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Exporting to the United States - Preparing to export to the U.S.

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2. Preparing to export to the U.S.

Forum for International Trade Training

The Forum for International Trade Training (FITT) is Canada’s international trade training and professional certification body. It sets the standards and designs the training programs through which you can acquire the professional designation of Certified International Trade Professional (CITP). Delivered by a broad network of educational partners, FITT´s training programs will provide you with the knowledge and practical skills that are essential for engaging in international trade. Refer to the FITT website for more information.

To prepare for your entry into the U.S. market, you must ensure that your company has the financial, human and production capacity to meet its demands. For a general introduction to becoming "export-ready," you might want to read Chapter 1 of the Step-by-Step Guide to Exporting.

2.1. Is there a market for your company?

Your first step is to find out whether there is, in fact, any U.S. demand for what you are offering. A good way to start this research is to look at Canada's annual exports of the type of goods you manufacture, and identify how much of this went to the U.S. This will help you estimate the size of the U.S. market for your particular product(s).

The Trade Data Online tools on Industry Canada’s website will help you determine how much export business your sector carried on in the U.S. over various time periods. However, this only tells you how much of your type of product was imported into the U.S. from Canada. For a complete picture of the U.S. import market, you will need a U.S. statistical source, such as the Bureau of Economic Analysis. Remember, also, to examine how U.S. domestic production fills the needs of the U.S. market.

These statistics still might not tell the whole story. For example, goods may be officially recorded as imports into one state, but be really destined for another. If you do not do your research, you may end up targeting the wrong market.

To retrieve the Trade Data Online information - and for many other purposes - you will need to determine the Harmonized System code (HS code) of your product. If you are not familiar with HS codes, they are an international description and coding system for commodities, and the tariffs of most countries are based on them.We will examine HS codes in more detail in Section 7.2, "Harmonized System (HS) codes."

Also valuable at the early stages of market research are the Canadian Trade Commissioner Service sectorial market studies and country-specific reports. Provided free of charge, the reports are prepared by Canada’s offices abroad.

The website of the Canadian Embassy in Washington, D.C. gives contact information for Canadian trade specialists both in the U.S. capital and in Canadian consulates across the U.S. The embassy site has a list of Canadian government offices in the U.S.

Another resource for targeted research about potential exports is Industry Canada’s sector information page. It is a handy gateway to information about major Canadian business sectors, their markets, strategies and so on.

2.2. Researching specific target markets

You will develop a better export strategy if you investigate potential markets from the very beginning of your export initiative; as you close in on the market segment that seems best for you, your research will simply become more focused. You can obtain an overview of the market research and selection process from the Step-by-Step Guide to Exporting.

This step involves reading and analyzing as many relevant market reports and publications as you can manage. Here are several Canadian and U.S. sources to help you better understand your potential market (some are repeated from Section 1.7, "Information (sources for the U.S. market")

You will make better decisions about your export strategy if you have been investigating potential markets from the very beginning of your export initiative.

2.3. Assessing your company's readiness

After identifying a market segment - perhaps a demographic or a region where your product might do well - your next step is to decide whether your company has the financial, human and production capacity to supply a market in the United States. You might consider this in the light of the following questions:

2.4. Creating your export plan

The next step is to create your export plan, because a good plan will vastly improve your company's chances of success in the United States. Your plan will also be crucial if you need financing, because financial institutions will not lend to a business that has not developed one. The Step-by-Step Guide to Exporting has an overview of export plans that you may find useful.

Your export plan will be similar in many ways to your business plan, except that it will concentrate on the conditions of the U.S. market. Among other things, it will include:

A good export plan will vastly improve your company's chances of success in the United States.

We will examine money matters in more detail in Section 5, "The Basics of Export Financing."However, financial planning is part of your export plan, so it bears mention here.

First, it may take months or even years for your U.S. export venture to show a positive return on investment. Be sure your plan accounts for this and that your operations can be sustained until either they become profitable or you choose to leave the market.

Second, a solid financial plan for your export initiative is a must. In addition to including a capital budget and a cash budget, itmust allow for fluctuations in the value of the Canadian dollar thatmay affect your profitability in the U.S.market or at home.A good financial plan is also essential if you need to approach lenders for working capital, letters of guarantee or other kinds of financial assistance.

2.5. Selecting your market

The selection of your market or markets is among the most crucial decisions of your export initiative. At this point, you will need to undertake non-documentary research such as person-to-person contacts, specialist advice and on-the-ground investigation to confirm that you are making the right choice.

To help achieve this, you can:

You will need to undertake non-documentary research such as person-to-person contacts, specialist advice and on-the-ground investigation to confirm that you are making the right choice.

The above list is not exhaustive; for more information, contact a Canada Business Network Information Officer at 1-888-576-4444.

2.6. Developing your export marketing plan

Export marketing plans are always works in progress, and successful exporters begin developing them almost as soon as they decide to go into international trade. Assuming you have done this, the final selection of your market means that you can now put the finishing touches on your own plan.

Whole books have been written about this subject, and we will not try to compete with them here; for a general overview, you might read the "Reaching the Customer" chapter of the Step-by-Step Guide to Exporting.

In the meantime, remember to consider the following in your export marketing plan:

You will also need to research the price trends for your particular product or service in the target market, so that you will understand both your competitors' pricing strategies and the buying patterns of your potential customers. At this stage, you can obtain valuable assistance from trade commissioners at the appropriate Canadian consulates in the U.S., who will be familiar with the local business environment. For a general discussion of the factors involved in establishing prices, you can also refer to the "Setting Prices" section of the Step-by-Step Guide to Exporting.

2.7. Government services for exporters

There are many government programs and services for Canadian exporters who are selecting a target market.

Your approach to advertising and promotion also requires careful thought and research. American attitudes to matters such as the environment, politics, religion and political correctness often diverge from Canadian viewpoints; attitudes also vary considerably across the U.S. As a result, marketing that works in New Brunswick may fail in Montana, and what works in Montana may fail in Louisiana. Also, if you decide to use an agency to handle your promotional materials and marketing campaign, make sure the firm — whether Canadian or U.S. — clearly understands the market you are entering.

2.8. Government training programs for U.S. - bound exporters

New exporters to the U.S., and exporters seeking to expand their existing U.S. markets, can find hands-on, practical training through ExportUSA, which focuses on export education and targets Canadian companies considering exporting to the United States. ExportUSA consists of three programs:

Missions and seminars may vary by Canadian province or by region in the U.S., depending on the location, the industry sector and the interests of the participants. A program may include the following:

The NEBS may also include:

The Export USA webinar series can help increase your knowledge on how to access the North American market. These free online seminars cover general export information, industry-specific trends and market opportunities. Attend those webinars to hear US expert speakers discuss topics such as:

Complete list of upcoming and on-demand webinars.

Further information and a list of upcoming events.

To register or to ask about the details of the programs, contact the nearest regional office of the Canadian Trade Commissioner Service.

2.9. Sourcing business opportunities

It is a good idea to keep informed about foreign bids or business opportunities for your product or service. An excellent way of doing this is to register with RFPSource.

RFPSource is a secure electronic doorway to the global e-marketplace. It matches Canadian products and services from a comprehensive capabilities database with thousands of business opportunities posted by domestic and foreign companies and governments. It operates on a fee-for-service basis, although registration is free.

RFPSource members can:

The above services are just a selection of what is offered. For more information and to register, visit www.rfpsource.ca.

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