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 Canadian manufacturers are either born as exporters, grow to be exporters or will simply have it thrust upon them. That's the reality of doing business in Canada today, says Edmée Métivier, Executive Vice-President, Financing and Consulting for BDC.
"Manufacturers all agree that the parameters are changing, in some cases dramatically. Markets are increasingly global, as is competition," she emphasizes. "In the past, the traditional path was to serve a local or regional market and then to expand perhaps across Canada, into the United States or even into Western Europe. While those types of companies still exist, there are those new companies, especially in technology and bio-medicine that are born global," she adds.
"Even among existing companies, there is a fast growing number who have found Canada to be a small pond, a limited environment for growth. Before now, the natural path led to the United States, while today it leads all over the world in countries such as China, India, and the former Eastern Bloc," she says.
With the global market opening up even further, Métivier offers sound advice on diminishing risk in your exporting initiative.
Do your research
Making the switch from domestic to international trade can be a difficult transition, she warns. Success will depend on intensive research, a detailed go-to-market strategy and a willingness to monitor activities regularly and adjust operations according to changing circumstances.
For most Canadian companies, heading south to take advantage of the US market, which is 10 times larger, has been the most popular path to exporting. Those that have taken that route have found out that the United States is not just one foreign country but 50 different jurisdictions. With that in mind, entrepreneurs are encouraged to look at each state's laws, taxation, regional consumer preferences and labor force.
The value of intensive research can not be overestimated, no matter where expansion takes place, says Métivier. "You absolutely have to know everything you can. Who are your customers? Who's your competition and what are their advantages? What can you offer your clients that will give you that necessary edge over entrenched competition," she says.
Know how you want to do business
Potential exporters should pay particular attention to the form of the business that they're setting up, whether it's an agency, a division, or a separate corporation, she advises.
Although there are no guaranteed recipes, many Canadian corporations start by dealing with local distributors and then move on to local partnerships and even wholly owned local subsidiaries as business volume grows and the economy changes.
Each of those forms of doing business will come complete with its own set of risks and rewards, adds Métivier. "The goal is to analyze each and determine what best suits your needs. Every decision has to be made in the light of the best foreseeable risks versus rewards," she says.
Perfect your management skills
There is also the key matter of management in exporting today. Managing a $10 million company in a domestic market demands different skill sets from managing a $20 million company with half those sales coming from exports, she points out. BDC Consulting can offer entrepreneurs management consulting to help them develop the necessary set of capabilities to manage an exporting project.
"The most successful companies get to know and understand local customs and preferences. They create a network of informed advisers who know the markets that have been targeted. They also recruit key local managers and then ensure that they are aligned with corporate goals and culture," she continues. The process usually demands the business owner do first-person research as well as recruiting experienced professionals to help find the right talent, Métivier says.
Get expert help
Stick a pin in a world map and you are likely to find one of BDC's clients doing business in that country, says Métivier. Not surprisingly, BDC Consulting has a large roster of consultants who have extensive experience in exporting and who have helped many clients venture into the global arena. These specialists can help entrepreneurs assess the international market and develop a structured exporting plan. BDC also offers financing to businesses, covering key areas such as dealing with increased volume in new markets, market research, and growth potential assessment.
Be agile
In the end, remember that nothing is set in stone, Métivier stresses. Success in the highly competitive, fast-changing world of global business demands your company stay nimble.
"Nothing stays the same. What you have to do is stay on top of trends and changes at both the micro and macro levels. Then you need to have the strategies in place to meet these challenges. While the risks may be great so too can be the rewards," she concludes.
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