While the prospect of competing globally can seem a little daunting for entrepreneurs, Bruce McConnell says he believes small and medium-sized businesses can succeed if they focus on two key areas.
"Essentially, it's either about seizing opportunities for new markets or finding ways to improve how you do business so you can better compete," says the vice president of BDC Consulting for strategic initiatives and operations support. A common term entrepreneurs will often hear today is "supply chain management," which is how well your company handles the flow of information, internal and external suppliers, production, distributors and customers. "Put simply," he says, "You have to be in the best shape if you want to win the game."
Doing business in the international arena
On one level, there's an obvious wealth of new businesses out there to exploit. And the opportunities are as close as New England or Mexico. For entrepreneurs considering exporting initiatives, for example, the U.S. remains a reliable and dependable market. "It's easier when we deal with people on familiar turf. We share cultural similarities and largely the same business practices," McConnell says.
McConnell also points to the world's developing or emerging economies as a major source of potential business for SMBs. Generally, these countries have low to middle per-capita income and now have more open economies. Good examples are India, Brazil, Russia and China, which are all seeing explosive growth. "These countries have a population hungry for new products and services, so Canadian small and medium-sized businesses can look at reaching these consumers," he says. "You do business where you can drive the most growth."
Supply chain management: what's your strategy?
A key strategy for SMBs today is to first carefully examine their entire supply chain, says McConnell. "Obviously, this can mean a lot of different things for entrepreneurs, depending on their industry," he emphasizes. As a small business, you could be looking at one small step in your supply chain. For example, if you're a company that competes on labour, then you might need to look at cheaper ways of manufacturing your product overseas. Or if a business activity such as handling logistics is too time-consuming and taking you away from your core business, then you could consider outsourcing that activity.
Examine your business model
In the same way, a business that offers a product with little added value in a domestic market might need to "niche up" for a global one, contends McConnell. "It's important to find innovative ways to differentiate yourself in a global context because so many businesses are vying for that piece of the pie," he says. To sharpen their competitive edge, some companies may even have to change their business model entirely. For example, as a manufacturer in Canada looking for a cheaper way of getting your products to shelves, you might consider importing certain components of your supply chain. "The trick is to keep your eye on your business processes and ensure that they're delivering the best possible results."
Getting external advice
McConnell highly recommends that entrepreneurs seek outside advice about how to best exploit the opportunities of globalization or sidestep threats.
Typical areas of advice that entrepreneurs can look for are: strategic planning, which can help SMBs assess their strengths and weaknesses and devise concrete plans to guide their companies in the long-term. Entrepreneurs can also benefit from marketing and research in export markets, or improving operational efficiency to increase productivity or improve business processes. On the human resources front, companies can seek counsel on how to hire and retain the best people in a highly competitive labour pool, which is no longer limited to our backyards.
"Of course, every company has its unique needs. We look at your business reality and then determine how we can best help you excel in the global market," says McConnell. "This is an exciting time to be in business and we're very pleased to provide that vital support."
Content in this section is provided in partnership with the Business Development Bank of Canada. BDC provides entrepreneurs with financing, venture capital and consulting services. To find out more go to BDC.ca.