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Opportunities for Canadian companies to extend their international reach have never been greater, thanks to today's global economy. Still, opportunities can quickly become liabilities in the hands of an unprepared entrepreneur.
Here are 10 tips to reduce the turbulence of flight into foreign markets:
1. Consider your market entry options. Will you engage in direct sales, or employ an agent or distributor? Will the distributor be exclusive or non-exclusive? Be careful about exclusive relationships, which can make you entirely dependent on a distributor before you are convinced they're the right fit. Also, do not rely solely on your distributor for market intelligence.
2. Get to know the local business culture. Knowledge of the business norms, regulatory environment, import/export practices, current competitive environment and customer behaviours in foreign markets is key. Take more than one trip to visit potential customers, your competitors' distributors, regulators and other people you'll need to know. Make no assumptions about how to do business in a particular country; countries that seem similar when viewed from Canada often have dramatically different business environments and cultures.
3. Choose your international team carefully. Your team members are a bridge between your culture, values and business expectations and those of the local environment. They are your brand ambassadors in the country, so trust is absolutely paramount. Do they share your values? Are they great communicators? Will they tell you when things aren't going well?
4. Be careful of any deals you sign early on. You can be relatively blind in the early days of doing business in a new country, and it's easy to make mistakes based on ignorance or lack of context. It's important to make sure these mistakes do not permanently damage your business. If you chose the wrong path to market, can you change? If your distributor isn't acting the way you expected, can you change distributors easily? How and where are disputes settled? Are there penalties to change or get out of deals?
5. Have an intellectual property (IP) strategy. Protect your trademarks and patents. Make sure to control your online presence in the country you are entering, in the local language, and don't hand your brand over to your distributor without the ability to get it back.
6. Ensure a tight bond between your head office and your international team. Find ways to connect with your international team/distributors on a regular basis. How do you ensure the international team has the tools and training to properly represent you and your products? How do your international markets provide feedback regarding the fit and marketing of your products into their specific environments?
7. Extend your values and culture. Your company should have core universal values about how to do business, how to treat customers and how to treat employees. While there will be local variations, these values and your culture should be immediately recognizable in all of your sales subsidiaries.
8. Mitigate the space/time disconnect. Canada is disadvantaged from a time zone and distance perspective. We have only a few hours a day of common work time with Western Europe, and virtually none with Asia, Eastern Europe and the Middle East. Since Europe's geographic position provides for "daylight" access to eastern North America as well as the Middle East and Asia, consider establishing a European base to manage distributor relationships in European, Middle Eastern and African (EMEA) countries.
9. Take advantage of Canadian government resources abroad. Consulates and agencies such as Export Development Canada can be exceptionally helpful in relationship building and in providing marketing intelligence and access to governments and agencies.
10. Be there, be yourself and enjoy the adventure. Being Canadian is a competitive advantage. Our cultural mosaic uniquely equips us to understand and respect many cultures. Our multicultural workforce gives us advantages as we enter new markets. The Canadian brand is powerful. People enjoy working with Canadians. We're seen as ethical business people, with high standards of quality and performance. Visit regularly the countries where you do business, and enjoy the experience of working internationally. It can be incredibly rewarding personally, and is a fantastic way to build your business.
Cameron Hay is an executive-in-residence at Communitech in Waterloo Region, where he advises technology companies on various aspects of business strategy. As CEO of Unitron Hearing, his work took him to 42 countries, and he has extensive international experience as a business consultant.