“Our customers tell us it’s some of the best honey they’ve ever tasted,” MacMillan says of Durston’s product, produced by bees let loose on only natural forage and orchards untreated by chemicals during the key spring pollination season.
With 16 employees, Durston didn’t have capacity to study international markets or how to expand to them. The company turned to BDC for advice.
“They asked a lot of questions that we hadn’t thought about,” MacMillan says. “It was very enlightening.”
With the outside help, he and Campbell evaluated whether their business was prepared to take on the challenges of exporting and whether it could ramp up production to meet higher demand.
Look for the best potential markets
Durston had to consider numerous details such as the best potential markets; how to meet international certification standards; and how to navigate differences in culture, language and packaging requirements abroad.
“It would take you forever to try to do all that yourself. There are so many little things you don’t think about,” MacMillan says.
With BDC’s help, Durston mapped out an export plan that included identifying three potential markets where its quality honey could do well—Japan, China and Dubai.
Planning and advice are critical
MacMillan advises other entrepreneurs to do the right planning upfront and bring in outside advice if needed.
“There are hundreds of things that could go wrong. You can spend a lot of money learning that the hard way.”
Here are four steps to prepare for international expansion:
1. Assess your readiness
First, step back and make sure your business is ready to expand abroad and that key employees are on board. Are financial resources in place to sustain your expansion effort?
You also need “soft skills” to see the expansion through to success. These include patience, good communication skills for building trust and dealing with foreign partners, and a willingness to adapt to another business culture.
2. Select your markets
Next, identify a few promising potential markets. You’ll want to start by focusing on a limited number of markets to focus your efforts. It can also be a good idea to concentrate on countries within a certain region. This can be more cost effective than choosing countries scattered all over the world.
You can visit the Canadian Trade Commissioner Service website for advice about promising markets by sector and for free market reports.
3. Plan your entry
Once you’ve found target markets, research them in-depth to plan your entry. Get familiar with things like the potential market for your product, any needed customization, regulatory and labelling requirements, cultural differences, the local competition and distribution options.
4. Consider your financing needs
Companies often underestimate the cost of expanding to foreign markets. That's why it's important to discuss your financing needs with your banking partners early on to find out what financing options are available.
BDC offers several types of financing, including the Xpansion Loan, which is geared towards Canadian businesses seeking to export. You may also consider getting insurance before you start exporting. EDC's credit insurance can protect your company against losses if foreign customers don't pay.
You’re now ready to start selling. Be sure to focus on long-term relationship-building in your new market—and again, be patient. It often takes at least six to eight quarters for an international expansion to take root.
For more advice on how to take advantage of global business opportunities, check out our infographic Take Your Business Global.