When Mary Whittle started building Clear Lake Wineries Inc., a business selling wine from Ontario to China, she anticipated it would take about four to six months to send her first shipment overseas.
Eighteen months later, Ms. Whittle booked her first 20-foot shipping container, set to arrive in China this November filled with 600 cases of wine from four Ontario wineries. The product will be marketed to millennials in China, sold in a grocery chain and on e-commerce platforms.
“I always knew that doing business in China was going to be hard,” Ms. Whittle says. But for the Toronto entrepreneur, bringing Canadian wine to China has been even more time-consuming, costly and complicated than she thought it would be.
“I would say 80 per cent of my last year has been spent trying to navigate through all of the requirements from the Chinese government and requirements from the Canadian government. It’s mind boggling,” she says.
Before her company’s products will even land in China, Ms. Whittle estimates she has spent about $100,000, on site tours, consulate meetings, legal work, labels, fees for shipping, insurance and importing, and basic development of a platform on WeChat, a popular app in China. She estimates she will spend at least another $100,000 in her first year of operations.
Ms. Whittle’s experience is not uncommon. While a weak Canadian dollar and limited domestic growth create favourable conditions for Canadian firms looking abroad, entrepreneurs and experts agree that small businesses face challenges delivering their products outside Canada.
At the Toronto Region Board of Trade, Gwenaële Montagner, a former Canadian trade commissioner in Johannesburg, runs the organization’s Trade Accelerator Program. The popular hands-on program, launched in December, 2015, helps companies to build an export plan. Sixty-five companies have participated, and discussions are under way to expand the program nationally.
“I think over all there’s probably a lack of understanding that to go international requires a lot of resources, and a lot of resources that are not just financial but very much linked to time,” Ms. Montagner says. The biggest obstacle for businesses looking abroad, she says, is finding the time required to build an export market.
Business owners need a strong understanding of their new market, Ms. Montagner says, gained through extensive research and visits to that country. She recommends monthly trips as the market is initially developed. While business relationships in North America are commonly built over an initial meeting followed with e-mails or phone calls, in many other countries getting to know someone is expected to be done in person, Ms. Montagner says.
The cost of going abroad varies greatly, depending on the company, its products or services, and its chosen market. Businesses face costs for travelling, trade-show participation, a dedicated sales force, marketing, regulations and logistics, Ms. Montagner says.
While doing business abroad can be costly, Ms. Montagner says that financial support exists for exporters. The Trade Accelerator Program helps participants to navigate existing help, as often companies don’t know what’s out there.
For Rosanne Korteland, who runs Country Chic Paint from Duncan, B.C., a strong relationship with shipper United Parcel Service (UPS) has been key to helping her expand her business in the United States. Ms. Korteland and her husband started the furniture paint company in January, 2014, and their products are now available in 250 retailers across the United States and Canada, with about 50 per cent of sales from the U.S.
“Sometimes trying to figure it all out can seem overwhelming, but it just comes down to making the right connections and talking to the right people,” Ms. Korteland says, noting the company used other couriers before finding a good fit.
Another learning experience was opening a third-party warehouse in Indiana, which has saved the company money and increased efficiencies. In hindsight, Ms. Korteland thinks Country Chic Paint should have made that switch sooner.
When Darryl Nelson’s company got its first job outside Canada, cleaning up a pipeline spill in Texas, the chief executive officer of Edmonton-based Nelson Environmental Remediation Ltd. remembers not knowing where to start.
A full-service firm specializing in soil remediation and contaminated site restoration, Nelson Environmental Remediation provides personnel and equipment for each project. Getting Canadian staff approved to work in the United States involved quite a rigmarole, Mr. Nelson remembers. “It was very daunting,” he says.
But since that initial job about 16 years ago, Nelson Environmental Remediation has worked across North America, in Europe and Africa. Its current projects are in North Dakota and Quebec, and there’s potential for work in China and Kuwait.
Amid the continuing slowdown in Alberta’s oil sector, exporting has proven to be crucial. “If we’d stayed at home and just served this market, we may have gone broke in the past year,” Mr. Nelson says.
Mr. Nelson’s advice to other small businesses looking to develop export markets is to use existing resources. “There is so much help available, but people don’t know who to call,” he says.
He recommends starting with the federal government’s Trade Commissioner Service, then Export Development Canada, followed by the provincial government. Ask those organizations to connect you with Canadian business people who have worked in the market you’re exploring, Mr. Nelson advises, in order to learn from the problems they faced and successes they had.
Mr. Nelson now spends the bulk of his time as a strategist and company ambassador, developing relationships in new markets. He values advice a trade commissioner once shared about the qualities required to work abroad: You have to be patient, professional, persistent, polite, and, perhaps most importantly, present. “You can’t get the work done unless you’re there face to face,” Mr. Nelson says.
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