Are you ready to grow your business abroad?
Before it can grow and succeed in countries outside of Canada, your company must first be export‑ready, with a realistic and credible international business plan. Here are a few questions to consider to help you get to that stage, and get started on your export journey!
1. Does your product or service have a distinct advantage over the competition in your target country?
The Trade Commissioner Service (TCS) has a Step‑by‑Step Guide to Exporting with a dedicated section on evaluating your export potential to help you determine if there's demand out there for what you're offering. There's also information to help you develop your export plan.
It's really important to have sales in Canada and to be able to demonstrate that to foreign buyers. But success in Canada doesn't necessarily mean that your offering has potential in other countries. “There may be six companies making that product in the foreign market,” says Bill Macheras, a Trade Commissioner and manager of the Info Centre at the TCS's Ontario regional office, “and they're already entrenched and probably have significant market share.”
That's why, as you evaluate your export potential and develop your export plan, ask yourself if your product or service has a competitive advantage when it comes to quality, price, uniqueness or innovation. Another key advantage is having well‑known companies, especially multinationals, as clients in Canada. “That creates instant credibility for your company, so don't hesitate to put these signature clients front and centre in your marketing,” Macheras suggests.
2. Have you undertaken foreign‑market research?
With nearly 200 countries in the world, it's very important to do research to narrow down the right one(s) for your product or service. The TCS's Step‑by‑Step Guide to Exporting can help you understand the three basic stages of foreign‑market research:
- screen potential markets;
- assess target marks; and
- draw conclusions.
The guide also explains the two main types of market research involved. There's secondary research, which can be done in Canada using the various resources that are available, many of which are online. For example, both the TCS and its partner organizations like Export Development Canada (EDC) offer country‑specific information for international business. There's also primary research, which is usually conducted abroad after the secondary research, including through direct and personal contact with potential clients or partners.
A great way to do that, Macheras suggests, is by attending a trade show in your target country. “Nothing beats actually being in the market and taking the opportunity to conduct primary research there. Just by attending a trade show in‑market, you can quickly get a sense of your competitors’ products or technologies, get a sense of pricing, and explore possible future distribution channels,” Macheras says. The TCS has a funding program, CanExport, that may help offset some of the costs related to foreign‑market visits, including costs associated with participating in a trade show abroad.
If you are targeting foreign government buyers, you can contact the Canadian Commercial Corporation (CCC) to find out if it has an existing government‑to‑government procurement agreement you can use to promote your proposal.
3. Do you have the resources to adapt your product or service to suit your target country, and sell it there?
There are costs involved with meeting regulatory standards in foreign markets, for example, or with hiring a translator in your target country who's savvy about what to emphasize and how to appeal to local customs and preferences. It can also take a lot of resources to ramp up production if orders start pouring in. That means you might have to secure financing for international sales.
It's therefore very important to have the proper resources to export, which is why Macheras emphasizes the need to ensure that your management is committed to and fully on board with your global expansion ambitions. “If it's only sales managers pushing the idea, there's not going to be resourcing for it,” Macheras says. “There has to be buy‑in from the C‑level” executives.
Don't let those considerations discourage you from going global with your business! Financial help is available from the TCS and partners like EDC and the Business Development Bank of Canada (BDC). Consult the TCS's exporting guide for more information on these sources of financial aid, and your export financing requirements more generally. For example, the TCS's CanExport program can cover up to 50% of the costs of translating, adapting or creating your marketing materials!
4. Have you thought about engaging the services of an intermediary?
There are a few types of intermediaries that can help you do business in countries outside of Canada: agents, representatives, trading houses and distributors. You can learn about the differences between them, and how they can save your business time and money, in the TCS's exporting guide.
Macheras notes that most Canadian small and medium‑sized enterprises (SMEs) enter a foreign country through a local representative, “somebody who's connected, who knows the sector and who can represent their product to foreign buyers.”
As useful as representatives and other intermediaries can be, choosing the right one can be challenging, especially for small companies. That's where the TCS and its worldwide network can help. With Trade Commissioners based in more than 160 cities around the world, the TCS can provide businesses with vetted, qualified lists of intermediaries in target countries.
The Canadian International Freight Forwarders Association is another good source for logistics help, Macheras says.
5. Do you have the capacity to provide after‑sales support and service abroad?
All elements of a Canadian business’s relationship with a foreign buyer should be considered and planned out in advance, including potentially providing support and service after the sale is made. For example, a business may end up with an integrated contract where it sells not just its machinery, but provides installation, service and technical training.
In some cases, it may be helpful to have a foreign distributor do all of that for you. The role of foreign distributors is to purchase your product or service and resell it to local customers. They also often take care of things like warranty needs, and even provide after‑sales service in the foreign country.
6. Have you thought about how intellectual property rights could affect your ability to do business in your target country?
Many Canadian businesses assume that because a product is patented or trademarked in Canada, that patent extends to other countries. It does not. The same applies to business names. The registration of intellectual property (IP) in Canada provides protection only in Canada. Similar protection must also be sought in each target country. The TCS's guide to exporting provides a list of steps to take to protect your business’s IP assets in other countries. In addition, funding from the TCS’s CanExport program may be used to cover the cost of applying for IP protection in countries outside of Canada.
While this list provides a good starting point to assess your readiness to export, there’s a lot more to know about and consider before you embark on that journey abroad.
Want to know more? Visit the TCS website to take an export readiness quiz and consult the full Step‑by‑Step Guide to Exporting.
Be sure to also check out the Business Benefits Finder, a useful tool that can help you find the right government programs and services for your needs.
And once you've completed your international business plan and your business has met all the eligibility criteria to be a TCS client, you can meet with a Trade Commissioner at a TCS regional office in Canada responsible for your specific sector to discuss the next steps.
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