What’s the Program?
ExpaTek will enable small and medium-size businesses to access Russian market at an affordable price. We’ll do that thru a market expansion program which includes all necessary steps to sell and get settled in Russia. That means you will know where to start, how to proceed and what to comply with here. That includes regulation study, contacts development, advertising, trial sales, business planning and business maintenance. The program is shaped by similar cases of non Russian companies and utilizes our experience of servicing them since 2006. Depending on your budget and needs you can go thru a complete program or utilize its separate steps. Please have a look at each step to see the terms and decide if that’s what you are looking for.
You want a regulation study to see what it costs to make your product compliant here. That might be certification, licensing, import tariffs, quotas, customs payments and other hidden costs which will eventually affect your end price. ExpaTek will conduct a regulation study based on official sources and we request regulation bodies if something stays unclear to us.
We are in the position to receive all kinds of certificates, licenses and permits for you at a separate price. Most common is a conformity certificate which is issued within 2-3 business days. We’ll file applications in your name and fulfill all requirements from issuing authorities. We will also explain the meaning of each document and prolongation responsibilities to you. Securing the right documents in your name means compliance and solid grounds of your sales expansion in Russia.
ExpaTek will collect contacts of your potential customers on the Russian market. We will utilize latest directories, trade shows, local media, ads, professional associations, authorities and all other possible sources to build an extensive customer list for you. That will normally include company name, decision-maker, address, phone and e-mail. We will check each contact to make sure that’s operational. The prices and amount of contacts depend on the product and market structure. With the list of 30 we bring you up key players while with the list of 3 000 we go thru each Russian region to make sure you get the maximum of people and organizations you need.
If you want to emphasize sales efforts, you will normally need advertising in Russian. Here are the milestones we believe are most helpful and cost effective at the entrance level:
1. Product Rendering
Your materials should sound Russian which is more than translation. Using the right references and language forms correspond to the local mentality, people consume your information easier and remember that longer. Preparing marketing materials that way is called product rendering. ExpaTek will translate your marketing materials and render them for further distribution in Russia, the service is available for materials in English only. Please note Russian laws require that most products are supplied with user guides and labels in Russian.
2. Ads Production
Being creative is better than being aggressive. We invent images, logos and slogans which will live in people’s minds. We use colors, texts, and humor which will attract, not irritate Russian consumers. That is based on the fundamental features of your product and people’s attitude here. After your approval ExpaTek will produce the media like labels, billboards, fliers, one pagers, web banners or whatever we together consider reasonable for your advertising efforts.
3. Ads Placement
Consumption modes are different in Russia than in the developed world. We have 2 generations with different mentalities and market skills. We also have 85 regions, 22 of them are national republics with a different cultural and values heritage. That means you have to wrap and steer your advertising efforts into the right channels. That implies using your group language, images and communication platforms. Let ExpaTek wrap and steer your advertising efforts into the right direction to keep them targeted.
ExpaTek will use developed contacts to offer your product to them. We’ll use our sales staff and infra but the offer will be done in your name. One of our sales managers will learn your product, its regulation in Russia, your suggestions and then start contacting your prospective customers. He/she will speak Russian to them but English to you.
We’ll charge a flat fee of $ 3 500/month all costs included: phone calls within Russia, Moscow correspondence address, local meetings and Internet. This is the minimum and in most cases sufficient based on our experience. If you need more, like travel to distant regions, showcasing your product in Russian malls or supermarkets, you will have to reimburse the expenses. The minimum sales period is 1 month, an assigned sales manager will prepare a review of his/her activities upon the completion of each sales period. Calls will be made in your name, e-mails will be sent from your domain and you’ll keep an eye on the sales manager’s daily activities. That will save you money on English-Russian speaking staff and sales infra at the time when you just need to try your product on the Russian market. In any case, you will spend less with ExpaTek than hiring your own sales force in Russia.We believe that offering your product to the right people or organizations is best to try the market and essential to expand on it. We realize that you will grow your business faster contacting market players than doing research.
