There are many benefits to your business from expanding to overseas markets, including reducing your dependency on domestic sales.
There are, however, legal and financial risks. Below, we explore some of the points you’ll need to consider when you take your first exporting steps.
1. Cultural learning curve
The success that your business achieved in Canada may not necessarily apply to a foreign market. You’re potentially dealing with a very different culture with different rules.
It will take time, effort, and money to realize returns in a foreign market because of the learning curve your small business may need to travel.
Do your research
Serving foreign markets can be a positive strategy for business growth. Like any strategy, you owe it to your business to do your due diligence to decide if it’s the right path for your business to pursue.
Make use of the services and expertise of Export Development Canada.
2. Weigh up the risks
It’s important to weigh up the damage that could be done to your business if you haven’t researched your target markets thoroughly enough. By not completing due diligence on overseas markets, you could:
- Assume the brand communicates the same meaning as in Canada
- Use ineffective communications channels leading to a lack of sales
- Underestimate the time and money required to get a foothold (if the foreign market can become aware of your brand, try it and adopt it)
Does your business have the right processes, organization, and culture to develop an export market?
Have a look at the range of exporting services on our website that can help add value to your business in foreign markets.
3. Focus on one overseas market first
You’ll increase your chances of success if you focus on one market to begin with, and then branch out. The pressures of entering export markets can include:
- Cost: having to finance your integration into export markets with debt while your business begins to generate profits overseas
- Time: the demands on your time will intensify as it’s unlikely everything will run smoothly from day one
- Workload: by expanding your business into foreign markets you’re increasing your total workload
By focusing on only one market, you’ll be able to keep your local market strong. This will allow you to support and possibly even pay for your export drive.
Stay strong locally
Consider the risk to your current focus, which probably involves serving customers closer to home, the very customers who have made your company a success. Will this expansion prove to be a distraction? Do you have the resources to pull it off? Is your team ready for the challenge? Do you have enough money?
You need to make sure you can still serve your current customer base while you’re taking your first steps into exporting.
4. Protect your intellectual property
It may be a costly mistake to assume your trademark, patent, or industrial design protection in Canada also protects you in foreign markets. Intellectual property (IP) rights are often territorial rights and don’t necessarily carry from country to country.
Copyrights do get some broader protection in a larger number of countries. The unique IP you bring to a particular foreign market may be open game there, which could put you right out of business when someone copies it.
For example, you may save yourself considerable grief by checking to ensure no other company operating in your targeted foreign market is using a trademark similar to yours.
Always consult a qualified IP expert, such as an intellectual property lawyer, to access information and obtain advice regarding protection of your IP in other countries.
You can learn more about IP issues by visiting the World Intellectual Property Organization website.
Before you take action on any of the information above, we recommend consulting with a qualified business advisor that understands your unique needs and situation for your specific business and/or personal plans.