BDC Hosts First Export Information Session

Hey all,

This new website is great! I finally have a way to communicate changes, new products and new opportunties for Victoria businesses (specifically you tech guys) in one place.

The largest group of exporters in Victoria are definatley our technology firms. I recently organized an exporting information event which brought together the planning and strategy support of BDC, with the on the ground and information resources of The Canadian Trade Commissioner Service (DFAIT) and the risk mitigation/working capital products of Export Development Canada.

If you missed it, feel free to contact me for the power point slides. They were:
-BDC's presentation on Global Readiness Assessments, Strategy, Structure and Planning
-EDC's presentation on Account Receivable Insurance, Bid Bonds, and Export Guarantees (among other things)
-Trade Commissioners presentation on their "friend on the ground" service, market reports, funding available through partners, qualified contacts, joint venture partner finding, distributer qualification and more.

I will paste a copy of my "Export Checklist" here for some food for thought.

Victoria Businesses can and will “Go Global”

Krista Chase is an Account Manager with the Business Development Bank of Canada.
She recently completed her Masters of International Trade and has been working in Victoria since 2007. She has worked abroad in China, Thailand and Tanzania.
****************************************************************
Exporting or « Going Global » can come with some hefty feelings of apprehension when you are a small business located in Victoria. However, there are many companies who have done well in their existing market that could tap into another market and pump up their success. In my daily work, I have come across companies that would do well in Morocco, Brazil or Thailand, but their number one concern is that there are too many unknowns. It is too risky.

Just as with anything, you can mitigate risk. The simplest way to mitigate risk is to plan well. The attached list is just an introduction of things you should think about when expanding your market outside of Canada. There are also many government services that offer planning, information, and risk mitigation services.

You’re probably wondering where to best export your products and services, or how to improve productivity in order to meet increased foreign demand. When evaluating an export project be sure to:

Research the market
There's an abundance of online information available. Start by visiting websites that provide market information such as Exportsource, CanadExport, Foreign Affairs and International Trade Canada, Export Development Canada and Business Development Bank of Canada.

Secure senior management buy-in
Penetrating foreign markets is a long-term commitment that demands a lot of time, effort and money. Be sure that your management team is committed to your efforts and understands the impact that the venture may have on operations. Exporting shouldn't be considered a short-term fix for sluggish domestic sales.

Benefit from other peoples' experience
Be sure to talk to businesses that have succeeded in your target market. You can contact your local economic development agency to find these companies. You might also consider forming alliances with companies in your sector in order to reduce market penetration costs.

Make personal visits
Although you can get useful information online, nothing takes the place of visiting the target market yourself. It's your opportunity to talk to potential buyers and to find out everything you need to know about the competition, local rules and distribution channels.

Prepare an export plan
Be sure you have an export plan, which is similar to a business plan but focuses on your company's strengths, weaknesses, opportunities and threats in a foreign market. It should help you define your objectives clearly, so that you can use the right tactics to reach your goals.

Choose a market entry strategy
Determine how you will enter the foreign market. Some of the most common entry strategies involve using distributors or sales representatives, or selling directly to end users.

Focus on one market at a time
Don't spread yourself too thin. Successful companies almost always concentrate on one area at a time. Once you've succeeded in your first target, you can attempt to enter other markets.

Adapt your marketing strategy
You may have to adapt your product price and promotional campaigns to reflect condition in the foreign market, including cultural influences (such as religion and traditions), language laws, buyer preferences, engineering standards or foreign government product regulations. Your pricing strategy needs to take into account market demand, competition and costs such as tariffs, custom fees, currency fluctuations, value-added taxes (VAT), shipping and insurance.

Do your financial planning
Short term and long-term financial planning is crucial to success in any export venture. Rather than dipping into current operating funds, you may need to consider obtaining export working capital, political risk insurance, payment guarantees, security for foreign distributors and clients, and long-term financing to purchase fixed assets.

Decide how you'll get paid
Keep in mind that you'll be dealing with clients and intermediaries you hardly know, in an economic context that is foreign to you. Take extra precautions and expect complications with payment. Many payment options are available, including cash in advance, letters of credit, collections and open accounts.

Learn about laws and regulations
Laws and regulations in international trade can be complex and they may have an impact on various aspects of your export operations. Make sure that any contract you sign stipulates that it is governed by Canadian legislation. You'll also need to investigate how your target market deals with intellectual property, health and environment standards, taxations, customs and duties, language, consumer protection and payment conditions.

Pay attention to health and environment issues
More and more countries are adopting strict regulations and standards to protect consumer health and the environment. They apply particularly to food products, prescription drugs, chemicals and common consumer products.

Understand tariffs, customs and free trade zones
When exporting goods into a foreign market you need to clearly understand the various political agreements and arrangements in play. There are 4 main aspects:
• customs requirements
• bilateral customs and trade agreements either between another country and Canada
• multilateral agreements among trading blocs (examples of blocs include North American Free Trade Agreement signatories, the European Union and South America's MERCOSUR); and
• free trade zones.

To take advantage of these agreements and arrangements, your company needs to know the conditions they stipulate. Foreign Affairs and International Trade Canada lists the many trade agreements Canada has signed. Tariffs vary greatly depending on your foreign market. Different countries impose different customs and tariffs to protect certain domestic goods from foreign competition.

Know your logistics
Make sure you know exactly how you will ship your product, and how you will handle labelling requirements and insurance needs. It's advisable to use a customs broker; trying to understand INCO shipping terms and documentation requirements such as export permits could overwhelm a business. For a fee, custom brokers can help you prepare the necessary paperwork. They can also act as logistics specialists who can help you accelerate the process and handle cross-border shipments.