Login or signup
36
TAXES

On the Road
 

CEOs' tales of negotiation terrors, collection nightmares and jet-lag cures.
Advertisement

The Terrors of Negotiating
Equal Exchange Inc., a $1.2-million company in Stoughton, Mass., imports organically grown coffee from small farmer-owned cooperatives around the world. Bridging cultural gaps can find marketing director Michael Rozyne and his two cofounders sharing a celebratory cow's stomach stew with their farming partners. But nothing prepared Rozyne for his visit to a cooperative in a remote rain forest in central Peru:

"I took a three-seater plane to visit a new farming cooperative, called Ashaninka's. There were no paved roads here. You either walk or fly. I got off the plane in the middle of nowhere, and I'm greeted by Cristiano, who, it turns out, is a terrorist guerrilla sent by the Shining Path (a Maoist revolutionary movement), which is curious about this businessman hooking up with the peasants. These are the most ruthless and arbitrary of revolutionaries. Fortunately, Cristiano wasn't carrying a gun, only a large knife. He aggressively questioned me about why I was there. Later he got drunk and stumbled into bed with me. He put the radio on, blaring in my ear. That's the way the night passed. I couldn't sleep. I imagined 50 versions of him slicing my throat."

Today, three years later, Rozyne happily reports that the Ashaninka's cooperative is Equal Exchange's top coffee supplier -- accounting for 25% of the 200 tons of beans the company imports annually. -- Elizabeth Conlin

* * *

Overcoming Jet Lag
Two weeks before his wedding, Jason Carlson flew to Geneva to negotiate a critical manufacturing deal for ReSound Corp., a $16-million Redwood City, Calif., maker of high-tech hearing devices, for which he is manager of production technologies. "We arrived in Geneva, dropped our bags at the hotel, rented a car, and drove two hours to Méribel for the winter Olympics. We returned at 9 p.m., then got up the next morning to have our meeting," says Carlson. After three days of round-the-clock negotiations, he returned to California. "I got back here late Thursday afternoon and was back at work Friday morning." He briefed his staff, hammered out the manufacturing agreement, got married, then departed on a honeymoon tour of the South Pacific.

Throughout, he remained rested. Carlson followed a plan prepared by Jet-Ready Travel Services, in Woodside, Calif., a company that used software called Jet-Ready to analyze flight information and prepare a customized program to eliminate jet lag. Jet-Ready was developed by Bill Ashton, based on the research of chronobiologist Dr. Charles Ehret. A shift in time zones throws your body out of sync, says Ehret, but your body clock is "like a spring-driven watch that can be reset." Ehret's system uses an alternating high-protein, high-carbohydrate diet; limited caffeine intake; and physical activity to trick your body into resetting its internal clock.

Jet-Ready itineraries are available for $25. Have your travel agent call 415-851-4484 for more information. Ehret's Overcoming Jet Lag (Berkley, 800-223-0510, 1983, $7.95) makes chronobiology accessible to lay people. Send a self-addressed, stamped envelope to Argonne National Laboratory (Office of Public Affairs, 9700 S. Cass Ave., Argonne, IL 60439) for a free wallet-size card that simplifies the program. -- Donna Fenn

* * *

Collection Nightmares
"I accept that companies outside the United States typically pay in 120 to 150 days instead of 30 to 60 days," says Richard Holcomb, cofounder of Pioneer Software Inc., in Raleigh, N.C. "The bad-debt ratio is the real problem." Holcomb, whose $8-million business sells software in the United States, Europe, and Australia, writes off less than 1% of his U.S. receivables as uncollectible. He writes off five times as much from European sales.

"If a foreign customer owes $25,000 and doesn't pay, it isn't worth pursuing," says Holcomb. "We'd have to pursue the claim in its courts and hire a lawyer in its country, and we'd have to track it all from over here. It would cost us more to collect than we'd receive."

But Holcomb believes sales -- even the uncollectible ones -- are justified at any price. "It costs us $1 million to $2 million to produce our first copy of the software and then only about $5 for each additional copy. So why not sell as many copies as we can?"

Still, he's converting his European sales agents into foreign affiliates who will make sales and collect receivables. "Once we've got a legal presence there, I'm hoping it will be easier to collect and pursue overdue accounts."

-- Jill Andresky Fraser

* * *

HOW BAD CAN COLLECTION GET?

Whereas receivables from U.S. companies take an average of 42 days to collect, it's not so easy to collect foreign receivables. To the right are 12 countries where conditions currently are especially difficult, according to New York City based Finance, Credit & International Business (FCIB), the international branch of the National Association of Credit Management. When dealing with customers in these or other problem countries, Russell Peach, FCIB's president, suggests taking one of the following precautions: "Try first for payment in advance. If you can't get that, aim for a letter of credit, which you can make even more secure by getting it confirmed by a U.S. bank."

Average Days Country Outstanding
Iran 310

Syria 175

Kenya 143

Ethiopia 138

Argentina 121

Uruguay 120

Tunisia 116

Chile 109

Ecuador 107

Cameroon 106

Morocco 105

Algeria 103

(United States 42)

Sources: "Extracts of the Quarterly Credit and Collection Surveys," based on six-month averages reported by FCIB's 800-plus multinational members, New York City, 1992; and Credit Research Foundation, Columbia, Md. n

Last updated: Mar 1, 1993




Register on Inc.com today to get full access to:
All articles  |  Magazine archives | Comment and share features
EMAIL
PASSWORD
EMAIL
FIRST NAME
LAST NAME
EMAIL
PASSWORD

Or sign up using: