Exporting was not part of the plan when Nicole Porterfield and Kim Good took over Farm Fresh Pet Foods in Edmonton.
“Our initial goal was to sell across Canada through independent pet supply stores and small chains,” Porterfield says. “But the market in Canada was only so big.”
So four years ago, they pitched their product to a subscription box company in the United States. When they got the green light, however, the co-owners soon learned that securing cross-border customers is a lot easier than landing an export permit to sell to them.
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“We spent a year figuring out who the right person was to talk to. Then we had to get that right person on the right day in the right mood,” Porterfield says. “Kim and I started to wonder if this was their elimination process to see how many would give up.”
Still, they persevered. And in 2016, they started building stateside logistics and distribution partnerships.
Today, five per cent of Farm Fresh Pet Foods are sold in the U.S. Porterfield estimates that will grow to 30 per cent within the year, as they sign on distributors in additional regions.
But while the potential of international expansion is clear — in a recent poll by the Royal Bank of Canada, 77 per cent of business owners of all sizes said that global trade has increased their revenues — so are the barriers for entrepreneurs.
In a survey of its 4,200 members, the Canadian Federation of Independent Small Business found that only about 25 per cent exported products and services. Reported barriers included lack of resources and expertise, lack of information on trade opportunities and lack of appropriate financing.
There were significant challenges reported by those who do engage in exports as well, among them: the costs of shipping, duties and taxes, export rules and regulations, currency fluctuations and global uncertainty.
For all that, says Pierre Cléroux, vice-president, research and chief economist at the Business Development Bank of Canada, there are strong arguments for pursuing exports. “Statistically, businesses who export perform better than other businesses in terms of revenue and profit growth,” he says.
The problem, says Monique Moreau, vice-president of national affairs for CFIB, is that most entrepreneurs don’t know about the supports available to them — and feel that organizations like Export Development Canada and the Trade Commissioner Service are only interested in big enterprises.
“The reality is, both have developed resources over the years to encourage small businesses to export,” she says. “If you invest the time and energy into peeling back the layers of the onion and finding where the resources are, there are promising opportunities.”
In May, for example, both EDC and TCS are participating in a program called the “Canadian Export Challenge.” Organized by Startup Canada, it offers entrepreneurs the chance to apply for a cohort of like-minded businesses, which are then connected to potential partners, updated on trade missions and market intelligence. The organization also hosts a one-day global “accelerator” for intensive networking and invites member companies to compete for $25,000 and $100,000 of in-kind support to go global.
“It’s an opportunity for accepted businesses to accelerate access to markets, mentors, customers, and capital,” says organization president Victoria Lennox.
The rise of the digital economy helps any business looking for international momentum, though, says Lennox. “Selling online allows business to expand their markets so quickly.”
Andrew Dale would agree. The founder of LeDaveed, which produces luxury leather bags, he’s had his eye on international sales from the day he launched in July of 2016. “Leather bags are a $50 billion market worldwide,” he says. “It’s a huge, huge market driven by Asia and the U.S.”
And indeed, with the help of a fashion magazine feature in 2017, revenues from exports jumped from 10- to 60-per-cent. “We doubled our business when we went international,” he says. “Without that access we wouldn’t have a business.”