We hope ExpaTek program helps and your product proves to be a success here. Then you need to think of how to keep that up. In that case you might consider a business plan for your further activities in Russia. ExpaTek will build a business plan based on the trial sales results. That makes sales, revenue and profit projections much more realistic. That also gives a hint on the strategic choices: export vs. local presence and wholesalers vs. end users. We’ll request multiple subcontractors and service providers to calculate costs. We’ll make sure those are reliable companies and their prices are in the market. And we’ll look for your benefits in Russian legislature and business incentive programs. We’ll have discussions with you, digest the data and pull that together into a business plan with clear recommendations on how to proceed. We’ll charge from $ 3 500 per business plan, that will be in English and ExpaTek is all set to implement its milestones.
Business maintenance are business services in Russia which proved to be most valuable for ourcustomers. We offer them either as an integral part of ExpaTek program or separate:
1. Trade Representation
If you are thinking of presence in Russia but haven’t made up your mind on your own office yet, you can use ExpaTek for that. We can serve as your trade vehicle with great infrastructure. With that you’ll be able to conduct both wholesale and retail trade without creating your own infrastructure in Russia. We can offer you sign a trade representation agreement and localize your startup business with ExpaTek. That will help you sell in compliance with Russian regulation before you open your own office here. This is a great supplement to our Trial Sales tool. With trial sales you still stand responsible for drafting contracts, banking and regulation in Russia. Trade representation covers that making ExpaTek your business administrator in addition to the trial sales function. We’ll charge commission from your trade operations which means $0,00 if there are none. The commission starts from 3-5% and can be more depending on the complexity of your trade operations. ExpaTek has people with engineer’s degree and you can use them to provide technical support, installation and surveillance of your equipment in Russia.
2. Tender Bidding
You can also use ExpaTek as your tender bidder in Russia. Wear rate of Russian infrastructure is 60-70% which is higher than in other BRICS. The government is set to reinvest oil and gas revenues into infrastructure to support expanding economy. For that reason it has recently introduced tender regulations which make application process far more transparent. Another source of opportunities are tenders from big companies looking to modernize their facilities. No matter where a tender comes from, there are big opportunities for technological companies here. Russian suppliers often just do not have comparable technologies. You will submit your information in English to us and we’ll do the rest in Russian. We’ll either bid on your behalf or be your efficient clerk filling out all applications needed. That means you can lock in the whole tender process with us. We’ll charge a flat fee depending on the complexity of your documentation and tender procedures. And we have people with engineer’s degree to provide technical support, installation and surveillance of your equipment in Russia.
3. Company Formation
We’ll select the most suitable legal status for you, prepare the formation documents and file them with all kinds of application forms at the Russian authorities. The most popular choice is a Moscow based LLC (GmbH, Ltd, Srl as European equivalents) with non Russian members, the price starts from $300. Please note that company formation is a bit more formalistic in Russia than in most developped countries. For instance, right after its formation with Russian Revenue Service, a number of other authorities have to be notified of its existence. All your formation documents will have to be in Russian, part of them need to be notarized but we’ll do all that for you in a diligent and responsible manner.
4. Bookkeeping and Accounting
Russian companies have to keep minutes, registries and protocols. Authorities here rarely want to see them but you are still advised to keep them handy, that is called bookkeeping. Unless you know how to do that and have time for that, you need help. Even if your Russian company has no operations, it already bears tax reporting responsibilities before Russian state. For instance, an LLC (GmbH, Ltd, Srl as European equivalents) has to submit tax declarations each quarter, i.e. 4 times a year no matter whether you have activities or not. Russian Revenue Service has a right to check your tax files no more than once in a 3 month period. Things get a bit trickier when you start hiring because then social taxes apply which have to be streamlined into different funds. Like in any other economy, there are loopholes and different tax brackets which will save you money, all that is called accounting.
The good news is that Russia has lower tax burden on business compared to many developped economies and you can count for bigger margins here. Our experience proves that worthwhile to bundle bookkeeping and accounting as 1 package.
The price depends on the turnover but you will spend less with ExpaTek than hiring your own bookkeeper or accountant in Russia.
