When it comes to launching a Canadian product in a densely populated emerging market such as India, Brad Loiselle believes there's no such thing as being overprepared.
That is why he and his staff at the Ottawa-based e-learning company Skillsdox Inc. spent more than two years researching the needs, risks and opportunities in India before building a training platform to suit that market.
"The first year I was meeting with company after company after company [in India], asking them the same questions," he said. "I went through that whole process of understanding how they do business."
Skillsdox, which markets Canadian education and skills training, has already landed contracts with the Bombay Stock Exchange, the Association of International Wealth Management of India and other project management groups since entering the Indian market in January.
Finding success in a quickly growing market not only requires a financial investment but also patience and finesse, Mr. Loiselle says. "We're entrepreneurs. If anyone's going to crack the nut of providing this kind of product and this delivery mechanism and network in India, we're the ones who are going to do it," he said.
For entrepreneurs daring enough to penetrate an emerging market, the rewards can far outweigh the risks. Here is advice from the experts.
Speak to the local business council
Don't be intimidated, advises Peter Sutherland, the president and chief executive officer of the Canada-India Business Council. "It's hard to make it, but once you do, your customers will stay with you and your business will grow."
Business councils such as the C-IBC are a good starting point. They offer their members the opportunity to network with other Canadian companies operating in that region, Mr. Sutherland says.
"Once you've done your homework and decided there is a demand for your product or service, you have to get over there, because you can't do it all from afar," he says. "You have to get on the ground and get a feel for what it's like."
Find the right partner
It's vital that entrepreneurs find a local partner to represent them in the country full time. "Choosing the right partner is the single most important step that the Canadian company, small or large, is going to take. After that it's really just a lot of hard work," Mr. Sutherland says.
Compile a list of potential partners before visiting the desired market, advises Stewart Beck, the president and CEO of the Asia Pacific Foundation of Canada.
"Then get on the plane and go and actually meet people and establish the relationship and determine whether you can be successful," he says. "Understand what the expectations are, understand that it's a long term investment in terms of developing the partnership."
Protect your investment
Once a partner is in place, it's vital for small businesses to protect themselves from the risks that come with working in emerging markets, which is where Export Development Canada can help.
EDC, which is the federal government's export-financing agency, "comes in once the company has identified a particular buyer they want to sell to, when they're actually in negotiations for a contract," says Mark Bolger, the chief representative for EDC in Asia. "There are things available from EDC that can help mitigate some of the risks that are involved with exporting, or just give the exporter the comfort that they have the financial capacity at home to deliver that contract."
EDC provides accounts-receivable insurance, covering up to 90 per cent of losses resulting from non-payment, an unfortunate but very real risk that comes with exporting to riskier markets. EDC also offers political risk insurance, performance security insurance, "contract frustration" insurance and other financial tools.
Be prepared to expand
While it's important for entrepreneurs to prepare for a worst-case scenario, they should also be ready to expand quickly.
Some small businesses "don't have the budget to scale as quickly as they should," says Raj Narula, director of strategic initiative for Wesley Clover International, who has spent 12 years helping Canadian businesses find strategic partners in India.
"Once you believe that you have traction for your product and you've got some sales, be prepared to ramp up very quickly, because you will get good referrals and you will be able to leverage it," Mr. Narula says.
Don't be afraid
Those who have spent time working in emerging markets believe fear is the single greatest barrier to opportunity.
"Don't be scared of it, take a trip and get out there," Mr. Bolger says. "These are absolutely fascinating markets filled with opportunity, and there are ways to mitigate a lot of the risks. It means you're not doing it alone."