A myth revolves around the idea that international markets are inaccessible to small businesses. However, almost any small business can become competitive in global markets with consistent effort. A small business can successfully enter the export market by strategizing market options and technological applications.
Exports contribute to the growth of small businesses by expanding their access to new markets and consumer opportunities such as:
Increase customer base:
Export provides an opportunity to increase customer relations beyond your local surroundings and widens your business’s value by maintaining constant contact with prospective and existing customers.
Reduce company vulnerability:
Small businesses become resilient to going out of business during economic crises, political unrest, and natural disasters when they create an extensive geographic reach through export.
Increase profits:
Exporting is essential to any business’s growth strategy as it increases earnings and creates jobs.
Extend product life cycles:
Exports extend the product’s life cycle from the time of its introduction through its growth, maturity, and eventual decline.
Reduce production expenses:
By selling products and services overseas, small businesses can take advantage of lower production costs in other countries. This can help them to keep their prices competitive and increase their profits.
Government funding for export projects should be seen as an opportunity for small business enterprises to reach new horizons in international markets. International trade may be the key to overcoming current economic obstacles, and it can assist businesses, especially small businesses located outside major cities, to increase their profit potential by expanding their opportunities and market reach.
Many small and medium-sized businesses (SMBs) operate within their comfort zones, never exploring the frontiers that await them. However, if they want to stay competitive and keep growing, they need to start thinking outside the box.
Government Initiatives to Help SME Exports
To affirm the belief that export trade is feasible for small business enterprises, Export Development Canada (EDC) came up with a project titled The Export Impact. EDC is a government-owned enterprise that serves as Canada’s export credit agency with a mission to promote and develop trade between Canada and other nations and to enhance Canada’s international competitiveness.
The Canadian government-owned enterprises help companies enter new markets confidently by reducing financial risk. It helps companies get more international orders, sign new contracts, and make global connections, thus aiding the growth of their businesses.
A lack of awareness of export possibilities keeps many small businesses from expanding into export trade. The campaign emphasizes the value EDC can bring to businesses as a partner and how it can assist them in achieving global success. The strategy also aims to inspire Canadian business owners to enter new markets by showing the potential benefits to their lives and livelihoods.
CanExport SMEs is a funding program intended to promote and enhance the diversification of Canada’s trade, which started in the fiscal year. It provides grants and contributions to Canadian businesses to aid them in preparing for and establishing a presence in international markets where they currently have minimal or no sales.
CanExport funds activities like gathering market data and information, applying for intellectual property protection and certification in international markets, seeking expert legal and business advice, translating, adapting, or creating marketing materials, along with attending virtual trade shows, networking functions, meetings, or conferences.
Small and medium-sized businesses have up to $50,000 in funding to assist with international market development activities. The program reimburses up to 50 percent of export marketing costs for products and services.
SMEs passing the eligibility criterion of being for-profit, being an incorporated legal entity, limited liability partnership (LLP) or cooperative, having a Canada Revenue Agency business number, employing fewer than 500 full-time equivalent employees, and having $100,000 to $100 million in declared revenue in Canada during their past fiscal year (or 12 months for quarterly filers) can apply for the project.
Business Women in International Trade
The Trade Commissioner Service (TCS) helps Canadian women-owned and women-led businesses expand into global markets by opening doors and creating opportunities.
As a part of the initiative, TCS helps women entrepreneurs explore new markets and meet potential buyers and partners on a women-focused international business delegation with the Trade Commissioner Service. In addition, it provides monetary access support to fuel the company’s international growth through business loans and government contributions.
To promote the Business Women in International Trade, TCS provides export help by connecting with the right information, people, and programs to gain insights that will guide smart export decisions. In addition, giving supplier diversity opportunities that help women’s businesses access exclusive contracts with governments and Fortune 500 companies
Export: The Essential Principles
A systematic approach to export development is essential to achieving commercial success abroad. Here is a guide to help you learn the essential principles of export.
In the initial phase of exporting, it is wise to apply tried-and-true export strategies. Even while following the conventional procedures, a small business should be able to provide customers with products and services of superior value and quality. It should illustrate sustainable competitive advantages that distinguish the company from its competitors.
Small businesses should realize that free trade agreements are reciprocal. Under the free trade agreement, just as Canadian firms have access to foreign markets, so do foreign firms to the Canadian market, thereby increasing competition. Small businesses can increase their resilience to economic downturns by adding value to their products and services and entering the international market.
The Free Trade Agreement with 49 countries provides 1.5 billion consumers worldwide. Small businesses can use this opportunity to establish a presence in multiple as the FTA provides lower or no tariffs, making it cost-effective to export their products and services to new markets.
Bureaucratic agreements alone cannot ensure improved sales. Small businesses should strengthen international customer relations through better advertisements and increased quality of products and services that help create a better brand name overseas.
Since the pandemic, customers have shown a shift in shopping as more prefer the digital space to look for variety cost-effectively. Small businesses are improving their digital presence through websites and social media accounts. Investments in digital innovations should be taken as a means to target global online buyers.
Developments in e-commerce and online marketing enable Canadian small businesses to exist solely in the digital space and to expand internationally without the need for physical stores. Due to the high quality, originality, dependability, and eco-friendliness of their products and services, Canada’s exports have significant international appeal. Small businesses can utilize this branding to establish a solid presence in international markets with a larger customer base.
The signing of international free trade simplifies the legal process of export trade, helping small businesses reduce border-crossing delays to member countries, which gets your product to market more quickly.
However, increasing market presence can be risky due to the fact that different economies function differently and sociopolitical factors govern financial changes. Small businesses with FTAs safeguard against such unprecedented changes as they provide small businesses with better predictability, protection, and transparency in foreign markets.
The Budget 2022: A Plan to Grow Our Economy and Make Life More Affordable acknowledged that small and medium-sized businesses are the backbone of the Canadian economy. Hence, the government proposed new measures in Budget 2022 to support small and medium-sized businesses to grow, innovate, and stay competitive.
The government is taking a holistic approach to support small businesses to take advantage of the benefits of international trade to improve their sales and profits, thereby boosting their presence in the international markets. Small businesses should leverage such measures to their best advantage to support the growth of their businesses and the economy.
If you’re looking to expand your business internationally, or are just curious about the various export development and government policies available to you, be sure to subscribe to CanadianSME Small Business Magazine https://lnkd.in/dbqmSKN. For the latest updates, visit our Twitter page at @canadian_sme.
