Exporting an idea or product abroad has its hurdles, but can offer a world of new opportunities for Canadian small and medium-sized enterprises (SMEs). According to a 2013 study, less than 2 per cent of such businesses are exporting. With such a small percentage of organizations taking advantage of the global marketplace, the potential growth for SMEs is vast for both themselves and the Canadian economy.
Breaking out abroad is not easy, but successful SMEs have found new opportunities by using a few key tactics. These tactics include creating a borderless product, networking to make key contacts abroad and embracing technology to both reduce costs and reach out to potential clients.
Imprint Plus is one such SME global success story using these tactics. The Richmond, B.C.-based company specializes in name badge systems and boasts 35,000 customers in 75 countries.
CEO Marla Kott is passionate about globalization. She joined the 32-year-old organization in 1990 and has grown it to around 70 employees. One of her major strategic shifts was to start actively exporting the company's product to the USA and abroad.
Due to the nature of the hospitality and retail industry, international growth was originally organic, but Ms. Kott saw an opportunity and focused the business on a much more international strategy.
"To grow we looked at the industries we were working in. There were 6,000 hotels in Canada we could sell to and 60,000 in the U.S," says Ms. Kott. To reach those key US markets, she first had to develop a product she knew she could sell. For Imprint Plus, it was a reusable name badge system that could be scaled for organizations that had anywhere from 2 – 200,000 employees. "The change in the product and the strategy to be able to sell to a variety of organizations – that led us to go to the U.S. because only then did we have a product and a profile we knew would work for that market."
As the company expanded Ms. Kott learned that product development is just one part of strategic planning. "As we've grown we realize we need to become lean, we need to have a budget for innovation, and we need to have a budget for training our staff. Each piece of the building block is a piece that gets you to the next level." Spending on education and training is critical for her organization, especially when dealing with headaches that come along with international trade such as currency challenges and regulations.
One of the big ways Ms. Kott built her global brand was by networking to develop strategic relationships. WEConnect International, a governmental organization that connects women's business enterprises with mentors, education and multinational corporate buyers, was named by Ms. Kott as a key resource. "Through networking organizations not only did we make connections in key companies, but these companies have now listed our products and we are selling through them. That's huge." Ms. Kott continues to push her product abroad, and is a big supporter of the various women's networking events she attends.
Foxy Originals is another organization that used women's networking events to make connections and pursue opportunities abroad including in the U.S., Japan, and the U.K.
Friends Jennifer Ger and Suzie Chemel started the Canadian made jewellery line in 1998 and they currently have five employees and 15 contracted sales representatives. The Toronto-based company is known for its clean lines, high quality matte finish and accessible price point. The products are sold throughout the U.S., Asia, Europe and Australia in both major retailers and independent boutiques.
"We always wanted to be seen as a fashion brand representing Canada on the global scene," says Ms. Ger. To expand their brand internationally they met with a representative from the Ministry of Foreign Affairs at a Women in Business event. "Before travelling to Japan and Paris we were introduced to the consular office in advance. In Japan, an employee there put us in touch with distributors, got our information out to the media, attended meetings with us, and has continued to show our catalogue at trade shows." These insider connections proved invaluable to getting their product to market.
In the U.S., to kick-start their expansion the pair headed south to a New York tradeshow where Foxy Originals was met with incredible success. More trade shows followed along with more orders. "We were buoyed by the reaction to our product and that has kept us continually motivated," says Ms. Ger.
The global expansion has paid off in spades and the media coverage increased once they were in other markets. "We've been featured in InStyle, Cosmo and Oprah. This coverage really helps us to prove to others that our product is a successful brand," said Ms. Ger.
But as the popularity of Foxy Originals grew, so did the number of knockoffs.
"The more you have your product distributed, the more eyes you have on your products and the more potential for it to be copied," says Ms. Ger. The issue hasn't deterred the founders from continuing their expansion policy and they are confident in the quality of their jewellery. "The knockoffs have a similar look but often these manufacturers take shortcuts in their production," says Ms. Ger. "Nothing is going to get out of our factory without us overseeing it. Our product is a superior product."
Trade shows continue to be a major source of sales for the company, but technology is fast becoming another way to find new retailers and make sales. "Our customers like to buy from us online, so we opened an online store. Maybe soon they'll want to buy from us through other applications so we just have to make sure our product is there wherever they want us to be," says Ms. Ger.
For Aman Mann, selling online has been a key way to grow sales of his software to organizations in over 25 countries. Started two years ago, Procurify.com is a 20-employee company that creates software for companies to manage their internal spending and it is sold using a subscription-based model online. The organization is based out of Richmond, B.C.
Mr. Mann, the company's CEO, has been able to run the organization very lean. "Our dollar price is competitive because we utilize technology, and we charge a fraction of what other organizations charge because we are able to do that. Otherwise, our prices would have been through the roof." It's this advantage that he believes allows his company to compete on a global scale.
"There's so much technology out there that companies don't really pay attention to, but it can really help," says Mr. Mann. "In Canada we are 20-30 years behind in technology in enterprises. We are not looking at technology and how to utilize it but it can not only support our local economy but also global growth."
Mehdi Farahashi, chair of Montreal Local Global Research Group and associate professor of at Concordia University has been looking at the role of Canadian small and medium-sized businesses in the global value chain. He echoed many of the same thoughts as the organizations above.
"One of the major barriers that we have is limited resources and knowledge about markets other than the U.S. and lack of access to social and business networks," says Dr. Farahashi. He believes that making partnership or alliances is really the way to go to get into different markets and gain management experience.
Dr. Farahashi discussed some of the progress made so far by the government but says more has to be done. "I am happy that the government has made an agreement with the EU and South Korea. These are signs to improve or at least move away from the US market." He believes that now more focus needs to be on national institutions to help SME's with the headache of rules and regulations dealing outside of the U.S.
With a whole world outside our Canadian borders, opportunities are there for those willing to embrace technology, create key social networks and see past the headaches of patent infringement and ever-changing regulations. More SME's just need to take that leap of faith and explore their options.
Six tips for expanding globally from Marla Kott, CEO of Imprint Plus
1. Innovate and create mighty products or services that are unique.
2. Do an extensive competitive analysis and don't stop at the U.S.
3. Speak to prospective customers.
4. Be fearless and look at money spent attending trade shows as education funding.
5. Educate yourself continuously through government programs, trade commissioners, and business intelligence.
6. Join an international networking organization.