How Exporting Can Benefit Companies Led by Women
Many women find entrepreneurship to be a natural fit in their busy life. Aside from the perks of setting your own hours and being your own boss, the parallels between running a household and leading a business are unmistakable. It’s no wonder more and more women are choosing self-employment, while enjoying great success at it! In fact, female entrepreneurs make up one of the fastest-growing segments of the Canadian economy, with more than one million women choosing to start their own companies.
At a certain point, you may feel that you are hitting a plateau in your business. You may be wondering if there are markets out there that you haven’t tapped yet or customers beyond your geographic boundaries who would be willing to pay for your services. Many of the female entrepreneurs we talk to at Export Development Canada (EDC) think that exporting is only for large, multi-million-dollar enterprises or companies that make and ship actual physical goods across the border. Rest assured, that is not the case!
International trade comes in all shapes and sizes. You can absolutely do business abroad as a small organization—even if you’re a staff of one. If you specialize in commercial services, exporting could present an especially red-hot opportunity—and you don’t even have to leave Canada to do it.
How Exporting Can Benefit Your Business:
If you choose to export, your company has a much higher chance of success. This creates a trickle-down effect that benefits the Canadian economy and all Canadians. Some of the advantages your business could enjoy are:
- Revenues that are, on average, 121% higher compared to companies that don’t export
- Faster growth
- Longer company lifespan
- Better connections within supply chains
- More resiliency during economic downturns
- A company that is more productive, competitive and innovative
How Services Can Be Traded Abroad:
There’s more than one way to export your services. Here are four:
1. Cross-border: This could include the movement of something like an online training course across our border and into another country, without involving the movement of any people.
2. Consumption abroad: Foreign tourists who come to Canada to use a service, such as people who visit Banff to ski, fall into this category.
3. Commercial presence: One example is a Canadian company that opens a branch in another country to provide services, such as a logistics company that has warehouses around the world.
4. Movement of people: An architect who travels overseas from Canada to oversee a project or provide a service in another country would be included in this category.
Areas of Opportunity:
In 2017 the proportion of service exporters was greater than goods exporters for the first time in Canada and we expect this budding trend to continue. Service exporting plays an essential role in Canada’s economy, creating jobs even during recession, and lending much-desired expertise to the rest of the world across many areas, including:
- financial services
- resource development
- software development
- product design
- scientific and technical consulting
- and many others
Many smaller Canadian small- and medium-sized enterprises (SMEs) are taking advantage of this demand; in fact, 56% of our service exports go to U.S. customers, while the rest go to every other corner of the globe. The opportunities for starting and leading high-growth businesses with global ambitions have never been more vast. More global supply chains, innovative technology and state-of-the-art distribution methods mean companies can be born global and that’s exactly the kind of trade culture we want to inspire here in Canada.
So what does all of this mean for Canadian women?
While the consumer services sector accounts for over half (54.4%) of early-stage female-led businesses, followed by business services at 28.2%, we know women business owners are, on average, less likely to engage in international trade than their male counterparts.
Obviously, we want to see these figures improve and to do whatever we can to support the growth of your businesses into competitive, world-class companies. It’s totally normal to have concerns about the challenges you could face going international. As women, we’re not so much risk-averse as we are in need of fully understanding the risks before choosing to take them on. Luckily, there are plenty of resources available to facilitate that learning process.
What You Need to Know:
Business is not a one-size-fits-all situation, so business models must be adapted to each individual market and culture. The top five challenges service exporters tend to face include:
- Identifying and connecting with potential customers
- Global economic conditions
- Political climate risks
- Finding skilled talent and dealing with rising business expenses
One trait that is essential for exporters to develop is cultural intelligence. It’s the ability to function effectively in different cultural contexts, from etiquette and meeting protocols to dress and appearance, and it could make or break your next business deal. In fact, if a trade deal is aligned on price and service, but fails to come to fruition, the failure can be attributed to a cultural misstep 80% of the time, according to a study by Harvard Business School.
Relationships are also key to exporting services. Part of fostering strong relationships means mastering the following:
- nuanced communications
- superior negotiating skills
- knowing when and how to follow up
This is a process that takes time but consider it an investment that will pay off in spades!
Making the decision to go global can be overwhelming. Luckily, you’re not alone. Here are some key resources to tap into:
- Export Development Canada: At EDC, we specialize in risk and we offer resources specifically for women entrepreneurs. We can help you mitigate risk in areas where women entrepreneurs tend to run into the most challenges, such as getting financing or gaining access to the right people. We have a wealth of free resources to:
- Give you knowledge and insight through international market intelligence reports
- Introduce you to the right networks and connections through our Connections Program
- Help you access financing and growth capital
- Women’s Business Enterprise National Council: Each year this U.S. organization hosts a national conference and business fair, the world’s largest gathering of corporate and government buyers, along with female business leaders from more than 18 countries.
- Business Women in International Trade is part of the Government of Canada’s Trade Commissioner Service and offers Canadian women-owned businesses the following types of opportunities:
- Women-only trade missions, including the WBENC’s national conference and business fair
- Funding and financing through CanExport
- Exporting advice and support through the Step-by-Step Guide to Exporting
- International contacts and opportunities through the Women’s Enterprise Organizations of Canada
- The Business Development Bank of Canada has a number of programs to help women get the financing they need to scale their businesses.
- The Women’s Enterprise Organization of Canada also has links to other national and local organizations for businesswomen.
Written by Jennifer Cooke, Corporate Lead of Women’s Business Strategy for Export Development Canada