While companies that are most successful tend to follow the money, that shouldn’t be your only motivation. There are four main indicators your startup is ready to go global. Victoria Lennox, the president and co-founder of Startup Canada, shares her insights with EDC.
Small- and medium-sized businesses (SMEs) play a key role in Canada’s economy. In fact, most Canadian exporting companies have fewer than 100 employees while producing a quarter of the total value of all our exports abroad. If you’re an SME owner, you may be wondering if it’s time to diversify into the global marketplace—and for good reason. SMEs that go international are more likely to survive and scale because as Canadians, we hold a global advantage as the most connected G7 country with the greatest ease of doing business.
While companies that are most successful tend to follow the money, that shouldn’t be your only motivation. There are four main indicators your startup is ready to go global. If one or two of the indicators below apply to your business, you’re definitely headed in the right direction. But keep in mind, all four should be aligned to ensure a successful global strategy.
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4 indicators that your startup is ready to go global
1. You’ve developed a sound and scalable business model
It could be the right time to go global once you’ve been able to prove there’s a demand and a client base for your product or service. However, it’s essential to consider not just your potential for growth, but also your capacity to handle it in terms of manpower, infrastructure and having the right systems and processes in place. Will your team be able to keep delivering to your customers even as sales increase and operations expand? You don’t necessarily have to prove that your business model can be scaled, as long as you can demonstrate that a similar model from a competitor has been successful on the global stage.
2. The Canadian market is either insufficient or saturated
If you’ve already saturated the Canadian market, or interest in your product or service in Canada is waning, it may be time to expand beyond our borders. Start by researching to find new markets where your product or service is more relevant. Some companies go global from day one with an e-commerce operation, but they still need to map out the logistics—distributors, suppliers, business partners—in their business plan.
3. You have the right team in place
Hiring a qualified team when entering a global market is essential to your success. People both at home and on the ground abroad play a key role in developing and delivering your product to new customers, as well as marketing and developing your company brand abroad. Other duties include:
- forming global research and development partnerships;
- participating in global accelerator programs such as Startup Canada; and
- visiting your target markets to understand its unique customs, cultures, and client expectations.
Having a system in place for finding staff quickly and management to help oversee your operations is integral.
4. You’ve already immersed yourself in the exporting ecosystem
Canada boasts a rich ecosystem of resources to help entrepreneurs understand the risks and opportunities of building a global strategy. They include Startup Canada, Export Development Canada, the Trade Commissioner Service, and MaRS Discovery District.
One important program that helps startups prepare their business for global expansion is the Canadian Export Challenge, a global accelerator. Following last year’s successful pilot, the program scaled to even more cities in 2019 to support more than 1,500 entrepreneurs across the country in becoming export-ready.
Members of the 2019 Canadian Export Challenge cohort come from diverse backgrounds (27% are immigrants, 8% have disabilities and 58% are women) and seek assistance with challenges such as accessing growth financing, finding customers and protecting intellectual property. Some 13% of companies have no employees, while 38% have no sales.
They’re leveraging technology to reach clients across the world with their ideas as service providers in the knowledge-based economy, but they also represent industries ranging from medical technology and devices to consumer goods, education and biotechnology. Regional winners from the cohort compete head-to-head for up to $100,000 in seed money to take their business global and become part of the next generation of Team Canada.
This year was such a success that we hosted one more accelerator in Toronto on Oct. 23 during Small Business Week. The event was held in collaboration with our government and industry partners, EDC, the Trade Commissioner Service, and UPS.