Q: When and why should a startup think about taking their business global?
A: Any company, big or small, should consider exporting as a way to expand their business and gain new customers. The question of timing depends largely on their product or service. Some startups could have a proven product or service that can be exported right from the get-go.
It’s important to do your research when considering potential markets and the risks and opportunities of entering them. That’s where EDC’s knowledge can come in handy.
A good place to start is by signing up for a MyEDC Account. It’s a one-stop shop for free market intelligence, international insights and guides. You should also check out EDC’s country and market information and review our other resources, including webinars, lists of trusted service providers and registries, and access to export advisors.
Q2: What should small-to-medium enterprises (SMEs) know about international markets, customs and culture before going global?
A: What works for one international market may backfire in another, so it’s very important for SMEs to conduct their research on potential risks before going global. In addition to the strengths and weaknesses of available market-entry options, SMEs should also look at available sales channels, ways to strengthen relationships with customers and how to mitigate the risks of currency and foreign exchange fluctuations.
A good resource for learning about these important areas of international trade is TradeReady.ca. You can also get answers to hundreds of questions about any market on your radar via our Export Help Hub.
Q3: What should you include in your export plan?
A: An export plan is similar to a business plan in that it allows your company to map out all the steps to getting export-ready for a particular market. It will also help you identify the right market-entry strategy, as well as calculate the costs associated with global expansion.
Your export plan should clearly define the markets you’ll target, your specific sales goals and the overall approach you’ll take to achieve those goals. It should include information about financing, marketing, logistics, competition, any product modifications that might be required, and your pricing strategy.
Putting your export plan in writing can help you communicate and organize export efforts within your company. It also provides you with a go-to document to articulate your international expansion plans to others, such as your banker or government grants officers.
You can read more about how to build an export plan on my two-part blog “How to build an export plan: Taking your business to the next level.”
Q4: How can SMEs effectively research a market that’s hundreds or thousands of kilometres away?
A: A good place to start is by looking at Trade Commissioner Service resources specific to the country you’re researching. It’s a great source of information on funding programs, trade events, procurement guides and other resources. You should also check out EDC’s country information pages for a better understanding of market activity in your region of interest.
Looking at a government’s trade and investment resources page is another great way to learn about the country. For instance, if you’re interested in exporting to Germany, you could check the website of the Germany Trade & Invest promotion agency.
For help putting together your export plan, you should also participate in the interactive workshops run by the Trade Accelerator Program (TAP).
Q5: What are the current opportunities in the global market for Canadian SMEs?
A: Trade diversification is a great way for Canadian SMEs to take advantage of opportunities in new markets. It’s a proven method of reducing risk, unlocking opportunities and driving business growth. And by ensuring that Canadian exporters are not missing out on opportunities in emerging, fast-growing economies, diversification can also be beneficial to the Canadian economy.
Another opportunity is through free trade agreements (FTAs), including the implementation of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Canada has 14 FTAs with 51 countries, which, according to Global Affairs Canada, help open markets to Canadian businesses by reducing trade barriers such as tariffs, quotas or non-tariff barriers.
Q6: Going global opens many doors for SMEs. What tools and resources can you use to stay informed and efficient?
A: An excellent tool you should use is the Canada Tariff Finder, which allows you to look up the tariff rate that applies to your product in countries where Canada has a free trade agreement. You don’t even need a harmonized system (HS) code to look it up.
You should also check out our newest trade tool, EDC InList, which can help you find a freight forwarder in your sector that has been vetted by CIFFA (Canadian International Freight Forwarders Association) to deal with your shipments. If you’re already working with a freight forwarder, ensure you’re included in their newsletters. These can keep you informed of any changes happening with cargo regulations.
Q7: What kind of elements should you consider when going global?
A: There are three vital elements to your global strategy:
- First, it’s essential that you have a business case that helps respond to the challenges and rewards of going global.
- Second, you should conduct a financial feasibility study to find out if going global makes financial sense for you.
- Third, consider engaging in a “local” partnership in the market with an agent or distributor from whom you can seek guidance.
Q8: Finding qualified employees locally can be hard enough—how do you do it globally?
A: Many companies expanding globally might not necessarily deal with actual employees, but instead have local agents and distributors in each market. Take a look at EDC’s guide to finding, training and managing international agents and distributors to ensure a successful agent/distributor relationship abroad.
Q9: What is a customs broker, what do they do, and do you need to use one?
A: Customs brokers are used by importers to prepare import entries that help clear goods through customs in Canada and overseas. Many clients at our export help desk want to confirm harmonized codes, so we recommend they contact the Canadian Society of Customs Brokers for a directory of all brokers in Canada.
Q10: Who do you need on your team to master the logistics of going global?
A: To master the logistics of going global, you need qualified professionals on your team who can handle the many different areas of your business. To research some of the consultants or companies that might be able to assist your business, check associations like FITT, as they have a list of Certified International Trade Professionals you can search by province.
Q11: Do you have any last thoughts or advice for startups seeking to go global?
A: I recommend asking lots of questions and learning from government resources. There’s a wealth of free information available online to the public, including webinars and workshops through EDC’s partnership with the Forum For International Trade Training.
Remember, we’re all part of this export ecosystem. We’re here to help you succeed, because if you succeed, we all do.