Although research shows small businesses that export grow faster, have a fatter bottom line, last longer and are more resilient, only 3.6 per cent of Canadian companies do so. Here’s why you shouldn’t be afraid to carve out an international market for yourself.
Other countries sell to you. Why not sell to them? That’s the message Canadian businesses and entrepreneurs are getting from an Export Development Canada (EDC) campaign to encourage more small businesses to start exporting. A quick look around your home or place of business tells you it’s true. From appliances made in the U.S., France and Australia, to produce and spices from Mexico and Columbia, our surroundings are a cornucopia of international product offerings.
The reason so many companies around the world are exporting is simple. Research shows companies benefit significantly from international trade: exporters grow faster, are more productive and achieve better market performance than companies that confine themselves within their domestic markets.
According to Deloitte, while global exports grew at an average annual rate of 9.1 per cent between 2000 and 2012, Canada lagged behind with export growth averaging 4.2 per cent—less than half the global average. Only 3.6 per cent of Canadian companies export, and nearly three-quarters of Canada’s exports still head next door to the United States, which holds only 5 per cent of the world’s consumers and is growing much slower than emerging markets.
Getting fresh blood into your customer base
Chris Dallaire, Vice-president of Small Business Solutions at EDC, says some companies are still haunted by the 2008 recession and the recent strong Canadian dollar, while competition is the reason other Canadian companies fear foreign markets. But as EDC’s new campaign illustrates, foreign companies are increasingly competing with Canadians on their home turf.
“The Canadian market is small, and with more foreign competitors selling to Canada, it’s getting increasingly risky to base your sales only in the domestic market,” Dallaire says. “What many companies soon realize is that exporting to strategic markets can actually reduce a company’s risk. You can expand your customer base, increase sales and cash flow, weather market turbulence, take advantage of more efficient global supply chains and transportation routes, and become more competitive by gaining exposure to new technologies and best practices.”
Tricks and treats of exporting
Dallaire also points out that while exporting does come with risks, taking that first step is getting easier. A weaker Canadian dollar, as well as improvements in finance, eCommerce, and new free trade agreements between Canada and emerging markets are increasing access to new customers worldwide.
“There is also a wealth of resources and organizations that can help you determine your readiness, consider strategic ways to get started, and help you mitigate the risks,” says Dallaire. “If you want the exporting advantage, it’s a great time to come out from under the covers.”
- Foreign Affairs and International Trade Canada (DFAIT)
- Canadian Trade Commissioner Service (TCS)
- Step-by-Step Guide to Exporting 2011
- Export Development Canada
- About Exporting
- Canada Business
- Industry Canada
- Trade Data Online
- Deloitte: The future of productivity: Smart exporting for Canadian companies. Part of Deloitte’s Future of Canada series.