Just how the globetrotters got into foreign markets likewise elicited a variety of responses. While some deliberately targeted, researched and made inroads into particular markets, firms more often did so via acquisitions or serendipitous routes ranging from a meeting at a trade show to an employee’s personal contacts and language skills, or a chance sale over the Internet.
The advice volunteered for companies contemplating a move overseas tended toward caution, market knowledge, decorum and patience, but also aggressive salesmanship or at least persistence. Several recommended cloaking one’s enterprise in the Canadian flag, which, they said, sells well in the countries where they operate. Suggested another: “Act first; ask for permission later.” Still other tips were practical in nature, such as insuring your receivables and hiring immigrant staff in Canada.
The things companies felt they needed to expand their global presence ran the gamut from marketing to financial wherewithal to government facilitation and tax incentives.
The survey sample represented a broad cross-section of business in Canada, with proportional representation from every region, industry and size of enterprise. Around half of the companies had annual revenues greater than $20 million and more than 100 employees. Approximately four out of five that answered the questions were headquartered and owned in Canada. The individual respondents were all decision makers within the companies, involved in either business development or choosing suppliers, or both. Collectively, the companies generated 80.9 per cent of their revenues in Canada, 11.8 per cent in the United States. No other single country represented even one per cent of sales, which would seem to underline the uptapped potential of a more global strategy.
Ivey’s Beamish has heard all the excuses for why companies stay home. When the dollar is high compared with other currencies, as it is today, they say they can’t compete. But that makes it a great time to buy assets or companies in the U.S. or Europe, he says. “It’s like a 20 per cent off sale for Canadian companies.” The biggest barrier is really one of attitude, he adds. Certain corporations embody a kind of broad-minded entrepreneurism; their behaviour can be described as “geocentric.”
What the Business without Borders survey failed to illuminate, Beamish says, is why the importers and exporters stayed engaged with foreign markets regardless of the obstacles. He has an inkling after 30 years of study, though: they still managed to make money there. Doing business domestically has a long list of obstacles, too, ones that virtually all the respondents had managed to overcome, he points out.
“If you’ve built a mousetrap that sells well in a competitive country like Canada, imagine how it could do in others,” he says.
Rock Oil Synergies of Camrose, Alta., is in the midst of testing that proposition. Rock Oil suffered along with other oil field services firms from the downturn in drilling in its home province in recent years. The company has spent the past six months investigating expansion into the Middle East where, president and CEO Derek Woods explains, “what we do hasn’t been adopted yet.” A reseller of technologies to maximize oil-well output, Rock Oil recently partnered with a company in Syria where, due to political restrictions, there is virtually no competition from American firms.
Advising Rock Oil on the venture is Clark Grue, who heads up Rainmaker Global Business Development in Calgary. Grue has a more urgent reason for Canadian companies to go global. Even if you’re happy with your business in Canada, “other countries and companies will knock on Canada’s door.” He uses hockey, something any red-blooded Canadian can understand, as an analogy: “Do you want to play defence or offence? You can defend your turf at home or you can go on the offensive.”
Razor Suleman, one of three entrepreneurs who took part in the Business without Borders round table, feels the country could benefit from a change in attitude. The 36-year-old founder of I Love Rewards, a Toronto-based developer of employee recognition programs for corporations, experienced just such a head shake upon receiving backing from John Albright, managing director of JLA Ventures, in 2007. Suleman had said at the time he hoped for I Love Rewards to lead in its niche in North America, but Albright corrected him. “I’m not investing in I Love Rewards to be a North American company,” Suleman recalls the venture capitalist saying. It had to be global.
Today, I Love Rewards has programs running in Mexico, Egypt and parts of Europe, and to his surprise Suleman has found sales in other countries, especially the U.S., easier than in Canada.
“People make decisions with less information, with a higher risk tolerance, and with more urgency,” he says, warming to the subject. “If you have a successful Canadian business, somebody needs to tell you that you can have a successful North American business, and ultimately a successful global business. And I want to be that person.”
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