“Scope creep is the enemy of all business transactions”: Export insights from LJ Welding’s Ryan Holt

“Scope creep is the enemy of all business transactions”: Export insights from LJ Welding’s Ryan Holt

Ryan Holt is Chief Operating Officer and a partner at LJ Welding Automation, an Edmonton-based company that supplies automated welding systems to clients around the globe.

Learn more about the firm’s export journey here.

What was your first export sale and to where?

It was to the U.S. – a metal fabrication company involved in wind tower manufacturing that purchased a vessel rotation system.

How did it come about?

It was word-of-mouth, but most of our business (growth) has been a result of target marketing as well as distributor driven.

When and why did you first start thinking about exporting?

When we first took over LJ in 2006, we immediately began setting our sights on export sales. Why would we not try and export as soon as we could? Canada is just a tiny fraction of the world market, and it was important to set our sights on exporting right away.

Describe how your export journey helped the firm get to where it is today?

Exports have increased every year. The first and second years’ exports were a negligible percentage of overall sales, but by our third and fourth year, exports made up about a quarter of the business. Over the next several years, exports grew to nearly 50 per cent of our business volume, and currently they are well over half of our business.

What is the biggest difference between selling in Canada and selling in another country? How did you adapt to that difference?

You have no choice but to adapt and provide what’s needed in each market if you want the business. In the Middle East (for example,) negotiating is a necessary part of doing business. Face-to-face meetings are often a mandatory part of business in some countries, whereas in North America this isn’t always the case.

When it comes to exports, what do you know now that you wish you knew when you started?

Cultural differences can be draining. For example, with global time zones we get a lot of calls at all hours of the day. And negotiations can be very lengthy and challenging. Canadians and Americans are pretty quick to buy once they feel comfortable, but negotiating with customers in some markets can result in 40 or more discussions prior to moving forward with an order. Documentation and paperwork can also be cumbersome in a lot of markets.

How has exporting changed the way you market and sell your products in Canada?

Having an international reputation and being able to say that you export to more than 40 countries gives potential customers the view that you have the skills and experience to provide what they need and that they are in good hands with a company that also has a high level of integrity.

Although we focus on exporting, having established ourselves in many markets means that we are that much more competitive on our home turf here in Canada, whether our currency is close in value to the U.S. dollar or not.

How has the trading world changed since you started in business?

Everything is faster and access to information is much quicker. That’s great in many ways, but it also means that if you don’t take care of a customer quickly, someone else will. Another change is that export countries with lower costs are coming onboard and that’s making competition stronger. Social media is also really important now. We use targeted advertising through social media, and use social media to increase our presence. The more people are talking about you, the more business you can generate.

When it comes to exports, what do you know now that you wish you knew then?

We’ve learned the hard way that ‘scope creep’ is the enemy of all business transactions. Make the scope of a project clear, easy to understand and demand customer sign-off prior to moving into the manufacturing stage.

What is the #1 characteristic that you believe every exporter should possess?

An ability to roll with the punches and a good sense of humour never hurts.

What is the #1 thing new SMEs need to know about export and trade?

Make sure you have a strong infrastructure. An unprepared company can drown in export documentation, engineering, accounting and legal details.

What are some of the industries your products are used in?

Our products have been used to make high-end airplane fuselages, in copper mines, to make equipment for a tortilla factory in Los Angeles, in offshore oil drilling and everything in between. We built equipment to help deal with the oil spill off the Louisiana coast, the Fukushima nuclear disaster in Japan, to make a Space X rocket launcher and have supplied various machinery to NASA. One of our robotic welding systems currently being designed is for an MRI scanner application. It’s very exciting and the list continues to grow.

Categories Exporting

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