SMEs: Exporting without getting your fingers burned

How do you launch your company onto the international stage? Why initiate such an effort? Julie-Claude Gauthier, the Acclr – Business Services’ Head of International Market Development at the Chamber of Commerce of Metropolitan Montreal, shares her expertise. She discusses the challenges of exporting for Québec SMEs as the fourth edition of the SME Passport program gets going.

Chamber of Commerce of Metropolitan Montreal (CCMM) – What is the challenge of exporting for Québec companies?

Julie-Claude Gauthier (J-C.G.) – I can answer that in one sentence: developing a new international market is a bit like building a new business.

CCMM – Why?

J-C.G. – Because it all comes down to three principles that are fundamental to a project’s success:

1. Having financing

Anticipating costs is essential, because exporting your business doesn’t happen in one business trip to the target country. On the contrary, companies need to make many trips to meet partners and clients. There are also expenses for registering trademarks, getting permits and licences, and so forth. Basically, it’s a long-term investment.

In terms of financing, this means that the company’s own funds will be committed even if it has financial aid. There is no shortage of financial aid to support local SMEs, both at the federal and provincial levels, and entrepreneurs need to do a bit of research. There is assistance available from the federal CanExport initiative and the provincial Programme Exportation. Other players, such as Export Development Canada (EDC), can guide companies in their efforts, some according to the SME’s sector of activity. All of these resources are listed on the Acclr and Info entrepreneurs websites.

2. Conducting an in-depth market study

Let’s take the example of e-commerce. Companies that want to sell in 15 countries have to be aware of the local taxes and jurisdictions. And if the transactional website is in 15 languages, you need multilingual customer service. Is that realistic? You need to know your limits. Finding out about target markets is a prerequisite for a company’s internationalization (and, generally speaking, any business development).

There is plenty of documentation and services available: take advantage of them!

3. Finding local clients and partners and ensuring they are reliable

SMEs will meet a lot of people along the way making promises. This is particularly true for certain Asian markets and for the Persian Gulf. It is important to be prudent and check into the people you are dealing with. Find out about past contracts, their ability to deliver… The embassies and consulates are a solid source for looking into the reliability of potential clients and partners.

I would advise companies to persevere. Breaking into international markets is an opportunity that can take time before producing results.

“Developing a new international market is a bit like building a new business.”

CCMM – Is doing business internationally a springboard for an SME’s growth?

J-C.G – Yes, when exporting is successful. Remember, Québec’s population is only eight million. So the outlook for growth within the province may seem limited.

CCMM – How does the SME Passport program help these companies export?

J-C.G. – SME Passport is a program offered by the CCMM’s Acclr experts in international trade and by Québec International. It provides a comprehensive structure for training and support for 18 months, including a financial diagnosis by National Bank and an export evaluation; the expertise of international trade specialists; networking workshops; a trade mission in a country their efforts are targeting; and more.

Consult the program

The goal is to enable these SMEs to export after having structured their internationalization strategy.

The fourth edition of the program has just started, with 21 Québec businesses from every sector taking part (architecture, baby products, custom kitchen manufacturing…). Some of these companies have initiated international export efforts; others are already exporting products and services and want to diversify their export markets.

CCMM – Do you have expectations of this new cohort?

J-C.G. – Of course. I hope that the 15 winning SMEs from Western Québec, which our Acclr experts are working with,[1] commit 100% to their plan, taking advantage of all of our services’ resources, particularly our networks, both that of the Chamber and of the World Trade Centers Association, which has 322 licensees in 89 countries worldwide. This gives us access to many experts, both locally and internationally. If a company is looking for a tax expert, for example, in Brazil or Spain, we likely have a name and phone number to give them.

CCMM – Can you address the concerns SMEs may have with the election of Donald Trump and the prospect of renegotiating the NAFTA?

J-C.G. – There is no point in speculating as long as nothing has been renegotiated. The priority for businesses is to strengthen their ties with their American partners.

The 15 Western Québec winners of the SME Passport:

Ædifica   – Expertise in architecture, design, interior design, engineering and sustainable development

BBLuv Group   – Baby products

Cuisines Steam   – Design and manufacture of custom kitchens

Fin Finaud Consultant   – Management software for businesses of all sizes

Groupe AZUR   – Management software for businesses of all sizes

Hardy Filtration   – Integrated filtration solutions: air and water

Infynia   – IT consulting services and security solutions

Les Eaux Saint-Léger   – Production, bottling and distribution of water for the health care sector

Pépin   – Manufacture and distribution of paint for private or industrial use

PM Scada Cyber security   – Cybersecurity solutions for industrial control systems

Prevtec Microbia   – Design of organic products for preventing disease in animals intended for consumption

Sanuvox   – Ultraviolet air and surface treatment products for residential and commercial markets

Stroma   – Montréal-based clothing manufacturer and producer, in business for 35 years

TM Couture   – Manufacture of fabric for the mattress industry

Yourbarfactory   – Manufacture of nut- and peanut-free snack bars

These businesses were selected by a jury, based on their competitive advantage and that of their products or services, their financial resources and capacity and the commitment of their management team[2].

The SME Passport program is made possible through the support of the following partners: National Bank, Caisse de dépôt et placement du Québec, Canada Economic Development for Quebec Regions, the Ministère de l'Économie, de la Science et de l’Innovation and its Export Québec unit, and consulting partner Raymond Chabot Grant Thornton.

[1] The six other companies are working with Québec International.

[2] Excerpt from the press release:

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