top of page
  • Writer's pictureDirk Baerts

Play your cards right internationally

For Canadian businesses, a lot of opportunities lay in selling their products or services abroad. With the world’s largest economy on its south border, there is a market there which is roughly 10 times larger than the local one. But there are also many opportunities overseas: the Comprehensive Economic and Trade Agreement (CETA), a free-trade agreement between Canada and the European Union, signed in 2016, removed almost all pre-existing tariffs between the two entities and opened a single market of 450 million consumers and 22.5 million small and medium-sized enterprises to Canadian businesses.

Still many companies have refrained from expanding their sales internationally because of the fear of the unknown raising several questions: is there a market internationally for the products, are the products adapted to the international markets, can the company afford an international expansion in terms of financial & human resources, where to get started, what about the language barrier, and so on. All valuable questions, yet very solvable with the right level of planning and support, which could open up an enormous potential for the company.

When a company starts to look at international expansion, the first question is has to ask itself is whether or not there is a market abroad for the products or services the company offers, and how big that market is. The business will need to estimate the total addressable market (TAM), which represents the total market’s revenue opportunity available for the products or services, and following that, determine the total serviceable addressable market (SAM), which is the total market revenue opportunity for the company’s products or services specifically, determined by its potential buyers. A lot of that information nowadays can now be compiled by searching the internet or obtained through various government and export organization, and business chambers.

If the SAM is large enough to be attractive to the company, it will need to determine its approach to entering the international market. It will have to explore the possible channels it will utilize to reach its customers, which could mean going direct (with an actual local presence or only virtual / digital) or using local agents, distributors, retailers or resellers, OEM partners, representatives, … . This needs to be evaluated very carefully, as the impact of the decision is far reaching: costs for headcount, or sales & marketing can vary significantly depending on the selected approach, as can the return, and in some cases unwanted long-term liabilities could be created or have undesirable fiscal consequences. The company will also need to examine if its products or services are compliant with local legal requirements and regulations. These could, for example, relate to language requirements, to recycling & sustainability regulations regarding product and packaging, or to local useability & marketing legislation. The approach selected will ultimately determine the speed of expansion and the time it takes for the business to get a return on its expansion investment. This should be very well planned and budgeted for, for the company to benefit optimally from the international expansion.

Another often forgotten aspect of international growth is the setup and organization it requires at headquarters. Unless your organizational structure, systems and processes are set up to support the growth abroad, the business is likely to run into challenges and is at risk of sustaining significant reputational damage, which could also impact the home market reputation in the end. Make sure your support organization is ready to take calls from abroad, ensure your logistics are set up to handle international shipping and your finance team can deal with foreign payments and currencies. Although it all looks simple on paper, unless everyone is prepared, issues will arise. When you then put cultural aspects, local legislations, language barriers and time zone differences into the mix as well, confusion, misunderstandings and frustration can arise.

All this to say that going international with your business is not as easy as it might sound and requires thoughtful preparation and planning. However, when done right, when management plays its cards right, it opens an enormous opportunity for Canadian enterprises, large and small, to significantly broaden its customer base. Smart international expansion allows a business to scale its operations and accelerate its bottom-line growth, while reducing its risk by spreading it over more markets and reducing its dependency on a single larger market.

I2ACT Canada has extensive expertise in setting up global sales channels, with a specific focus on the European markets. We can actively assist your organization in planning and organizing your international expansion, finding international business partners and managing your global sales efforts. If you want to learn more about the international sales management services I2ACT Canada can offer and the solutions & skills it can bring to your organization, visit the website or contact Dirk Baerts.


Post: Blog2_Post
bottom of page