Monday, December 19, 2016

Now is the time to export to the USA

This post brought to you by HSBC Bank Canada. The content and opinions expressed below are that of Canadian Entrepreneur.

As economic growth lags in Canada, businesses are increasingly being urged to export their goods and services. Simply put, Canadians have special access to major markets such as the U.S. and Europe. Companies that don't take advantage of these special trade relationships are leaving money on the table – and possibly even risking their futures by clinging to a slow-growth economy.

But trading across borders isn’t easy. You need new capabilities and contacts to make the most out of these opportunities. The good news is that once you master these tools and relationships, you’ll be miles ahead of your stay-at-home competition – and ready to take on the world.

At a seminar in Toronto in November, HSBC assembled its top trade experts to meet with entrepreneurs and business executives to explore the opportunities and challenges of selling to the U.S.

Why head stateside? HSBC’s chief U.S. economist, Kevin Logan, foresees strong growth for the U.S. economy, stemming from low unemployment, a robust energy sector (which, unlike Canada’s, can make good returns on prices of US$60 per barrel), and the prospects of higher infrastructure spending promised.

To take advantage of U.S. growth, exporters will have to be innovative, responsive, and aggressive, according to HSBC’s chief Canadian economist, David Watt. He noted that being just two days’ drive from most markets means Canadians can serve U.S. clients faster and more efficiently than competitors in Europe or Asia. “Speed to market” can be a Canadian brand.

To help you hone that advantage, here are a few export tips from HSBC’s trade experts:

  • Make sure you develop the right business relationships. Successful exporter need talented advisors to help them understand local market conditions and master the required banking, legal, and tax issues.

  • The U.S. is a huge market, with significant regional and local variation, so you also need to have the right distributors and sales agents on the ground. Cate Luzio, HSBC’s New York-based executive vice-president, said many foreign companies come to the U.S. expecting they can tackle the whole country at once.

  • Start with your own relationships and work out from there. Ask your banker, lawyers and accountant about best practices and required resources in the markets you're eyeing. And leverage your contacts in other industries, too – they may have ideas that will give you an advantage in your niche.

  • Financing your U.S. activities can get very complicated, so leverage your domestic resources as much as possible. As one HSBC banker noted, you can borrow against your Canadian assets to fund expansion in the U.S. That should get you a bigger loan and better rate than going to a U.S. bank, which will likely treat you as a stranger with no track record.

  • Be patient. As one business owner in the audience advised: “Establishing a U.S. presence is going to take longer than you think.”

  • All the same, be ready in case you're an overnight success. “Often customers trip up because they take on too much business early on,” one banker warned. “It’s a big market. So watch what you wish for.”

  • Planning to do business in the US? Watch this free Webinar replay here for additional tips and insights.

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