Northern Ontario has both benefitted and struggled as a result of our historical reliance on our phenomenal commodities. These commodities were the basis for our residency in the North.
Our entrepreneurs learned to service the commodity-based industries in the North through the lean times, providing solutions to reduce the cost of production and extraction throughout the decades. Some of these same service providers have also learned that, to succeed in the long-term, they need to grow their businesses, while they have the momentum and capital to do so. These entrepreneurs are taking their “solutions” global.
Increasingly, the business owners and entrepreneurs I work with are asking themselves tough questions. These questions probe how to best navigate the changed landscape of doing business outside of Canada. As business owners and entrepreneurs, are we as aware as we need to be of developing business opportunities and trade internationally?
Canada’s future prosperity depends to a large extent on Canadian businesses’ ability to compete globally by expanding successfully beyond the country’s borders, thus taking advantage of global markets and opportunities. While the potential rewards can be significant, identifying and capitalizing on these opportunities is not easy or straightforward.
If you are contemplating expanding your business internationally, here are some fundamental questions you should consider:
What business model will you use to enter the global market? Will you open a representative office, consider a joint venture, use a distributor, establish operations or acquire an existing business?
How can your company expand into a foreign market or utilize a foreign enterprise in the most tax-efficient way?
What options does a Canadian company have to finance the business operations or purchase?
Do you have a plan in place to protect your intellectual property?
How easily can money be repatriated to Canada?
Can you replicate your operating model beyond our borders?
Do your current supply chain logistics support foreign expansion or will you need to find alternative sources?
What is your exit strategy?
Expanding to foreign markets can offer growth opportunities or, for some, significant cost savings. Spending time to gather market intelligence up front is key. Specifically, understanding the lay of the land, including the culture, labour laws, local operating techniques, as well as both international and local tax legislation is crucial. Many Canadian businesses have fared well. The entrepreneurs I know that have successfully expanded their operations globally say that the potential risks, while sometimes daunting, are worth the reward. Whether you want to tap into the increased customer base in these markets or reduce costs through better sourcing, opportunities exist and can be enhanced with careful planning, the right knowledge, experience, and advice.
