3 ways to increase your chance of export success | BDC.ca
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3 ways to increase your chance of export success

BDC study shows that succeeding in a foreign market is closely linked to leadership and commitment

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Businesses that export tend to earn bigger profits, be more productive and pay higher wages than domestically focused companies.

And exporting isn’t just for larger companies. Three in four of Canada’s 70,000 exporting companies employ less than 20 people.

But exporting can be risky, complex and costly to initiate. So what can do to improve your chances of success when preparing your export projects?

A 2017 BDC report on how export can be a key driver of SME growth and profits highlighted three attributes that helped the most successful Canadian exporters ramp up their exports:

  1. prioritizing exports as critical to success
  2. properly researching the target market
  3. putting adequate resources behind their efforts

Attributes tied to strong sales growth

Over 40% of companies that did all three of these things had strong annual international sales growth of 20% or more in the prior three years, according to the BDC report, which was based on a survey of 735 Canadian SMEs that export.

Among companies that did none of these three things, just 7% had the same level of growth. The three attributes were also linked to strong profit growth.

Here is how successful exporters put these attributes into action.

1. Prioritizing exports as critical to overall success

When it comes to export success, it seems that commitment is key. Survey results show that companies that put a high priority on international operations were 278% more likely to have high sales growth than other firms.

Keep in mind that each export market can be very different. Even if you’re already exporting to one country, a new market typically has different regulatory challenges, consumer tastes and competition. You may need to start almost from scratch for each new country.

Leaders who believe these export efforts are necessary for the future of their company will be more likely to put in the time and resources necessary to make their project a success, even when faced with difficulties.

2. Properly researching the target market

Understanding the local environment and business culture is critical to exporting success. BDC’s survey found that a thorough assessment of the competition in the target market before exporting was linked to 171% higher odds of high sales growth.

Here are four other strategies that successful companies also used:

  • Develop local business contacts—The vast majority of exporting entrepreneurs (83%) say developing business contacts in target markets is essential to success. This is borne out in results. Firms that used this strategy had 126% greater chances of high sales growth.
  • Build awareness—Many successful exporters develop understanding of target markets by conducting market research, attending trade shows in target markets and spending time travelling to target markets.
  • Tap networks—To find reliable foreign partners, many businesses rely on existing networks and Canadian government resources. These include industry associations; chambers of commerce; the Canadian Trade Commissioner Service, which provides information and advice on how to do business in international markets; and Export Development Canada, which offers credit insurance to help protect against losses if a foreign customer doesn’t pay.
  • Consider international experience in hiring—Employees with international experience can bring invaluable insights to your research of target markets. Consider this factor in hiring.

3. Putting staff, time and money behind their efforts

Exporting success takes investment of staff, time and money. That includes devoting sufficient resources to adequately learn about the target market.

Many successful firms appoint a dedicated export team to guide their efforts. Firms with at least one full-time person assigned to handle international sales had 81% higher odds of strong sales growth regardless of business size, industry or export strategies.

Hiring someone with in-depth knowledge of the target country can also bring invaluable insights to your export drive.

5 factors that are not connected to export performance

The BDC survey also identified factors that don’t seem connected to strong export performance:

  • willingness to take risks
  • adaptation or customization of products and services to local markets
  • growth ambition
  • legal and regulatory obstacles in foreign markets
  • business owner’s age and level of education

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