TRADE / CRACKING THE EAST BLOC : Consultants Help Businesses Find Their Way in Unfamiliar Markets

WASHINGTON — When Eastern Europe began opening its doors to foreign investors 18 months ago, Jan Dvorak knew there were boom days ahead here in Washington. American businessmen would rush to explore opportunities in places like Prague and Budapest; they would need visas, airline tickets, hotel reservations, translation services, office space. Dvorak laid on extra employees at his Washington-based Travisa Inc.

That put him in the vanguard of a new American cottage industry: visa agencies, economic consultants, public relations firms and other service companies that supply logistic support and practical advice to U.S. businessmen on how to navigate in the unfamiliar--often unpredictable--waters of what used to be the East Bloc.

Firms such as Dvorak’s “supply the client with information to make sure we can cut through the red tape,” he explains. “Business went crazy at the beginning of the year.”

To anyone who has traveled in Eastern Europe, the need for help is apparent. Procedures and operations that seem routine here--from obtaining hotel rooms to writing a contract--can be frustrating and time-consuming in Poland, Hungary or Czechoslovakia.

And despite sweeping changes in Poland (and now, East Germany), most East European laws and business practices still are far different from those of most Western governments.

“American business has been a lot less able and a lot less ready to go into business over there” than expected, says Paul Armstrong, founder of RHA Associates, an Irvine, Calif., company that in addition to running its own Soviet-based export-import business, has started hiring out its trade expertise to others. “But the new services should take care of that.”

Although figures are hard to come by, a new directory by Global Trade Books now lists more than 250 accounting, consulting, insurance, law, travel, translation and shipping firms with specialties in the Soviet Union alone.

The company is planning to compile a similar directory this winter listing firms with East European expertise.

Some firms have been in the business for years. Wallace Johnson founded Summit Ltd., an Omaha management and consulting firm, in 1975, the heyday of detente. The company’s clients are largely agricultural firms in both the Soviet Union and the United States.

“I have personally negotiated over 30 contracts ranging from commodities, licensing and equipment sales to projects,” Johnson says.

Many other companies, like Global Trade Books itself, have only recently opened their doors--often with managers from widely varying backgrounds.

William S. Loiry, founder of Global Trade Books, became interested in U.S.-Soviet trade several years ago when he served as president of a sister-city project between Tallahassee, Fla., and the Soviet city of Krasnodar.

“The mayor of Krasnodar really emphasized the importance of trade,” Loiry remembers. “That clicked and I decided it was something I wanted to get involved in.”

He reorganized his family-owned publishing business to form Global Trade Books and its sister consulting firm, Global Trade Enterprises, last year.

Although Washington has become a magnet for many of these firms, more and more of them are sprouting in other areas, including California. RHA Associates began a year ago, after its founder, Paul Armstrong, decided to capitalize on his experience in negotiating two joint ventures of his own in 1989. He predicts that East-West trade will increase as more consulting firms come into being.

Other types of firms meet other needs.

The tortuous process of obtaining visas, for instance, has long been a source of jokes--and horror stories. But it has also created a lucrative market for visa agencies, such as Travisa, which can shepherd the whole process, often in less than two days.

“There are tremendous lines at the (Soviet) Embassy, but we know all the people by their first names and go there every day,” Dvorak says. “It is a relationship we have developed over these months and years and they will do us favors from time to time.”

Most of the consulting businesses are betting that the new markets in the Soviet Union and Eastern Europe will entice more and more American companies each year. But already there are signs that the market may have its ups and downs.

For Dvorak’s Travisa, for instance, business has been down somewhat since the spring.

“Last year (American businessmen) went over with a lot more gay abandon,” says Jill Catling, director of the agency’s New York office. “But now they realize that you have to invest quite a lot of money and quite a lot of time.”