Do Your Homework to Find Your Markets

Do Your Homework to Find Your Markets

Market research is an essential step in the export process. With close to 200 countries in the world to export to, you want to make sure that you’re targeting the right ones.

Through market research, you can determine which countries hold potential for your product, who your competitors are in that marketplace, and what the trends are for your product in that market.

Screening Potential Markets

1. Obtain export statistics. Search the Statistics Canada website to see where Canadian exports are currently going.
2. Identify potential markets. Of the countries you have identified, which hold the most potential? Are the markets growing there? Remember to not just look at the largest markets; look at the smaller secondary markets that might have fewer competitors. 
3. Target the most promising ones. Of the markets you have identified, choose three to five that you feel hold the most promise, and begin further research.

Assessing Your Target Markets 

1. Examine product trends. Look for information on your product as well as related products. The Department of Foreign Affairs and International Trade (DFAIT) has free market research reports for various countries in different industry sectors. You can also look to Canadian industry associations that are related to your business. Even if you’re not a member, they might have research reports available to you.
2. Research the competition. You need to know who your competitors are. This includes both foreign competitors and domestic. Google is a great resource, as are the reports published by DFAIT.
3. Analyze the market. Research any factors that may affect the marketing and use of your product. For example, does your product name have a different meaning in the local language, or do you need to change your sizing to suit the local market? 
4. Identify barriers. You also need to know if there are any significant export barriers or import barriers. The most common export barriers are export controls for certain products. To check to see if there are any export controls for your products, check with the DFAIT's Export and Import Controls Division. Import barriers could include significant import duties or import regulations for your product. You will need to check with the foreign country’s customs agency to determine what these may be. You can also check with DFAIT's office abroad.
5. Choose a market. Once you have conducted market research, you should determine which market is most suitable. For a small business that is just starting exporting, we recommend that you target at most two markets at a time.

HOW TO EXPORT COMMERCIAL GOODS INTO NEW INTERNATIONAL MARKETS

So You Want to Export: Where do You Begin?

To begin exporting goods from Canada, you’ll need to add an import/export number to your regular business number. Please visit our Legal Requirements—Starting section for information on how to open a business in BC and how to add an import/export number.

You might also be required to obtain permits or licences, or follow specific government regulations, to export certain products. See Canada Border Services Agency’s Step by Step Guide for Exporting to determine what regulations you need to be aware of.

Are You Ready to Export?

An important question to ask is “Are we ready to export?” It’s not simply enough to want to sell your products internationally; you should also be prepared for this new business venture.

While export businesses differ, they all share certain characteristics, including a committed management team, production capacity, and financial capacity.

Export Planning

Just like your domestic business, your export business will require a comprehensive plan to help you identify the steps to selling internationally. A business plan will help you understand the legal requirements for getting your product into a new market, identify the costs associated with exporting, and develop an overall strategy for this new endeavour.

The Department of Foreign Affairs and International Trade (DFAIT) publishes a Step-by-Step Guide to Exporting and a Step-by-Step Guide to Exporting to the United States. Along with export plan templates, these guides allow you to: 

• Assess your company’s export readiness
• Build an export plan
• Research and select your target market
• Create an export marketing plan
• Determine the best methods of delivering your product or service to your target market
• Develop a sound financial plan
• Understand the key legal aspects of international trade

HOW TO FINANCE YOUR GROWING EXPORT BUSINESS

In Canada, there are programs and associations that support and promote exporting by offering financial assistance. For more information on these programs, visit the Trade Commissioner’s website, and follow the links provided.

Global Opportunities for Associations (GOA)

Formerly known as the Program for Export Market Development - Associations (PEMD-A), this program provides contribution funding to support national associations undertaking new or expanded international business development activities, in strategic markets and sectors, for the benefit of an entire industry (member and non-member firms).

Invest Canada - Community Initiatives (ICCI)

This program helps Canadian communities attract, retain, and expand foreign direct investment. ICCI also provides matching funds of up to 50% of eligible project costs per year, for a total contribution not to exceed $300,000 per project per year.

Going Global - Innovation (GGI)

The Going Global program is for those who are either: 

• A Canadian company or researcher
• Wanting to work with a foreign partner, or 
• Looking to solidify an international partnership for future R&D collaboration

The objective of Going Global is to “promote and enhance Canada's international innovation efforts by supporting Canadian companies and/or researchers in pursuing international R&D collaborative opportunities through the development of partnerships with key players in other countries/economies.”

International Science and Technology Partnerships Program (ISTPP)

The ISTPP program was announced by the Government of Canada in June 2005 to promote international collaborative R&D activities. The 5-year, $20 million program will increase the international competitiveness and prosperity of Canada by building stronger science and technology relationships with Israel, India, China, and Brazil.

