Foreign Countries Provide World of Options for Firms.

WHEN John Hazlewood told one of his advisers that he was planning to hire a team of Bulgarians to build and operate his online travel company, "he thought I had totally lost it," Hazlewood recalls.

Today, with TheStoreMaker.com up and running, Hazlewood is proving that basing his high-tech business in Bulgaria makes sense. The small country located near Romania with access to the Black Sea has a tradition of high tech skills dating back to when it was part of the Soviet Union.

Hazlewood's experience illustrates that doing business overseas isn't as difficult as one might think, and that some countries may be an untapped resource for American companies.

"During communist times, Bulgaria was producing computers," said Jonathan Kimball, desk officer for Southeast Europe at the Department of Commerce in Washington, D.C. "Now, with access to Western technology, their engineers can be highly valuable to American companies."

"There are opportunities, especially in the high-tech field because of their highly educated workforce," said Kimball. "This, combined with the low labor costs and close proximity to Europe, creates many opportunities for U.S. companies in Bulgaria."

John Hazlewood didn't just wake up one day and decide to open a business in Bulgaria. Before becoming an entrepreneur, Hazlewood was a sports agent. He had met and worked with many Bulgarians and was impressed with their drive and competitive spirit. In 1994, he recruited the Bulgarian national soccer team to train in Austin, Texas. The team surprised everyone by ranking fourth at the World Cup competition that year.

Being won over

The Bulgarians' technical expertise, coupled with low wages and an eagerness to work

with Americans convinced Hazlewood to base his company in Sofia, Bulgaria, rather than San Francisco or Austin, where his accountant, attorney and advisers live. Because the company builds free Web based travel stores, it could be based any where. Just about anyone with a Web site can apply to sell travel products.

"You can buy travel products for yourself and keep 30 percent of the commission, or sell products and services to others," explained Hazlewood, who has signed up about 1,000 Web sites so far. The company has relationships with 455 airlines, 200 hotel companies and 44 car rental agencies, according to Hazlewood, who spends about two-thirds of his time in Sofia. He said his company keeps expenses low because "our overhead is hovering at about a tenth of what it would cost in the states."

The Commerce Department's Kimball, who has visited Sofia a few times, said Bulgaria is also "politically and economically more stable than many of the other countries" in the region. It's also very cheap to live there.

Hazlewood said he pays $250 a month for a two-bedroom apartment in downtown Sofia. Sofia, the capital, is easy to get to. It's a two-and-a-half-hour flight from London.

He began recruiting workers through help-wanted ads in Bulgarian newspapers.

"All the people we interviewed had masters' degrees and doctorates," recalled Hazlewood during an interview in New York City. "The average salary was $150 a month, and we were offering $500."

Today, the company's 30 Bulgarian employees do everything from Web design and programming to providing customer service via e-mail. He outsources some telemarketing in the United States, but has no American employees.

Hazlewood credits much of his success to the financial and moral support of

experienced investors like Bobby Inman, a retired U.S. admiral and former director of the National Security Agency. Inman also served as deputy director of the Central Intelligence Agency in the early 1980s.

"Admiral Inman was the person who encouraged me to pursue it once it made sense," said Hazlewood.

Inman, who remains in close contact with Hazlewood, said he's happy with the company's progress so far.

"I'm attracted to investing if I like the technology, and the people are interesting and hard working," said Inman. "John had friendships and contacts to rely on. It was also clear that there was a very significant pool of talented people; and if they didn't know the latest systems, they had the skills and the drive to learn them quickly."

Comfortable abroad

Inman, who has invested in several high-tech companies, said he is comfortable backing an overseas venture. Because he sits on the boards of directors of several multinational corporations, including Fluor Corp., which has extensive operations in India and the Philippines, he knows the advantages and disadvantages of doing business abroad.

"The English language competence in Bulgaria isn't as high as it is in India, but there are people who are fluent, and you aren't writing software code in English," said Inman, whose Austin-based Inman Ventures has provided seed capital for two of Hazlewood's ventures.

Before the Soviet Union disbanded, its various states were known for producing different products. Inman said that Czechoslovakia, for example, was the center of rifle making, while Bulgarian engineers developed software for the government.

"Many hackers are from Bulgaria," said a business expert familiar with the region. "Bulgarians also reverse-engineered. Unix and other operating systems."

Safe capital city

Sofia, which has a downtown district paved with faux gold bricks, has a lively cafe society and many good restaurants serving wine of such high quality that it is banned for sale in the European Union, according to an analyst familiar with the country.

"It's also a very safe place to work," said Hazlewood. "I'm out at 2 or 3 a.m., and I feel very safe. Crime is probably worse in parts of New York City."

Despite the demise of many e-commerce businesses, Hazlewood is optimistic that TheStoreMaker.com will continue to grow and remain based in Bulgaria.

"Our chief operating officer is now planning to spend 50 percent of his time over there," said Hazlewood.

Jane Applegate is the author of "201 Great Ideas for Your Small Business, " and is CEO of SBTV.com, a multimedia site providing small- business resources.