For many entrepreneurs, "going global" is something big companies do. If you run a small company with limited resources, you might ask yourself, "How could I possibly afford it?"
"Take it one step at time … but get started," replies Carl Gravel, national director of manufacturing at BDC. More than 30 per cent of BDC's lending portfolio involves the manufacturing sector. Gravel's role is to help clients in this sector to develop international markets.
Careful but steady
"First, invest resources where you'll see positive results, such as winning a new contract in a foreign country," he says. "You can reinvest any profits you make in other efforts down the road, such as setting up a distribution network. By taking it step by step, you can avoid draining your cash flow. Once you have identified what works best for your company, it's easier to get the financing."
Gravel cites the example of a small aeronautics firm that makes aircraft components. "One of the first steps for this company was building credibility and acquiring the tools needed to compete in the global arena," he says. For example, the company applied for internationally recognized security certification that gave it access to contracts from the biggest players in the business. "The certification gave them the added value they needed to compete and win more business."
Choose your partners carefully
With those gains in hand, the company then outsourced some of its production to China. "They kept design and engineering in Canada but hired companies overseas that could manufacture quality products at lower cost," Gravel explains.
"The most important thing is to choose the right partners who understand your business goals and share your values," he says.
Build on your experience
Once the firm had become more familiar with China and forged alliances with suppliers, it decided to exploit the booming airplane market there. "They had gained the experience to invest in a more complex initiative," says Gravel. "They recognized that exporting from Canada to China was too costly. A better strategy was to build a plant on foreign soil; this gave them better control of what they were producing and direct distribution access to clients."
Whatever you do, have a clear strategy and the means to implement it. "Focus on your company's unique strengths. Fill any gaps where your firm may be weak. You may need to improve your distribution methods, brand recognition or employee productivity. By making any one of these improvements, you're closer to achieving global success," Gravel says.
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.