When visitors to the ultra-luxurious Yas Island in Abu Dhabi look at a piece of art displayed in their hotel, they’re seeing work chosen by Farmboy Fine Arts of Vancouver.
In 2008, the United Arab Emirates island was being developed as a tourist destination and setting for the Formula 1 Abu Dhabi Grand Prix. Todd Towers, president and CEO of Farmboy Fine Arts, was among several art consultants bidding on a contract to provide art for the seven high-end hotels under construction.
Farmboy Fine Arts got the job, and the hotels collectively got about 8,000 pieces of art, each acquired and curated to fit into a bespoke experience unique to each property.
“This meant working with different key stakeholders and decision makers all working to the same deadline. It was a major undertaking and an exciting challenge,” says Mr. Towers, who launched Farmboy Fine Arts in 2000 as a one-man operation. The company now has a team of 25 and an extensive client list of top international hotels.
Farmboy Fine Arts is among the small but important group of small- to medium-sized enterprises (SMEs) in Canada that do business overseas. According to Statistics Canada’s latest figures, only about 10 per cent of SMEs export their goods or services. But this small contingent makes up 90 per cent of all Canadian exporters and accounts for over 40 per cent of export dollars, adding up to $374-billion in 2011.
For entrepreneurs who aren’t tapping into the potential of the global market, Christian Dallaire at Export Development Canada (EDC) has this message: think about it.
“Most small businesses like to build a repertoire domestically before going international,” says Mr. Dallaire, regional vice president, small business solutions at EDC, which provides insurance, financial services, bonding products and small business solutions to Canadian exporters. “But the business landscape is changing, and businesses need to think about an international platform because it’s more competitive today and their competitors are no longer just within our borders.”
Mr. Dallaire says many resources are available to businesses exploring the idea of selling overseas. These include trade associations, international chambers of commerce, the Canadian Trade Commissioner Service, and due diligence and consulting service providers such as TRACE International.
Jonathan Bourgeois, account manager, small business at EDC, says there are a number of ways to sell internationally, including selling directly online, engaging an agent or representative or selling to distributors.
Whatever route the business chooses, it’s important to have someone – an agent, relative or the entrepreneur – present in that market, says Mr. Bourgeois.
“You’ll need to travel there on a regular basis, engage a representative or both,” he says. “You might get away with not visiting an overseas market with one order, but to grow your business internationally you need a presence in your target market.”
A big worry for entrepreneurs is how to finance their export operations. In addition to their banks, entrepreneurs can look to organizations such as EDC, Business Development Bank of Canada and Canadian Commercial Corporation that offer support or guarantees for trade financing products and services such as export documentary credit or standby letters of credit.
Mr. Bourgeois says exporters should protect themselves by insuring their receivables. The insurance can be used by their bank to convert the value of those receivables into immediate working capital for the business.
There are challenges to doing business abroad, but the advantages can far outweigh the risks and costs. By exporting their products and services, entrepreneurs can diversify their customer base, mitigate market fluctuations and significantly boost revenue.
Mr. Towers can attest to these benefits. Today, Farmboy Fine Arts boasts a project portfolio of 17,000 properties and continues to grow. Mr. Towers estimates that 80 per cent of the company’s revenue comes from outside Canada, from locations as diverse as New York, Seoul, Baku in Azerbaijan and Beijing.
“Sure, it can be scary to do business overseas, but if you’re entrepreneurial, you’ll assess your risks, develop a strategy and set up your cash reserves,” he says. “Then you’ll go after the opportunity.”
|TIPS FROM CIBC|
|Expanding your business internationally|
1. Define your motives and long-term goals
Globalization offers endless growth opportunities for businesses, but there can be significant risks involved in setting up international operations. Ask the right questions, assess your goals and explore all facets to ensure you are making a sound business decision before investing the time and resources into expanding internationally.
2. Research your core competencies and foreign markets
Perform internal analysis to identify your business’s strengths and core competencies. Research and narrow down markets that have the most potential for your products/services by looking at barriers to entry, industry structures, supply chains, competition and demand factors.
3. Create a detailed plan
Increase your knowledge about what’s involved in doing business in your selected region. Each country may have different requirements and specific needs. A thorough understanding of foreign regulations, laws, standards and cultural preferences will prevent exposing your business to unnecessary risk. Create a detailed plan that identifies the route you will follow to deliver your product to your customers. Proper planning that includes setting realistic budgets with built-in contingencies can help you manage your growth while facilitating successful international expansion.
For more information, visit cibc.com/businessadvice.
This content was produced by The Globe and Mail's advertising department, in consultation with CIBC. The Globe's editorial department was not involved in its creation