Changing gears

Doing business in Poland is a true adventure. It is not for the faint-hearted. The reality of arriving in Warsaw to a temperature of minus 15 degrees, with a wind chill that would cut you open, alone, is not exactly fun. I knew nobody but had a business up and running in months.

The incentive was the challenge and there is business to be done. With almost 40 million people and a rapidly developing financial services sector, my market research said that Poland was to place to go and landlocked Warsaw, being the capital, was the place to start.

After an overnight train ride from Prague, I first landed at the Central Railway station which is alongside Warsaw's Palace of Culture. For a long time the tallest building in town, this was a gift from Stalin to the people of the City (though they paid) and is a grim, squared and symbolic building reflecting a period of Russian domination.

My first place berth was the Marriott Hotel opposite the Palace of Culture. My budget had no room for a $200 a night hotel - however in a new town you don't get a second chance to make a first impression. This is all they have to judge you on if you are new, want to be taken seriously and wish to recruit good people.

With low unemployment, and in particular in my area of finance, technology and media, a high demand for office space, major bureaucracy, and a difficult language, getting started from scratch is tough.

Status, position and ego are important in Polish business and psychology. Meet the average Pole and in seconds he will have almost worked out the value of your suit, shoes, branded watch and so forth. It's also still a very male dominated chauvinistic society. Simple customs such as when a male Pole greets a lady in business he kisses her hand. While quaint, this annoys many of the young Polish women I meet working in Warsaw.

In finance, the zloty has stabilised and inflation is down to below 10 per cent, a big development from the hyper inflation a few years ago when four zeros was swiped off the currency. So 40,000 zlots became just four.

Growth is at between 5 per cent and 6 per cent and while under threat from global meltdown elsewhere, it is likely to remain strong and adjusted down a little after the Russian meltdown. Like many other people in business I have been attracted by the size of the market, the countries emergence into Europe and the pace of development. Much of the country is undercapitalised - like Ireland was some time ago. Interest rates are between 16 per cent and 30 per cent - banking is underdeveloped. This is why AIB's investment in WBK Bank in Poland makes sense - though WBK as a bank still has a lot to sort out.

One time, for example, I contracted with a printer to do a job but his machine broke down. He passed us on to another printer who was keen to do the work and, on inspecting his print works, it seemed a good business. Since he needed to buy paper to start printing and offered a great price we paid him 30,000 zlots upfront (then $10,000).

The job was promised 10 days later when we returned. Nothing was done, apparently the printer got a big job in from a bank paying twice as much and used our paper. Our struggle with this printer lasted for six weeks. When he eventually started to print his machines broke down. Another time, he found two of his printers drunk and fired them, which was all very well but then he had nobody to finish our job!