Even though there’s a downturn in Canada’s oil and gas markets, the sector remains strong in other countries. So while some Canadian oil and gas companies struggle, others — the ones with international sales — are keeping their balance sheets in order. They’re still experiencing volatility due to lower oil prices, but they are stronger than most companies focussed exclusively on the domestic market.
That was one message from a hands-on EDC-sponsored webinar titled “Exporters do better: How to get started.” It featured exporting gurus from Canadian Manufacturers and Exporters, Export Development Canada and the Business Development Bank of Canada and David’s Condiments, who offered important advice on how to export.
Karen Shaw, EDC’s district manager for the Prairies, shared the story of one client from the oil and gas sector.
“One of our client’s sales were 80 per cent domestic a year ago,” Shaw said. “Given that their client base consisted of oil and gas exploration companies, their sales pipeline had evaporated. But with good risk management and having already had their fingers in export markets, they’ve been able to weather the storm, while their competitors are closing up shop during this downturn. They’ve weathered it so well their revenues have completely flipped. They’re now [80 per cent foreign] and 20 per cent domestic.”
A success story, without question, and one that illustrates some truisms that research on exporting bears out: Companies that export are more profitable, more productive, more innovative and more resilient to risk. Compared to non-exporters, exporters employ twice as many people, spend six times more on research and development and boast revenues of more than twice their domestic equivalents.
Shaw’s only advice to her client was not to get distracted when the Canadian market inevitably bounces back. “Even when things bounce back in Canada, it’s important to keep your contacts and your company in other markets.”
David Marcus, whose condiments are on 1,000 Canadian retailers’ shelves, talked about his foray into the U.S. His No. 1 piece of advice was to treat the U.S. not as a lottery ticket, but rather as a big country with regional differences. He advised entering one market at a time. He also stressed the importance of finding a good export broker.
Emiliano Introcaso, national program manager at CME, had advice for companies thinking of going global.
“The human resource aspect of this venture is time-consuming and it’s an important step,” he said. “A few weeks ago, I discovered one of our member companies had no staff capable of handling documents for trade export. That can be very costly.”
He suggests would-be exporters ask themselves if they should hire a full-time employee for that job. Should they invest in training or outsource the export portion of their business and if so, how will they finance that?
He also suggested having good marketing in place. Something as simple as an easy-to-understand website should not be overlooked.
Finally, Introcaso suggested the exporter make a list of 20 markets, then pick the top six. They should then make a list of the strengths, weaknesses, opportunities and threats in those markets, and analyze the political, economic, social and technological environment of each. With the pros and cons worked out, they should pick the top two and then develop an export plan for those markets.
You can listen to this webinar and find others at EDC’s website.