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Exports and Company Growth
Turning a small company into a bigger one can be the hardest task any entrepreneur
can face. It demands a solid business strategy, topnotch people, skilful use of company
resources and an ability to identify promising opportunities. Those opportunities, though,
aren’t necessarily here at home. Once you start to look, you may find that one of the best
ways to grow is through international trade – in a word, exporting.
The biggest benefit of exporting is that it can expand businesses that follow this path are actually selling abroad
and diversify both your markets and your customer in significant volumes, although not directly. Instead,
base. This not only increases your sales but also reduces they’ve linked into the supply chains of big multinationals
your vulnerability to a slowdown in a particular market, that package the smaller companies’ products into larger
including Canada’s. Equally important, though, is that solutions, which the multinationals then sell around the
exporting can help you build your capacity for developing world. Such indirect access to overseas markets can gain
new products, technologies and services. This will widespread exposure for smaller businesses, which can
strengthen not only your global competitiveness but also help them build capacity until they can sell directly to
customers abroad and/or obtain footholds in yet more
your ability to compete in Canada.
Exporting, consequently, can be a fruitful strategy for supply chains.
In Myers’ opinion, developing these partnership and
companies across all of Canada’s industrial sectors. It can
be especially important for businesses whose products or supply chain links is vital. “There aren’t many Canadian
services are so specialized that they have a limited domestic companies today that can do business either domestically
or internationally unless they partner
market. Once a company saturates
with another company or become
that market, it may find that exporting “Strategic thinking should look for
part of a larger supply chain. Being
is the only feasible way to expand. “For
the
best
way
to
generate
business,
able to see your business opportunities
companies such as these,” says Jayson
whether through domestic sales or
in terms of international opportunities
Myers, President and CEO of the
sales abroad.”
Canadian Manufacturers & Exporters
– that’s becoming really important
(CME) association, “exporting needs
when you’re building a business
Jayson Myers
President and CEO
to be a part of their business strategy,
strategy for growth.”
Canadian Manufacturers & Exporters
since it’s where some of their biggest
But in Myers’ opinion, one of
opportunities may lie. More generally,
the most important elements of any
though, any company’s strategic thinking should be looking company’s growth strategy is to clearly understand the
for the best ways to generate business, no matter whether value it offers. “This understanding,” he says, “starts with
it’s through domestic sales or sales abroad.”
the recognition that you’re not selling a product or a
Sometimes, especially for smaller firms, the best export service to your customers, but providing them with value
strategy can be selling indirectly, through partnerships in the form of a solution. Out of that comes an approach in
with other companies. If you want to operate in the EU, for which you work to understand your customers’ problems,
instance, you’d look for European or Canadian firms that and then present your products or expertise as solutions
could help you distribute or manufacture your products to these difficulties.”
in Europe. A second strategy is to integrate your company
To do this successfully, you’ll need to establish strong
into international supply chains. Many smaller Canadian business and personal relationships with your customers.
A special information feature presented by EDC.
“International business relations are built on trust businesses based on the company’s cash position. This
and reliability,” Myers observes, “and that’s far more means you’re more likely to get financing if you have a
important for success than simply trying to figure out lot of cash on hand, which implies taking a lean approach
which customers you want to approach.” This means that to business and keeping a healthy cash reserve. It’s also
a company will usually set itself up for failure if it goes to ideal to have long-term, creditworthy customers, since it’s
an export market solely to increase sales and doesn’t align much easier to get a bank to finance an actual sale than a
potential one.
its behaviour with the expectations of local customers.
Keep in mind, however, that you don’t need to do
On the human resources side, entrepreneurial vision,
management expertise and skilled personnel are also everything by yourself. You can work with institutions such
essential for growth. But beyond those, there’s a skill as EDC, the Business Development Bank of Canada, the
set that deals with the technical aspects of exporting. Canadian Trade Commissioner Service, your own business
Can you get the financing you need, for example? Does partners at home and abroad, business associations such
your product meet the technical standards of your new as Canadian Manufacturers and Exporters, and your own
industry or sector associations.
foreign market? Do you know how
A company that wants to grow
to deal with its customs authorities? “Exporting can offer huge
through exporting must have both
Much of this skill set involves
rewards, so don’t let a fear of the
the commitment and capacity to
dealing with various kinds of
risks
and
costs
overwhelm
the
sustain that growth and to deal with
challenges. Finding capital for
opportunities.”
the risks it will inevitably face. “It’s
growth is a major one; while it can
always easy to point to the risks of
be hard for smaller companies to get
Jayson Myers
President and CEO
exporting,” says Myers, “and to the
financing for domestic expansion,
Canadian
Manufacturers
&
Exporters
effort you have to put into it and to
it’s even more difficult to obtain cash
the details you have to master. But
for growth abroad. This is where
EDC can play a vital role – it offers financing products, at the end of the day, it can also offer huge rewards,
including export guarantees and foreign buyer financing, so don’t let a fear of the risks and costs overwhelm the
as well as credit insurance, such as receivables insurance opportunities. Keep that in mind, and you can design an
and contract frustration insurance. These products can international growth strategy that could turn your small
help exporters not only find more working capital, but company into a big one.”
For more information on how to grow your internaalso provide extra value for prospective foreign customers.
Remember, though, that banks usually lend to small tional business, register for our free webinar.
Cowater: From dream to global success
TIPS
››Develop an international
growth strategy as part
of your overall business
strategy.
››Develop partnerships in
foreign markets and integrate
your company into global
supply chains.
››Focus on the value and the
The dream of Cowater began in 1984
on a canoe trip in Algonquin Park.
Today, the company has improved the
lives of millions in over 65 countries.
Its management consultants work
with governments around the world
on infrastructure and capacitybuilding projects. To grow its
business, the Ottawa company often
must finance performance bonds,
which can be difficult for a small firm.
But thanks to EDC support, the
company has been able to meet
the challenge and its revenues have
tripled during the past 10 years. “EDC
has helped us free up the cash we need
to grow,” says Cowater’s CEO, David
Baron. “We can provide bonding,
for example, without overextending
ourselves.” Moreover, Baron adds,
working with EDC has allowed
Cowater to use its freed-up resources
to acquire another Canadian firm.
As a result, Cowater is now Canada’s
largest consulting company.
solutions you offer your
customers and understand
what they expect from you.
››Be prepared to spend
significant time developing
business and personal
relationships within your
markets.
››Foster innovation both in
product development and
across your company.