Self Starter: Exploring Business Overseas

Holli Harris, MBA1

Through her experiences at the embassy and the geophysical firm, Harris was able to build a network of contacts that she later used in her business. She also sourced deals by attending geophysical conferences. Most of HBH's deals were supplying oil and gas exploration equipment to Russian firms, but HBH also did deals in generic pharmaceuticals and apparel. The network of contacts she developed were one of the most important assets of her business. "Russians don't trust foreigners, so it was important to be as honest as possible," says Harris. Also, on the American side of the business it was important to nurture and develop trusting relationships because of all the uncertainty of doing business in the former Soviet Union.

One of the more interesting deals HBH Trading completed was importing generic pharmaceuticals to western Siberia. The government wanted Harris to find inexpensive pharmaceuticals that were FDA-approved and could be imported in bulk. They were to be repackaged in Siberia at a low labor cost and resold. This transaction provided several challenges. First, Harris had to approach small and medium-sized companies and gain their trust. The next hurdle was the handling of the logistics: arranging for cargo space on ships, figuring out how to pack the different sized boxes in the cargo space, and ensuring that the freight arrived in Russia.

Another important deal involved the sourcing of Russian crafts for a large American discount-store chain. This experience proved to be a memorable one. Harris completed all of the due diligence, provided photographs and samples of the merchandise, and secured the supply. The discount store chain bypassed her and attempted to purchase the crafts directly. Fortunately for Harris, the Russian craftspeople refused to do business with this chain because they did not trust them. This experience underscored the importance of developing trusting relationships.

Having a one-person shop orchestrate transactions that started at $3 million threw HBH's competitors for a loop. Most of HBH's competitors were large corporations who were attempting to sell brand name products. Harris realized that cost was the most important driver in determining who would clinch a deal. She learned cost accounting skills on the job to ensure that HBH was the low cost provider. Harris adds, "It was important to do business quietly and maintain a low profile so as not to raise red flags. Large companies wanted high visibility which added to costs and also increased risks of problems such as shipments being held up."

Harris was fortunate to have the backing of her former manager, who handled the incorporation, liability issues, and most of the initial capital investment. The import/export business is unique in that it only takes one deal for the firm to be profitable. This was the case for HBH Trading which was able to cover its costs and then some after completing its first transaction. Harris knew that she was headed for business school when she began HBH; she felt that if the business did not succeed there would be low sunk costs.

Interestingly, Harris found it to her advantage to do business in a country that is reputed to be hostile towards women. Because she was the only female in the field, businessmen remembered her; she believes this helped her in clinching several important deals. Harris became tough quickly and prevented people from thinking she was a pushover just because she was female.

Says Harris of entrepreneurship, "Being an entrepreneur isn't a job, it's a way of life. It's a 24-hour thing that can consume you. I'm always thinking ahead to the next project. I get bored when things are running smoothly and want to move onto something new once things become routine."

The most valuable skill an entrepreneur needs, believes Harris, is the ability to sell yourself and your ideas to skeptical people. Also, be as genuine and honest as you possibly can; these qualities will serve an entrepreneur well in the long run. As advice for would-be entrepreneurs Harris offers, "Do your homework and know who you're doing business with. Develop good contacts and hire a good lawyer who can make airtight contracts."

All told, HBH completed six transactions in the year-and-a-half that Harris managed operations. The business is still being managed by Harris and others.

Harris is planning to return to Russia this summer as a William Davidson fellow.