You may have heard some hard-hitting statistics recently, highlighting how businesses that expand their sales to foreign markets are significantly more successful. It’s true. On average, compared to companies that don’t trade globally, exporting companies grow faster, generating 121 per cent more revenue, are 25 per cent more innovative and, for manufacturers, up to 30 per cent more productive. (Sources: Statistics Canada, Deloitte and the Conference Board of Canada) And yet, according to a study by Industry Canada, only 10 percent of small and medium-sized Canadian businesses (SMEs) export.
Why is that?
While the reasons vary, one thing many companies have told us at EDC is that they need more international trade training and skills development to be confident in their international trade decisions. At the same time, Canadian businesses that are flourishing beyond our borders have said that knowledge was the most valuable tool they had for achieving that success.
Before you make a leap, you need to learn how to land
This makes sense. The hundreds of company owners and entrepreneurs I’ve met are experts at their business, whether it’s manufacturing industrial-sized pipes, harvesting lobsters or providing innovative technology services. Most have had little time or opportunity, however, to gain a deep and broad knowledge of exporting, and this can make them wary about breaking into new markets. It’s like taking a leap off a diving board and then realizing you don’t know how to swim!
But what kind of training and skills development are most relevant to exporters? Business professionals who have succeeded in the global marketplace have told me that understanding the following six broad topics is key to improving expertise and growing international companies to their greatest potential. Below, I’ll also explain how you can develop this expertise through EDC-FITT International Trade Training.
6 skills that will help you grow your international business
1. Determining whether your company is ready for international trade.
Before you start selling beyond our Canadian borders, you need to know whether your company is ready, and what steps to take to get started. This includes knowing:
You also need to understand how to market your products or services internationally. Since every market will have different expectations and preferences, you need to know the techniques to build a strong brand and stand out from your competition.
- what the opportunities and risks are in various markets
- your company’s capacity and readiness for trade
- how to find new customers and markets
- the logistics of trade
- how to negotiate and prepare contracts
- legal and tax requirements
- how to mitigate risks
- resources and contacts that can help you
2. Developing strategies for market entry
There are many ways to enter a market, and each strategy’s pros and cons must be fully considered, be it direct sales, working with an agent or distributor, a joint venture with another company, e-commerce, or direct investment. In addition, the different languages, cultures, ways of doing business, consumer preferences, and regulations will play a role in choosing the optimal market entry strategy.
3. Mastering e-commerce
Canadian companies can’t afford to ignore e-commerce. According to eMarketer, worldwide e-commerce sales for retail reached almost $2 trillion in 2016, and double-digit growth is expected each year until 2020. In addition to understanding the logistics involved, Canadian companies need to know how their websites and online presence – like their products and services – should be customized for local markets, including currency, language, customs, reading preferences, colours, and more.
4. Understanding global value chains
Today’s international businesses don’t just sell to the world. They also set up international supply chains, strategically choosing where to locate their supplies, plants, and branch offices to optimize production, quality and speed.
5. Managing financing
How to get more financing and keep cash flows running smoothly is one of the most frequent questions I get from exporters. What are the different types of financing? How can you convince your bank to extend more credit without putting up collateral? How do you ensure you get paid? This knowledge not only helps you to make better decisions for your bottom line, but helps you enter new markets and take on contracts with confidence.
6. Knowing how to manage risk
Doing business in other countries, even the United States, always poses more risk. But understanding what the different risks are and how you can mitigate them can allow you to reap the benefits while playing it safe in the international market. There are even ways to mitigate risk so you can get more financing.
New EDC-FITT International Trade Training makes learning accessible
To help fill exporters’ need for accessible, insightful international business knowledge, EDC and FITT (the Forum for International Trade Training) recently teamed up to deliver EDC-FITT international trade training. The training includes flexible online courses and workshops on a variety of subjects related to international business, offering practical knowledge that meets the specific needs of exporters.
In addition to training professionals on the 6 skills highlighted above, completing the courses can help you earn valuable trade credentials and certifications to accelerate your career. By making international business knowledge accessible to a wider audience of Canadians, EDC-FITT international trade training will help the next generation of professionals develop, leading Canadian businesses to ever-greater global success!