia or me.
" We really know the local scene, probably better than most.
"We are independent.
"I firmly believe that this puts us in a favourable position. One problem, of course, is that outside Moscow we are not well known. To fix this a new advertising campaign will start soon, pointed at the UK, aimed at small and medium sized businesses who want to set up here. Another new direction for us is a new look to our site and a certain amount of streamlining. We're going to change the QBI scope a little, and focus on:
Start up Support, Market Analysis and Market Entry
Software, Off-shoring, Software Development and Representation
Project Management, Staff in-sourcing, Interim Management, temp / permanent staffing
Immigration, especially labour quota, residency, work permits and so on.
Supply Chain, Distribution, Collection, and Logistics, as a lead logistics provider.
"The Quantum Consultancy is now 'Quantum Business Innovation', which to me says a lot more about what we want to do. It's about creating more SME businesses here, helping them, expanding them and supporting their success. The five categories above represent the core skills of the Company partners and associates.
"We already have some of the above in place but I want to do more.
Go to Quantum's web site by clicking here
David Maltby is founder and CEO of QBI, a company specialising in helping UK businesses expand operations in and to Russia . Этот e-mail адрес защищен от спам-ботов, для его просмотра у Вас должен быть включен Javascript
