Success 101: Doing Business in South Korea

To launch any effective business endeavor in South Korea, follow these 5 steps.

Buying and selling products or services in a foreign country can be confusing and scary for many business owners. This is a lesson I’ve learned the hard way, after spending years of my life both working on the ground overseas, as well as with foreign customers here in the States.

But international markets are now more accessible to American entrepreneurs than ever before. Given how connected the world has become, even small businesses can tap the immense potential of overseas customers.

South Korea is a popular market for American goods and services. With a mature and highly developed economy, the country has a large consumer segment with money to spend and tastes in products from all around the world. Moreover, the Korean people share many historical bonds with the American people and can be a friendly partner in any business dealing. In fact, the recent U.S.-Korea Free Trade Agreement (KORUS FTA) has made doing business between our countries even more attractive.

But this doesn’t mean it’s easy. On the contrary, to be successful with any business endeavor in Korea you’ll need knowledge of the market, culture and basic norms of business relations. It’s taken me time to discover this. Over the years, I’ve helped a Korean industrial company set up distribution channels in North America, and am currently in the process of helping an American company export their food products to Korea. In all cases, I have learned that it is critical to be prepared. I also believe that one can never have too much help or resources to do the job.

I founded the Atlanta Pacific Group to help businesses in the metro Atlanta area and foreign businesses in Asia build reciprocal relationships. The KORUS FTA has made doing business with Korea more accessible than ever, and we’re happy to help companies understand the unique nature of doing business in, and with, Korea.

In the spirit of offering advice, here are my top five basic tips for doing business in Korea. It’s not an exhaustive list, but instead should serve as a starting point for helping guide your Korean business ambitions.

1. Pay Attention to the Culture

Travel to the Asia Pacific region is now common for many Americans. Most business travelers have a basic understanding of Asian culture; however, much of this knowledge is based on experiences in China or Japan. It is important that business owners understand that South Korea is a unique market and different from these two.

For example, China has become used to the American way of “getting down to business,” so that time-intensive business meetings and banquets are no longer a requisite for closing deals. However, in Korea, dining and entertainment remain an important part of business culture and can be the time when real business negotiations take place.

2. Etiquette Is Important

Korean business culture is much more formal than in the U.S., and image is important. Dressing appropriately, having proper business cards and addressing your Korean colleagues with the correct title are all critical to ensuring good social etiquette and establishing strong bonds. Just as the failure to send a thank you note may spoil a first impression in the States, deals can be lost in Korea over breach of etiquette.

3. Get Personal

Personal relationships are essential to Koreans. Such relationships cannot be established over the phone or after only a few meetings. You must invest the time in Korea to successfully build these relationships.

Unlike America, Korea has very little division between personal life and professional life. Koreans are expected to keep long hours working in the office or socializing with their coworkers over dinner and drinks. They are often out until very late building these personal connections. Business dinners are generally very formal, but it is also a time to build a relationship with your Korean host. Show interest in more than just the negotiations.

4. Host a Korean Business Partner

Hosting a Korean delegation in the United States can also offer great opportunities to create good will. Koreans generally like our country, so getting them to come to the United States is not a tough sell.

However, they will want to visit a place that has extended them a welcoming hand of friendship. That means putting the effort into making the trip worthwhile, interesting, educational and fun. It’s important to be a good host and keep them busy with activities, as they would surely do the same for you in Korea.

5. Visit Korea for an Extended Period

Before I could get anywhere in my own business experiences, I first needed an extended trip to Korea, during which I had a focused mission of meeting and building contacts. In fact, I would say that is the most important key to all international trade and overseas business development.

The vast majority of hard work in international sales is based on finding the right channels and partners. You do that by taking the time to venture out onto the streets and having a plan of attack that gets you outside your hotel room.

Being on the ground in Korea and investing time there also earns you respect from Koreans. It gives the locals a chance to see you as being more than that just a clueless American aimlessly wandering their country.

Of course, being there for more than just a few days is also the best (and perhaps only) way to really get to know Korean business culture. Koreans welcome foreign investment, and make efforts to encourage business interest in the country’s diverse industries. Again, the personal relationship is important to Koreans, so a visit to Korea or an invitation to the United States is a great way to cement long-term ties.

Conclusion: Internationalize Yourself

As I mentioned in a previous post, for any entrepreneur or big picture thinker, looking outside the USA is a necessity in today’s interconnected business world. There are simply too many opportunities — for growth, learning, expansion and discovery — for any ambitious business owner or student to ignore. It’s also a critical part of making our country’s future stronger.

Korea offers a great example of this potential. By following the advice above and through taking advantage of the new and growing business opportunities under the KORUS FTA, American businesses looking to expand or partner in Korea will get started on the right foot.

I believe that establishing strong business relationships between U.S. and Korean businesses can be a catalyst for economic growth. In my view, this is both a patriotic duty to the United States and an opportunity to spur economic prosperity and create jobs.

A shorter version of this piece originally appeared here: http://www.uskoreaconnect.org/blog/2014/05/ask-the-experts-five-tips-for-success-when-doing-business-in-korea/