Ready, set, export

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Entrepreneurs and innovators export their goods and services for various reasons. Exporting allows access to more consumers and businesses, thus increasing opportunities for greater profits. Diversifying into other markets provides some security against local economic downturns or saturated markets.

Mark Livingston, regional vice president of business development for Western Canada at Export Development Canada (EDC), points out, “Canada has 15 different trade agreements with 51 different countries that represent 1.5 billion consumers globally. The rest of the world wants Canadian products and services, and the opportunity [with exporting] is significant.” In 2021, Canada’s total exports were valued at $631 billion, with Saskatchewan’s valued at $37 billion.

“Canada is a trade nation,” says Livingston. “Companies become more profitable when they have differentiated products or services, establish value creation, and understand who their customers are. It’s not just maximizing that domestically, but thinking, ‘Where else can we grow?'”

How do I know if I’m ready to export?

A strategic exporting plan points you in the direction of success. Not only does it help keep you focused, but a solid foundation will help you manage the exporting side of the business for the long term. Invest the time in shaping your specific goals with your expansion, and keep your action items, budget and timeline front and center throughout your planning.

Consider a few key elements of your company. First, do you have the financial capacity to ensure long-term international expansion support? Are your employees capable of increased production? What skills or additional training is required to set your team up for success? How will you accommodate expected sales growth? Your product or service must stand out against the competition in foreign markets. Do your research, so you have the tools you need and are well prepared when the orders start coming in. Do you have experts who can spear handle the international side of the business?

How do I enter a foreign market?

Natasha Vandenhurk is the CEO and one of the founders of Three Farmers, a brand and manufacturer of whole-roasted bean snacks based here in Saskatchewan. Established in 2011, Three Farmers distributes its products coast-to-coast in Canada and internationally to Singapore, Taiwan and Japan. The company’s current expansion focuses on the United States, where they are targeting the natural consumer. Vandenhurk emphasizes, “It’s important to do research and go in with your eyes open. Have conversations with people who are knowledgeable. Many entrepreneurs want to forge ahead without talking to people who have experience, but it’s important to plan.”

There are numerous research resources entrepreneurs can consult when creating an export plan. Livingston highlights EDC: “International trade can be intimidating and complex, and we work with companies to understand and mitigate those complexities.”

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Other organizations EDC works closely with to support innovators include the Canadian Trade Commissioner Service (TCS), Business Development Bank of Canada (BDC), PrairiesCan, the Government of Saskatchewan, and Saskatchewan Trade and Export Partnership (STEP).

What sort of research contributes to a successful export plan? Understanding your market is critical. What is the size of the potential market? Who are your consumers? Who are your competitors? What is your unique value proposition? Online trade data tools, such as Trade Data Online, can be accessed to find high-potential target markets where Canadian products are valued and competitive. As Livingston noted earlier, there are 51 countries that have trade agreements with Canada, which can provide a stable investment climate, manageable tariffs and easier movement of your goods or services.

Bruce Harrison, partner with McKercher LLP Barristers and Solicitors, stresses the importance of exporters understanding the legal regime for their product in the foreign country or region they want to expand. “The obvious issue would be tariffs, duties or quota limits on the product. But other requirements may be relevant, such as packaging, inspection or certification in that country. If the product requires inspection or certification for import clearance, the exporter should contact a broker in the destination country for assistance.”

Another significant component of your research is financing and insurance considerations. “Typical issues around payment, delivery and quality are elevated when dealing with purchasers in a different country,” Harrison explains. “Parties need to account for fluctuations in exchange rates, particularly for longer-term contracts. Exporters should also seek payment upfront or at the time of delivery, since they may not have lien rights and dispute resolution overseas is often costly.”

How do I market my product or service to a new market?

All innovators and entrepreneurs understand the value of a solid, well-thought-out marketing plan. It typically covers more detailed research on your target market (such as specific characteristics, needs and trends), cultural considerations, and potential partners and buyers.

Get to know your target market by visiting and meeting locals who are either potential consumers or on-the-ground partners. This is essential to determining whether or not you require adaptations to your product or services to reflect local needs and customs—such as branding, packaging and labelling, or pricing—as well as determining the logistics of your exporting plan. How will your goods arrive at your market? What documentation is required? What about customs?

Harrison points out, “Shipping presents its own set of issues. Parties should be clear on responsibilities for pickup, trucking, ship loading, import duties, unloading and delivery to the purchaser. The International Chamber of Commerce provides a set of pre-defined shipping arrangements called ‘Incoterms’ that outline the point in the shipping process where responsibilities transfer between seller and purchaser. There are about a dozen different Incoterm arrangements, ranging from pickup at the seller’s facility to delivery and unloading at the purchaser’s facility and all points in between.”

Your promotional plan should cover website and social media marketing, paid advertising and media kit, brochures, business cards and even testimonials to connect existing consumers to your targeted audience. Use performance metrics to track your success quickly and adjust strategy if needed.

Perhaps the most significant factor in your success as an exporter comes from the team you surround yourself with. Vandenhurk says that much of Three Farmers’ success is attributed to relationships. “We’ve surrounded ourselves with people who have been there, done that: an entrepreneur who has entered the US and can tell you what worked and what went wrong; solid finance partners because it’s not profitable right out of the gate; and operational support, because the capacity required for a market like the US that’s ten times that of Canada is important to have.”

Livingston echoes this emphasis on relationships. “International trade is a team sport; you are not expected to do it alone. Engage early and engage often. Don’t underestimate the number of organizations here to help.”

A small but scrappy province goes global