Exporting offers almost limitless growth potential for Canadian small business, but before you start prepping your product for foreign shores, you need to craft a written strategic export plan.
Exports represent a huge driver of the Canadian economy. In September 2017 alone, exporting amounted for CAD 43.6 billion in trade. And, following the recent signing of the CETA trade deal between Canada and the European Union, there’s never been more markets available to savvy business owners.
Writing an Export Plan
Your export plan should be considered an extension of your business plan. It will lay out the potential benefits and risks of exporting for your business, as well as the planned approach to hit your international sales objectives. Presenting this information clearly to lenders will provide you with extra credibility when you approach them for financial backing.
If this seems a little vague, don’t worry – help is at hand. Small Business BC offers guided export registration for small businesses looking to export, as well as an export advisory service with one of our experienced international trade advisors.
If you’ve already begun putting your plan together, set yourself up for exporting success by considering the following six tips.
Evaluate Your Business
“Exporting is a great way to grow your business! Having said that, your business must be made ‘export ready’,” said Laura Aveledo, International Trade Advisor, Small Business BC.
“You need to prepare to have exporting as a regular business initiative.”
Start the process by taking stock of your current business. Understanding the position you hold in your domestic market will help inform the decisions you make about expanding your horizons. Focus on what the operational and financial needs of your small business will be as you grow. This evaluation should take in every aspect of your business. Do you have a realistic idea of what exporting entails? Can your staff handle the extra demand of exporting? How easily can your product be transported?
Determine Your Capital Needs
Not only should your export plan include a detailed financial analysis of your business, it also needs to include the risk mitigation strategies you plan to employ. Your company will likely incur additional costs to support purchase ordering, as well as the fixed assets you might need to manufacture additional products for export. How will these be paid for? An extra that can sometimes be underestimated is the marketing cost involved in entering new markets. Have you budgeted enough to get the word out? With your goods being transported much further distances, it also pays to consider a strong business insurance package.
Do Your Research
Your export plan should feature both a comprehensive industry analysis from a global perspective, and from the point of view of the market you’re considering entering. Focus on which of your products fit best in specific markets. Take a look at what your domestic rivals are doing in this sphere. Where are they exporting to? What are they exporting? Examine the local competition in your desired export market and establish the inefficiencies in what they’re doing.
Understand the Differences
“When you are researching international markets, be open to new ways of doing things,” said Laura Aveledo.
“From customers, purchase process, to language, values, and business etiquette – local clients will be a valuable source of information, listen carefully!”
Interpreting the rules of engagement for foreign markets will put you on the front foot to export without any snags. You need to become familiar with a huge swathe of potential differences, including but not limited to: Specific labelling you may require, permits, the payment process, contract differences, regulations, cultural differences, and business practices in the market. You must be willing to commit resources to this endeavour, as there are no shortcuts.
Look for Beneficial Situations
Look for partnerships that could smooth your entry into a new market. Partner with distributors versed in international exporting. Seek out fellow small business owners who have exported into the market you’re interested in and ask their advice. Find out if there any beneficial trade agreements you can take advantage of. The more research you do on this front, the more money you could potentially save.
Keep an Open Mind
“Do not underestimate new markets, and do not think you bring the most knowledge, experience or innovation,” said Laura Aveledo.
“In most cases, there is a reason why the product or service has not been adopted. Be open, listen, and understand the market’s capabilities and limitations.”
You may be used to doing things one way on your home patch, but to make your business succeed abroad, a different approach may pay dividends. Many Canadian small businesses smooth this transition by dipping a toe into exporting via the United States. It’s a country with a similar culture, it’s logistically easy to reach, and the presence of NAFTA (North American Free Trade Agreement) ensures few tariffs or barriers to impede your growth.
Want to Learn More?
The Export Navigator Pilot offers businesses access to community-based export specialists who can provide a personalized, step-by-step approach to exporting. Businesses receive in-person guidance from an advisor with advanced knowledge in market expansion strategy.