Canadian businesses exporting goods or services are facing some of the toughest financial times in recent memory.
After opening the door to international trade, they face a triple-headed challenge: loss of a competitive pricing advantage as a result of the higher Canadian dollar, sky-high fuel prices jacking up transport costs, and rising interest rates, says Perrin Beatty, president and chief executive of the Canadian Manufacturers & Exporters, whose members represent three-quarters of the country's manufacturing output and 90 per cent of exports.
These risks shouldn't deter business owners who are well prepared, he adds. "It's certainly a more challenging environment. You have to be sure of your profit."
Canada's economy is heavily export-driven, with exports representing about 40 per cent of our more than $1-trillion gross domestic product.
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Our relationship with our southern neighbour plays a key role: Canada and the U.S. are the world's largest trading partners, with approximately $1.3-billion flowing back and forth daily.
With that amount of money involved, it's little wonder that businesses find a vast array of resources to get them started off on the right foot in today's challenging environment.
Here's where you can go for some advice:
Government
Exports are crucial to Canada's economy, so lots of help can be found from the federal government. Export Development Canada is the Crown corporation that provides trade finance and risk management services to the nation's exporters and investors in as many as 200 markets globally.
Although there are 35,000 exporters in Canada, about 8 per cent of them account for roughly 90 per cent of the dollar value of goods exported, says Carl Marcotte, vice-president of small business development at EDC. That's why the majority of EDC's customers are businesses with $25-million or less in annual sales.
Developing a successful plan to export beyond Canada's borders starts by looking inside the business, Mr. Marcotte says.
For example, a two-person company with $100,000 in annual sales will require different plans and resources than a 300-employee firm selling $20-million a year, he says.
Some businesses want help on how to start exporting right away, he adds, while others venture into it after years of building domestic sales.
"Given the shrinking boundaries around the world, a lot of people would think exporting is easy to do. It is a little more complicated."
The most common question businesses ask, he says, is: "Where can I find a buyer?"
EDC doesn't currently do much work much in this area, but instead deals with the other major questions on gathering market knowledge, getting financed to export goods, and insuring payments for shipped goods against deadbeat buyers.
The latter is a major concern for Canadian exporters, Mr. Marcotte says, and about 90 per cent of the non-payment insurance claims are from the U.S.
For some companies, usually manufacturers of expensive goods, EDC arranges financing for buyers.
Deciding when to export isn't easy, so EDC has a questionnaire on-line that walks businesses through the decision.
The website provides resources on everything from how to finance exporting, to customs preparation.
There is information on how banks help, including the Business Development Bank of Canada, as well as Canadian Commercial Corp., which facilitates government to government sales of commercial goods, Mr. Marcotte says.
EDC is one of the members of Team Canada Inc., whose website exportsource.ca helps exporters navigate the network of federal departments and agencies working with provinces, territories and others.
Third-party logistics
Many companies hire specialty firms to manage their exporting. There are roughly 500 larger logistics firms in Canada, Mr. Marcotte says.
Some of the more recognized options include UPS, DHL and Livingston International. The websites of the larger firms often provide information for exporters and some companies offer seminars.
At Livingston, about 75 per cent of customers' trade business is U.S.-related, says Jonathan Robinson, vice-president of North American transportation at the Etobicoke, Ont.-based customs broker and trade services firm. The business is divided into two facets -- freight and customs -- and the firm clears an average of 12,900 shipments a day into Canada and the United States.
"Small businesses with 15 employees or less may rely on us for everything," he says. "As companies grow, they hire their own logistics professionals."
As exporters grow and hire more staff to accommodate their exports, they can continue to use companies like Livingston for customs brokerage services, and arranging freight.
Exporters require representatives on the border, and when it comes to transportation, even an in-house expert might not know all the tricks of the trade.
For example, there is a baffling array of trucking companies out there, he says, all of which differ in terms of equipment, geographic region, shipment sizes and weights, and whether they take full truck loads or not.
"If you were to [arrange freight] yourself, you might be forced to deal with a rail yard, a steamship, and then what happens when it lands overseas?" Mr. Robinson asks.
"It's a lot easier to hire a travel agent for freight, than it is to do it yourself."
The biggest mistake companies can make, he says, is to treat their international shipments the same as domestic ones.
Ensuring the goods arrive at the right place, time, price and condition is harder than it sounds, and requires a separate business plan, he says.
"They fail to realize that when they're entering into a relationship with a foreign customer, there are going to be different logistical relationships. Many leave it to the last minute to hire a customs broker."
Trade professionals
Many larger exporters hire trade professionals as part of their team to help the export process. Talking to one, such as a lawyer, can yield good tips on the business process and how it has changed in recent years.
While new challenges have arisen to new exporters, older problems have disappeared thanks to technology, says Barry Appleton, managing partner at Appleton & Associates International Lawyers, an Oakville, Ont.-based firm that deals exclusively with international trade.
For example, it used to be that 250 was the magic number for a company's headcount before it could seriously consider exporting, he says.
But thanks to the Internet, an individual business can market goods, arrange transportation and customs through a courier company, and even arrange payment, Mr. Appleton adds.
For tiny companies selling items such as fashion accessories and the like, they may list some of their goods on eBay as a way to attract traffic to their website, and then arrange payment through a service like PayPal, Mr. Appleton notes.
It isn't until a company gets bigger that it needs to make the process more complex, he says.
The Forum for International Trade Training, a non-profit group in Ottawa developed by industry and the federal government, provides individual courses as well as a Certified International Trade Professional program.
Theresa Ebden is an associate producer with RoBTV.
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