By Phil Griffiths, CIBC Global Transaction Banking
Canada is an export nation and globalization is a common word in the business community with foreign trade responsible for about 45% of Canada’s GDP. In fact, we all compete globally, knowingly or not, simply because the labour and supply markets no longer have international borders.
Becoming actively involved in international trade can help a business in many ways such as finding less expensive suppliers, increasing sales, stabilizing seasonal or cyclical market fluctuations, and/or reducing dependencies on existing markets and suppliers. However, the benefits are usually accompanied by additional costs for travel, developing new promotional materials, or adapting a product to meet the needs of a new market and shipping.
There are many things that you can do when you’re ready to start expanding globally or when you already export and are looking for support:
Familiarize yourself with the local market through personal or business visits. Be prepared to hire agents, set up join ventures with local partners or establish your own office on the ground.
Research your markets and know your plans before visiting.
Invite your foreign customers to visit Canada and view your operations here. It will go a long way toward building a strong relationship.
Communicate with International Trade Canada, Industry Canada and Export Development Canada, as well as your professional advisors: your law firm, your accounting firm and your bank.
Hire staff with local language skills. Don’t depend on translators from your customers.
Get to know the region’s many markets as they may offer varying opportunities and risks.
Be flexible – Canadian business practices or made-for-Canada products, systems or services may need to be adapted to succeed in other markets.
Adopt a long-term view – business results may take time to materialize.
To help you expand, there are also a number of export and trade resources available, including:
Export Development Canada (EDC) – Canada’s official Export Credit Agency providing trade finance and risk management services to Canadian exporters and their financial institution to support incremental export growth in markets worldwide.
Business Development Bank of Canada (BDC) – Specializing in small and medium-sized enterprises, BDC offers financing, consulting services, subordinate financing and venture capital.
Canadian Manufacturers and Exporters (CME) – With a mandate to promote the competitiveness of Canadian manufacturers and the success of Canada’s goods and services exporters in markets around the world, CME is Canada’s largest industry and trade association.
Chambers of commerce, consulates, embassies, foreign trade ministries and the World Trade Centers Association, as well as foreign and domestic industry associations are excellent sources of information for export mailing lists, trade lists, import-export statistics, and funding or insurance programs.
While the prospect of expanding to global markets can be intimidating, there are many resources available to help companies expand with confidence.
Phil Griffiths, Senior Vice-President, CIBC Global Transaction Banking
CIBC Global Transaction Banking, including both Trade Finance and Correspondent Banking services, works with companies to facilitate and grow their trade activities globally. For more information, visit our website. This article is for general information only and is not intended to provide legal, tax or investment advice; individuals should consult their own advisors concerning their particular situation. Information has been obtained from sources believed to be reliable, but the author makes no representation of accuracy or completeness.