Export Banks

In addition to grants, financing is available through various banks that support exporting, including:

• Export Development Canada (EDC) offers funding programs including accounts receivable insurance, pre-shipment financing, C-TPAT financing (Customs – Trade Partnership Against Terrorism), and buyer financing.
• NorthStar Finance complements EDC's export financing services by financing export sales of between $100,000 and $5 million, with repayment terms of one to five years.
• Business Development Bank of Canada (BDC) offers Market Xpansion Loans.
• Canadian International Development Agency (CIDA) offers financial support to companies wishing to export to developing countries through their Private Sector Directorate.

HOW TO EXIT YOUR EXPORT BUSINESS

If you’ve decided to exit your export business, or cease exporting your products, be sure to:

1. Close Your Export Account

If you decide that you’ll no longer be selling your goods abroad, you should contact Canada Revenue Agency to close your export account.

2. Review Your Contractual Obligations to Your Customers

Make sure you do not have any outstanding obligations to your customers, and that you have received final payment for your last shipment. If you have questions about your contracts, you should have a lawyer review them. If you don’t have a lawyer, you can contact the B.C. Lawyer Referral Service.

3. Understand the Legalities of Closing Your Business

If you’re exiting your business altogether, whether by selling your business, passing it on to your family or others, or through dissolution or bankruptcy, it’s important to consider the legalities of relinquishing ownership. Refer to our Legal Requirements—Exiting section for guidance.

TOP 5 TIPS TO BE EXPORT READY

It’s not simply enough to want to sell your products internationally; you should also be prepared for this new business venture. Here are some tips to help determine if you're export ready.

Plan, plan, plan.

While most people don't relish the idea of writing a 25-30 page business plan, if you are venturing into new markets, a well researched business plan will guide you through the process and save you a lot of headaches. If done right, your business plan should be able to tell you if there is a market for your product, how to best get into the market, how much it is going to cost you, and how much you should profit.

Be prepared for border crossing costs. 

How much is it going to cost to get your product across borders? In addition to the regular cost of doing business, international trade can also include international freight costs, customs brokerage fees, export insurance, and agent's fees or commissions. Some additional indirect costs include translations of labels, travel costs and currency conversion costs.

Remember, the government is on your side. 

The Department of Foreign Affairs and International Trade has nearly 150 Trade Commissioners posted in foreign cities (as well as 17 in Canada) to promote the export of Canadian goods. The Trade Commissioners can help with directories and manufacturer lists, assessing market potential, meetings with foreign buyers, and preparing products for entry into international markets. The Trade Commission’s Virtual Trade Commissioner website guides you through the process of researching your target country and sector, providing business leads, reports, business culture tips, contacts, and resources.

Make sure you get paid.

The most common form of payment when doing international trade is Letters of Credit (LC's). With an LC, you minimize your risk because the banks assure that the goods are delivered before the money is exchanged. If you are looking at ways of making sure that you get paid, talk to your bank about LC's.

Get good shippers.

Because transportation is such a big component of international trade, you need to be able to rely on your shippers so that you can meet the demands of your clients to get your product to them when they need it.

For more information on exporting goods from Canada, visit TRADESTART.ca

As you may have heard

As you may have heard, .XXX launched September 7, 2011 for trademark holders and will launch for non-trademark holders, December 6, 2011.

If you’re a small business owner and not selling products or services related to the adult entertainment industry, why should you care? In this article, you will find out what .XXX is intended for, why you should protect your brand and what options are available to you to protect yourself.

What is .XXX

.XXX is a sponsored top-level domain name designed for use by the adult entertainment industry. The Registry (ICM) has been lobbying for years to get this domain name approved and after many years, the ICANN board of directors voted 8 for, 3 against, 4 abstain at board meeting in San Francisco in March 2011.  Advocates of .XXX say it is designed to facilitate online responsibility and best practices for the global online adult entertainment Industry. The intention is that the new domain extension identifies websites with adult content, allowing them to be easily filtered out by internet users who don’t want their children or themselves to see adult content. In addition to identifying adult content, .XXX aims to protect consumers of adult entertainment from threats such as viruses, credit card fraud and identity theft.  

 

On the other hand we know that sex on the Internet is huge business and has been for many years, accounting a massive portion of revenue on the internet per year. Will all of the existing sites self regulate and move to .XXX? -Probably not. Will cybersquatters continue to take advantage of popular brands and trademarks and aim to profit from registering .xxx names? -Probably so.

 

Time will tell in terms of how .XXX will play out and how successful it will be in segregating adult content but for small businesses, we must all be one step ahead.