The process of building your own export strategy will be made much simpler if you rely on the expert advice available from these four key export partners:
- Business Development Bank of Canada (BDC)
- Trade Commissioner Service (TCS)
- World Trade Centre—Trade Accelerator Program (TAP)
- Export Development Canada (EDC)
Representatives from each organization took part in our recent webinar, Action plan: Mapping out your export strategy. The program also included helpful insights from exporting panellist, Kevin Klaassen, co-founder and chief executive officer of SK2 Custom Homes based in Manitoba. Klaassen has used each of these export partners to develop and execute his own successful export strategy. By following these basic steps in building your plan—and forging partnerships with these export facilitators—you’ll be ready to take on international markets, grow your business and your bottom line.
Step 1: Determine if you’re ready to export
Before you contemplate doing business in a new international market, make sure your company is firing on all cylinders back home. Are you ready organizationally, operationally and financially? Use these resources to find out.
- Export quiz: Are you ready? This quick, 15-question assessment tool offers a basic primer to get you in the headspace of where your company needs to be before it’s ready to export.
- Step-by-step guide to exporting: Available in HTML or PDF format, this guide covers each step in the export journey—from assessing your export potential to understanding the legal side of international trade.
- International readiness assessment: Offered through BDC’s advisory services, this three-hour interview of your management team will analyze your organizational and operational strengths and weaknesses, as well as your financial standing to evaluate your company’s capacity to support international growth. Other BDC resources and articles to explore:
- Financial ratio, calculator and benchmarking tools
- 7 key questions your export plan should answer
- 3 essential steps for entering a foreign market
- 5 tips to successfully export your services
Step 2: Analyze which international markets are best for you
Once you’ve determined that you’re ready to export, you need to analyze which markets will yield the highest returns for your product or service. That includes having a thorough understanding of your competition and how to tweak your value proposition to stand out from the crowd. Conducting preliminary market research using reputable online sources is key. To get you going, here are three free options.
- Trade Data Online: This searchable tool enables you to enter your harmonized system (HS) code to generate customized reports on which countries are buying your type of products.
- Trade Commissioner Service—Market Reports: Access more than 200 reports with specific information about your sector or product. Once you’ve done your own research and narrowed down your top two markets, contact a trade commissioner for a free market potential assessment.
- U.S. Commercial Service: Although intended for American companies, much of the information available on this site is equally relevant to Canadian companies in terms of international market demand. Each Country Commercial Guide provides eight important factors to help you decide if a market is right for you.
- Trade shows: One of the most efficient, cost-effective ways to verify market potential is by attending a trade event or trade mission. You can search for trade events where TCS will be present or contact your industry association to see if they’ll be participating in an event in your country of interest.
Step 3: Create your market entry strategy
A market entry strategy defines the process of getting your products or services into the hands of your customers. There are many different ways to do that, depending on what you’re selling, your financial situation, potential markets and the length of your sales cycle, to name just a few factors. In fact, part of the market research you do during Step 2 above will help inform the best way to sell into your new market.
- Direct sales: One of the more traditional avenues, this involves direct sales generated by in-person contact during a tradeshow, for example.
- Agents and distributors: Finding in-market representatives to sell your product and service is an efficient way to plug into local knowledge of customers, preferences and logistics. If this mode proves successful, over time it’s usually replaced by a company’s own dedicated local sales team, or through mergers and acquisitions.
- E-commerce: This fast-growing strategy is experiencing explosive growth. Today, e-commerce represents $1.4 trillion in annual trade revenue, a number that’s expected to reach $5 trillion within the next two years. Ensure you have a world-class website, and if you choose to use an online marketplace, use the leading one in each key market. Amazon might be the North American leader, but in China, it’s Tmall, JD, or Kaola, depending on what you’re selling.
Step 4: Get financing and minimize risk
While doing business in international markets vastly improves your sales potential, it requires additional financing, plus it comes with its own set of risks. While traditional banks are an invaluable resource, they can be hesitant to offer the kinds of financing required to go global. Here are some solutions offered through Canada’s trade-related organizations.
- CanExport: If you’re exploring a new market, this TCS program for small- and medium-sized enterprises (SMEs) provides funding to cover up to half of your international market development activities.
- Xpansion Loan: This BDC solution provides the financing required for growth, without putting your cash flow at risk. It offers flexible repayment terms with limited personal risk.
- Purchase Order Financing: A joint EDC-BDC initiative, this solution covers up to 90% of your PO amount, enabling you to take on larger contracts, while preserving your line of credit and working capital.
- Credit Insurance: EDC’s credit insurance covers up to 90% of your losses should your customer be unwilling or unable to pay for your goods or services.
- Foreign Exchange Facility Guarantee: Currency fluctuations can take the win out of your sales, but this EDC solution protects against foreign exchange risk without posting collateral.
Your go-to trade partners
BDC is the only bank devoted exclusively to Canadian entrepreneurs. They offer flexible business loans, venture capital and advisory services. They help SMEs work smarter with practical advice on business management, increasing revenues and optimizing operations. They can help prepare you for innovation, growth and international expansion by ensuring your business is more agile and efficient. They provide coaching for small businesses and can help you prioritize your digital investments. For companies with an aggressive expansion agenda, check out the Growth Driver Program.
With more than 1,000 trade experts working in 160-plus locations around the world, the TCS provides knowledgeable on-the-ground support that will get you exporting faster and better. Begin by reaching out to a trade commissioner here in Canada. They’ll help prepare you to export, then put you in touch with the international trade officers in your most promising market. Those in-market commissioners will introduce you to the trade partners you’ll need to succeed—from lawyers, accountants, translators and cultural interpreters to agents and distributors, customs brokers, government officials and potential customers.
The World Trade Centres located throughout Canada offer trade-enabling programs, including the hugely successful Trade Accelerator Program. Originally offered through the World Trade Centre in Toronto, it’s now available in major cities across the country, so search for the one nearest you. TAP Canada provides training, workshops and exposure to leading exporting advisors. Once you’ve completed the program, you’ll have a vetted export plan that will put you on the path to international success. On average, TAP participants reported an 18% rise in their international sales within one year of completing the program.
By providing risk-management, financing and working capital solutions, EDC helps Canadian companies expand into international markets, without taking on unnecessary risk. Their Connections Program can help you do business with leading international buyers. Contact the Export Help Hub with your trade questions. The Economic and Political Intelligence Centre provides free trade and economic insights for global markets, including:
- Global Export Forecast: A biannual forecast that identifies the major forces affecting the world economy and their implications for Canadian exporters.
- Country Risk Quarterly: This interactive guide offers timely economic and political information on 50 leading international markets.
- Global Economic Outlook: Provides insight on the global political, environmental and economic shifts that provide exporters with new risks and opportunities.
EDC webinar series: Our popular webinars are packed with information you need to succeed globally. Check out past webinars or sign up for upcoming broadcasts of interest to you.