The best thing about American business is how easy it is to start one. After a long winding road with obstacles into India business, I have renewed pride in how America opens a highway to realizing an entrepreneurial dream. The average American just doesnít understand how easy we have it here compared to other countries.
Yes, I complain [probably everyday if you ask my husband] about greater U.S. regulations, taxes, rising costs, and other general impediments to making profit here, but the American dream still lives and Iím proof. Itís here you can have an idea to fill a market need and you are free to start your company in a home office or like Microsoft, in a garage, take a calculated risk, and partake in the journey of limitless possibilities. Sure, all roads donít lead to happy endings, but we are free to explore our business grit.
So Iíll admit as a entrepreneurial woman in Texas, my perspective was a bit naive when the first thought crossed my mind to start a business in India. I know my business in the USA is micro..."scopic", but so what? And whatís my gender have to do with it? Business is business, right? Here, we hang a sign and start a business, so I thought I just needed somewhere to hang a sign in India. Turns out it wasnít that simple.
When mentioning I founded a background investigation company in the USA and India at a recent conference, Mark Golden of Golden Artist Colors Inc., New Berlin NY, asked me, "..But how did you end up in India?" I offered the following story but the reason was quite simple; I needed a solution to a critical research problem we were having here in the USA. My USA background check company was being asked to perform India backgrounds more often because India professionals were making their way to America and applying for jobs. In America, although decentralized and complex, the puzzle of performing a background is generally solved as evident by my hundreds of industry competitors. But getting solid answers for available India research was not as forthcoming. Turns out, asking questions leads to more problems when the topic is India.
So hereís the way the road looked while walking, not driving, down it.
Looking for an India vendor in 2005, a few were there willing to accept my American dollars, but I was clearly asking too many questions about standards and practices. The concepts of quality and control are business cornerstones for a reliable security company, and I was extremely displeased with the answers received from India vendors.
The next logical step was to circumvent the middle India vendors and set up a meeting with an India police commissioner. The response wasnít as positive as I had hoped. We were told we needed a filed India background investigation company to get cooperation from the police.
The search for a law firm to file corporate documents ensued. How hard could this be, right? Letís just say I was diverted to companies offering "back office" solutions more than once. I didnít want an offshore help desk, I wanted an established background check company owned and controlled by me in order to ensure the quality standards were matched to USA standards.
The news on the corporate filing front was also not good. I pressed the subject of control and ownership and was told I could not "own" the majority of an India company as an American citizen. I was told that information more than once, but I kept asking for the written law on this subject and didnít receive it. Without proof, I was determined to establish an India company. In India you have to have "street smarts". If I had listened to what I was told initially, I would currently be the proud 100% investor and 49% minority owner of someone elseís background investigation business. Lucky for me, I spent my childhood in South Philly, and my daddy didnít raise a fool. Thanks Dad.
Finally an honest lawyer (yes, they exist even in India if you keep looking) and I was home free right? Not so much. The law, I found out, requires you to have at least one India citizen as a Director and also an India citizen has to hold at least 1%. A far cry from 51% as you may have noticed, but this was the easiest part of the path. As you can imagine India citizens are not hard to find to volunteer to own a small percentage of a business and hold the title of "Director". A snag emerged; I had to be approved as an "India Director" and receive my DIN (Director of India Number.) The India government has approval of business owners/Directors of companies. So we filled out the paperwork. If you plan to follow my footsteps, make sure you live near an India consulate in the USA. You will need to go there a few times throughout the process.
Pause. Forgive the pause but the DIN was not approved the first time or second. Maybe they thought the American would go away but they obviously donít know me personally. Call it being "business stubborn" and I have a lot of that. I was not surprised when I was ultimately approved; It was the amount of elapsed time definitely trying my patience. The DIN approval opened the door to filing the corporate paperwork.
As a side note to this story, in America if you want to call your business "Aunt Ednaís Toes" for a sock manufacturing company, you are free to as long as someone else has not already grabbed that cherry picked name. In India, they choose from your provided name options so hold your business card print order. Coca-Cola would have been more like "Soda Drink Company" if it originated in India because they would have asked "whatís a Coca-Cola?" Unrecognizable made-up names for branding purposes it not preferred on their list.
In the corporate filing paperwork you have to list your commercial office space location. No, you are not approved for business yet and agencies are not keen to give leases to non-filed companies unless paid upfront for the year. The India government performs an onsite address verification visit, so at this point I asked a favor from an India business to sub-lease. How much longer was this going to take? If you have a larger business with lots of capital to get into India, Iím sure your experience will be shorter and more cooperative, but everyone will try to move you to contracts or back-office solutions instead of true majority ownership.
On March 24, 2007, Cluso Infolink Pvt. Ltd was filed in Karnataka India 90% owned by an America businesswoman. After years of what normally takes less than a week in America and a special visit to India to establish the company bank account, my India story finally took flight.
Success can be defined in the small wins over time, but the India company filing was a large win for my Texas based Cleves Research LLC. After the corporate filing, I received police and other India government agency cooperation and have gathered the information and knowledge on India research sources to build a reliable, quality controlled India background check. Excellent research sourcing is the foundation for a stellar future, so it was worth taking the time to get the sourcing right. For instance, we can identity cross-check an India citizen living in the USA or in India with the India Tax Department much the way identity is checked via the Social Security Administration with E-verify.
Cleves Research performs 1,000+ background checks per month for more than 500 USA companies and 2011 trend is $650K+. This fall our India research will be made available to the hundreds of other USA background check needing reliable India research expected to double our growth to 1.2M by EOY 2012. The good thing about the delays and barriers to entry in India is it will take lots of time and much determination for others to arrive at this same Point B.
As general advice to a small business wanting to venture outside our borders: be bold, "business stubborn", get written proof, and be patient. Other countries, and even, non-USA clients do not move as quickly as we do here in the U.S.A.
by Sharon Sutila, Founder of Cleves Research LLC (USA) and Cluso Infolink Pvt. Ltd (India)