5. Recruitment in Russia
ExpaTek will recruit people to staff your company in Russia. Just because we launch your product here from the beginning we know well what kind of people you’ll need to keep the product successful. And just because we are in contact with you from the beginning, we know what kind of people you’ll be comfortable with. We know local professional and educational standards to secure efficient manpower. We recruit sales managers, accountants and administrative staff charging you 50% of their 1st month salaries. To give you a rough idea, an experienced sales manager in Moscow will cost you about $ 3 000, an accountant will be about $ 2 000 while administrative staff starts from $1 000 (all salaries are net).
ExpaTek will support your Russian company with its own manpower in case something goes wrong on your newly formed team. That is free within a three month period provided we have recruited the person.
ExpaTek itself was founded by sales managers who once realized that contacting potential customers is more effective and less expensive than going thru the circles of market research. That is because markets are formed by people and organizations who feel either positive or negative about your product. The more contacts you will have, the more feedback you will distill. That kind of feedback will both let you make your judgments and interact with market players from the beginning. In addition to that we have identified the most flexible and cost effective infrastructure to maximize sales in Russian business environment. And that infrastructure has become a part of our offer to foreign exporters.
We received our education abroad, worked in foreign companies and feel comfortable with non Russians. We have realized that foreigners still have many challenges in Russia beginning from the language barrier ending with infrastructure. We have realized that non experienced companies need help from someone they can trust. That help should come at a justified price and be well structured into a clear program compatible with Russian reality.
Here are a few benefits you might want to consider:
1. You will get feasibility action which is less expensive than most feasibility studies. You will validate your opportunities in Russia without heavily investing into sales infrastructure. You will save your time and efforts from bad luck originating from lack of Russian experience.
2. You will control cost selecting the complete ExpaTek program or just the steps you need. Even if we implement most of the program, its cost should not exceed $7 000 which you would normally pay for a good market research. You will pay in installments evaluating the quality of our work at each major step. Implementing the whole program, we do not tend to charge you for any insignificant action, rather try to make the whole program successful within the budget.
3. ExpaTek is an inhouse service provider which means we do not lose your money on subcontractors. That ensures high quality and very reasonable prices. On top of that, our managers own the company which provides great stimulus to do a good job for you.
4. The feedback to your product will be provided by the Russian market, not researchers. Your potential customers will be weighing all pros and cons of your product, you will hear and respond to their opinions which is possible to start doing right now. Promotion and first sales are possible before your long time “landing” here.
5. We are eager to help because we want you to be in Russia, we love our country and want it prosper. The more medium-small businesses get their foot here, the better for all us.
Here are a few facts on Russia you might find interesting:
1. Russia is the largest country in the world by territory with the population of 146 million. Russian economy ranks є6 by PPP GDP outpacing such economies as Australia, Canada, France and UK. Just 20 years ago Russia was a smaller economy than Miami.
2. Russian market is only about 20 years old, there is still enough room for a good product or service on it. People here consume more as their income grows. The average nominal salary in Russia grew from $80,00/month in 2000 to more than $900,00/month in 2014. Middle class is set to expand, and lots of consumers are still craving for products and services which are a matter of course in the developed world.
3. Russia joined WTO in 2012 which means it opened up its markets and made international trading easier for all of us. On top of that Russia is a member of Eurasian Economic Union with Armenia, Belarus, Kazakhstan and Kyrgyzstan which gives automatic entry to a single market of 182 million people, and the Eurasian Union is set to grow adding new markets and consumers.
4. We find it exciting that for the past 5 years there have opened more cafes in Moscow than did in the past 8 centuries. Russia has or is set to become є1 European car, Internet (by number of users), and children’s goods market. It is also the first market of European fruit and vegetables outside the European Union when we don’t impose sanctions against each other ofcourse :) Russia is currently the world’s largest import market for some foods including such a basic product as cheese and we can continue the list.
Yes, we know about the difficulties and barriers which still exist and will not dissolve tomorrow. We can draft a long list of them but why being negative? Throughout your professional career you probably have seen no good gain without a risk. And you need to go to new markets to grow.