With a relatively small domestic market, many Canadian small businesses need to expand to other countries to grow, but language barriers, visas, taxes, and cultural differences can make it risky, time consuming and costly.
Business councils, chambers of commerce and trade organizations can help bridge the gap. Individuals with knowledge and contacts in specific countries are also emerging as major players.
Marco Abdi, founder and president of Abdi International Inc., which connects Canadians in the oil-and-gas technology industry with business leaders in the United Arab Emirates, says it is especially difficult to enter a foreign market that already has a tight-knit business community. “You do business in Calgary because everybody knows everybody. Same thing down there (in the UAE).”
He adds it would take a Canadian entrepreneur “maybe 20 or 30 years” to establish their own connections in the UAE. “To trust you, they have to have a relationship. To build a relationship is going to take that long. In that culture, they don't care about the money, they care about what kind of family you come from and if you’re reliable.
“You can have all the money in the world, but if you don't have a relationship, it's good for nothing.”
Taking a company global makes it stronger, says Shannon Fisher, an account manager with Export Development Canada (EDC), which provides small-business owners with a number of solutions to help promote trade in foreign markets, including credit insurance, financial guarantees, risk sharing and advice.
In some markets, however, financial assistance and advice will only get you so far. Marco Mo, founder and president of FIT Outsourcing Solutions Inc., says his company likely wouldn’t have been able to provide its services in China without the help of the membership director of the Canada China Business Council (CCBC).
“The biggest thing about penetrating the Chinese market, and I’ve certainly done this long enough, is that it's not what you know, it's who you can get to listen to you,” Mr. Mo says. “Their membership director got us meetings with any Fortune 500 we wanted in China, which is unheard of for a small company to do. I could be cold-calling my brains out and wouldn't get those connections.”
Raul Papaleo, president of the Brazil Canada Chamber of Commerce (BCCC), says it would be very risky and difficult for a Canadian entrepreneur to penetrate the Brazilian market alone. “The culture is different, the language is different, there are some legal aspects that you need to pay attention to, so if you have someone who is already established in Brazil it is a lot easier, cheaper, and faster.”
While the BCCC specializes in connecting Canadian entrepreneurs and business leaders in Brazil, there has been an emergence of private companies that work as consultants and integration managers.
“The chambers, they may link people together, and they make events, but the basic role of the chamber is to promote Brazil in general, and to be a point of contact for people that do business in Brazil,” says Jose Bacellar, founder of Bacellar Venture Partners (BVP). “If you ask the BCCC, ‘Can you help me find an accountant in Brazil?’ they can't. ‘Can you help me find a lawyer?’ or ‘Where should I put my company? In San Paulo, Rio, the North East? Where are my clients?’
“All these questions the chamber can't answer for you, so we actually play the role of consultants and also oversee implementation.”
Mr. Bacellar says that while his rates may be higher than a membership with the BCCC, it is much cheaper to employ his services than to hire a country manager. “The price is done on the alternative cost of having an executive of my tenure and my experience doing the job,” he explains, adding, “if and when we achieve the proper milestones, then I get a success fee.”
Mr. Bacellar is an active member of the BCCC, and he says Canadian small-business owners should use chambers of commerce and business councils to help find contacts in foreign markets. While these organizations are a good starting point, Mr. Bacellar adds he is better positioned to serve the financial interests of his clients.
“The chamber must be neutral, but I am not neutral. I will be hired to protect, defend, and secure the rights and the interest of my clients. They can't tell you to your face, ‘this lawyer is great but too expensive.’ In Brazil, it's not necessarily that the most expensive thing will provide the best results.”
Mr. Bacellar says he helps his clients figure out not just what to do when entering the Brazilian market, but how to do it. “Knowing the ‘what’ is quite obvious, but ‘how’ to do things are not that simple. My role, what I offer, is to make that path less rough.”