While 98% of all businesses in BC are small businesses, only 1.3% of these businesses export their goods abroad, according to the Small Business Profile.
What’s more, of the small percentage of BC small businesses that do export, the majority have a single focus – the United States. In 2010, 51% of exporting small businesses shipped exclusively to the U.S., which accounted for 17% of the total value of small business exports. However, in the same year the 28% of BC small business exporters that shipped exclusively to non-U.S. destinations were responsible for 61% of the value of small business exports.
With stats like these, it’s easy to see the potential for growth for small businesses that are willing to take the leap into exporting, and especially to non U.S. destinations.
Where to Export?
According to the United Nations, Canada’s Gross Product Domestic in 2011 was $1.73 trillion, while total global GDP was $70 trillion – this adds up to a lot of untapped potential for you to expand your business in the rapidly growing economies around the world.
Of course, the U.S. is an easy place to start for BC small businesses that want to export their goods. Exporting to Canada’s neighbour to the south can be less intimidating because of our shared language, similar culture and business practices and close geographical proximity. It’s a great way to “practice” your exporter skills with a familiar, nearby and less risky country.
However, ultimately aiming to diversify your markets overseas will help reduce the risk of dependency on the U.S. economy as you grow your business.
The Costs and the Benefits
Many small business owners shy away from exporting at first because of the perceived costs of getting started, or because the export registration process seems too complex to navigate on their own.
However, with a small amount of upfront investment, the pay-offs for your business can be significant. Most notably, selling your products to a variety of international markets can help protect you from local downturns in any one of the countries you deal with.
Exporting can also increase your ability to compete domestically too. Awareness of your products and services will increase, and as you market your business abroad you’ll learn new ways to promote it domestically as well.
Further, by trading in other countries you’ll learn more about foreign business practices, which will give you an edge when dealing with international firms in Canada.
Ultimately, the benefits of exporting can far outweigh the costs, but becoming a successful exporter requires commitment of resources – both people and financial – as well as solid market research and clear-headed thinking.
Need More Info?
If you’d like more information on how to start exporting, sign up for an upcoming Are You Thinking of Exporting seminar at Small Business BC, or book a one-on-one trade advisory session today.