The decline of the Canadian dollar has been a mixed blessing for the small business community.
While those who import goods from the US or have US service providers, the news is not so welcomed. But, the bad conversion rate also means local consumers tend to stay home and purchase locally, finding that their dollar no longer goes as far, over the border. This benefits the tourism industry too, not only with Canadians wanting to vacation in their homeland, but with US customers finally returning to our shores after a long drought because of the bad conversion.
One of the bigger winners of the falling loonie are the exporters. Their products and services suddenly got a whole lot more appealing to our friends down South, creating some great opportunities.
Before You Head South
Although the American market can present some great opportunities, take a moment to conduct some due diligence before you jump straight in. The US presents some 300 million people as potential clients. It’s the world’s largest economy, but it is also a varied market. Like in Canada, what may appeal to one State will not appeal to all. Where Canadian businesses do have the benefit is in the similarity of language and standard of living to help you understand those markets quicker and in more depth.
North American Free Trade Agreement (NAFTA)
Another benefit to trading with our friends in the south is NAFTA. This has been crucial to increasing opportunities for Canadian’s to export to the US for over 20 years. One of its major achievements has been to eliminate tariffs on most goods originating in the member nations, including Canada, the United States and Mexico, as well as relaxing the regulations regarding investment and cross-border trade in services.
Assessing Your Readiness for Export
After you have identified your target market, you’ll need to assess your resources to supply that market in that region, in the US. Ask yourself:
- What advantages does your product of service have that will set it above your competitors?
- Do you have the capital needed for this expansion, as well as the staff and facilities? If not can you obtain financing for expanding specifically in the US?
- Will your cash flow in your Canadian business carry your operations abroad until you received payment for the goods or services?
- Do any current products or services need to be adapted for the US market? And how will your packaging and labelling need to be amended?
Developing Your Export Plan
Like with any change in direction for your business, you need to develop a plan. Especially if you’re looking for financing.
An export plan is very similar to your business plan, except it will focus on the specific conditions of the US market. Among other things, your plan should include:
- How you will organize your export activity
- How you will logistically move and sell your product
- Your analysis of your product and how it will fit with your chosen segment of the US market
- Your market research, including sources, findings and analysis
- Your marketing plan on how you will enter the market and promote your products
- An outline of the US laws and regulations that will affect your business in your chosen market and how you will address them
- Descriptions of the logistical and risk factors of entering that market and how you plan to overcome them
- An implementation plan, including how you will prepare your current business for the change
- A financial plan on how you finance the move and your projected cash flow and revenues
Learn From the Experts
Learn more from our experienced international trade advisors about how to export your products to foreign markets in a planned and strategic way and register for our introductory seminar Are You Thinking of Exporting?
Alternatively, if you would like an in-depth one-on-one service, tailored to your product and markets, book an Export Advisory service with our advisors.