3 essential steps for entering International markets
It takes research and a great plan to make sure your exporting and international expansion efforts pay off. Becoming an exporter can put you on a fast track to growth, but it can be a big challenge to get started and achieve success. You have to think about a host of complicated questions—everything from picking the right target market to logistics, product adaptation, pricing, customs, marketing and your company’s export readiness. The long list of challenges may seem intimidating, but you can tackle them by taking steps to prepare your business and adopt a strategic approach.
“Exporting offers great opportunities for Canadian businesses, but you need a good export plan,” says Bill Macheras, Manager of the Info-Centre at Global Affairs Canada and a long-time Trade Commissioner with the Canadian Trade Commissioner Service. “Many business owners have no strategy and chase every lead. With a strategic approach, you can be proactive and improve your results,” he says.
The steps below are essential steps to consider before entering a foreign market. Keep in mind; you don’t have to do this on your own. Our Trade Experts from the Global Growth Trade Service are available to work with you from the start of your journey to develop a market entry approach that is customized to your business needs
- Review your company
Take a careful look at your business to make sure you’re ready to expand internationally. Be sure to review these elements:
Capacity to expand
Do you have the capacity and resources to start exporting? It is essential that you have the financial power to make a long-term commitment to this venture. You should also think about your ability to expand your workforce, production and support functions to accommodate expected sales growth.
Are the owners and senior managers on board? Are you ready to get the outside expertise you’re missing? Our Trade experts recommend having a dedicated senior executive to manage the international operations. “Without a dedicated executive to handle exports, the CEO may get stretched and neglect other tasks,” Macheras says.
Do you have adequate marketing, sales and other human resources? Think about any training and other gaps you will need to address, such as operating new equipment or systems or communicating in the target market’s language.
Product or services
How will you (or your product) stand out against the competition in a foreign market? Are you ready and able to adapt your offering to the needs and tastes of international customers? Just because something sells well in Canada doesn’t mean it will do so elsewhere.
“It’s important to research beforehand what kind of retooling and hiring you may need to start exporting,” Macheras says. “You can then put the resources in place before you get orders. Many businesses make the mistake of wanting to see orders before making any investment, but this can lead to delays in fulfillment and shipping and hurt your reputation.
One example that comes immediately to mind is an Ontario-based manufacturer that had to retool its entire production line to produce in metric to meet European Union requirements. The company’s manufacturing line had been entirely in imperial, which it had been using for years to serve its U.S. customers.”
Macheras says it’s “quite common” for Canadian businesses used to operating at a Canadian scale to become overwhelmed when they get their first large international order.
- Develop a market entry strategy
The next step is to develop a market entry strategy. This typically involves these elements:
Set clear goals. Decide on:
- Your business goals and targeted level of sales
- The specific product or service to export
- The target markets
- Major action items, a timeline and your budget
Do preliminary research on your market. This should include:
- Size of the market
- Your unique value proposition
- Regulatory, certification, trade and other barriers and opportunities
Choose your mode of entry. Options include:
- Using a distributor or agent
- Acquiring or partnering with a local business
- Opening a physical presence
- Selling through online marketplaces
- Offering direct e-commerce sales
- Selling indirectly through another company that exports to the target market
- A blend of several channels
Consider financing and insurance.
- Think about what financing you may need for your investments in the venture to ensure you don’t eat into working capital. Our Trade experts can provide relevant information on government grants and funding, let know you know which you can be eligible for and how to access it.
- You should also consider insurance for such things as shipping losses, non-paying foreign customers and contract cancellations.
“If you strategically narrow down your market and spend resources there, that’s when you can get significant export sales,” Macheras says. “A lot of entrepreneurs make the mistake of trying to service all over the world. They’re used to domestic business where you don’t turn down that purchase order and sell to 20 different markets, making $1,000 here, $1,000 there. They go very wide and very thin. Instead, you should go narrow and go deep.”
Our Trade experts can help you identify the potential market where your products can be valued and competitive. Once you have settled on strategic locations, we will leverage our network and help you identify contacts within those markets so you can learn more before making a final decision. It is always advisable to consider countries that have signed free trade agreements with Canada. These countries tend to offer a safer investment climate, reduced tariffs and easier movement of goods and people.
- Prepare and execute an export marketing plan
Finally, create and implement an export marketing plan (sometimes known as an export plan). This is where you work out the specifics of your venture. Your export plan would typically cover:
More detailed research on your target market, including:
- Target customer characteristics
- Local consumer needs and trends
- Specific regions or segments to target
- Cultural considerations
- Potential partners and buyers
- Details on regulations and certifications you need to meet
Needed adaptations to reflect local needs and customs. You may have to adapt:
- Product features
- Business practices
Logistics needs, including:
- Transportation of products
- Storage en-route
- Customs clearance
A promotion plan. This should include:
- Website and social media marketing
- Media kits
- Business cards
Monitoring your efforts. It’s crucial to pick a few key metrics and regularly monitor them to stay on target and optimize.
A critical element for exporting success, Macheras says, is having local expertise and partners to help untangle the complexities of international business.
Our Trade experts from Global Growth Trade Service can provide personalized service to guide you through your export journey: from working on market research to developing an export plan & go to market plans. We will also assist you in working through logistics hassles (connecting you with expertise like a freight forwarder, customs broker and carrier). We will work with you to develop a unique and customized strategy aligned with your business objectives. Export research and planning can be overwhelming, especially if you do not know where to look. We act as an extra resource for you and your team, guiding you through this process.
This content was culled from an original post on bdc.ca