Often times, gaining access to new clients and partners comes down to expanding your market reach. Exporting products or services to foreign countries and establishing international partnerships could have profound benefits for your organization, but it also brings a degree of risk that must be overcome. Luckily, Canadian government grants are available to help businesses reduce the cost, and therefore risk, of market expansion projects.

There are several ways that Canadian businesses can tap into international markets, and the federal/provincial governments extend support for many of these activities. Whether your business is planning to begin exporting, or you’re an established exporter who is evaluating new markets, small business grants can accelerate market penetration and reduce the amount of time it takes to gain the profits.

Why access government grants to perform export expansion?

Successful expansion into new or existing markets relies on two factors: the strategy behind your expansion, and proper financing to confidently implement the plan. When both of these conditions are met, companies stand a good chance of seeing their project succeed.

The problem is that many companies underestimate the cost of export expansion projects, including the costs to travel to and from the market, participate in trade shows, generate marketing materials, adapt products to conform to new regulations, and find partners to help gain market share.

While a strategy may be good in theory, without access to financing, it’s impossible to actually achieve its goals. That’s why government grants can be an essential link to export success for many businesses.

If you have the right strategy and plan for export success, the government will reimburse a large portion of the expenses, therefore removing the burden of expansion and reducing the risks.

Companies should consider applying for government grants to implement any of the 3 following market entry strategies:

1. Participating in trade shows;
2. Establishing a foreign partner to commercialize the market; and
3. Training Canadian employees to identify and respond to the needs of international customers.

Finance your trade show participation in new international markets

Canadian government funding is available to support a wide range of projects related to expanding market reach. This includes the CanExport and the Going Global Innovation (GGI) programs.

A popular choice for those businesses who are evaluating their potential abroad, trade shows provide unparalleled access to consumers and strategic partners across the world. Companies can participate in trade shows themed around a specific product or service, and access industry trade shows to broaden this audience.

While not as big of an issue for medium and large companies, trade show participation can be quite costly for small businesses. Purchasing booth space and trade show passes for employees, developing booth marketing materials, and traveling costs are all expenses that may ultimately prevent businesses from participating. Thankfully, these are also expenses that can be offset by Canadian government grants.

Small and mid-sized businesses (SMEs) may receive up to 50% of eligible project expenses to reduce new market development costs with CanExport.

CanExport grants provide contributions ranging from $10,000-$99,999 to explore the viability of a new country they haven’t sold goods to in the past 24 months. This program is particularly beneficial if your business is considering expansion to markets within Europe or Asia.

Establish strategic partners to commercialize innovations

The fastest path to growth for most companies is to expand the number of customers they reach. But in order to be introduced to as many international customers as possible, it often makes sense to partner with organizations who are already fully integrated into the market.

Working with others to establish market share supports accelerated success, with less time and money needed.

Developing international partnerships can be tricky. Securing commitment from an international partner often requires travel, lodging, meals, and meeting expenses, all of which need to be incurred prior to the partnership’s solidification. This implies risk; there’s a chance that businesses can go through all of these steps and still not come away with a profitable partnership.

If your business could profit from the international commercialization of technologies, the Going Global Innovation program may cover up to 75% of eligible expenses.

Going Global Innovation grants will provide up to $75,000 towards several costs required for international travel and meetings. Companies can’t apply for research funding for current partnerships. The funding is meant to help potential collaborators meet and secure the partnership agreement through 3-4 international meetings.

Train Canadian workers to better serve international clients

Government grants are also available to support your company’s operational abilities. This is made possible through the Canada Job Grant, an initiative that reduces third-party training expenses incurred for their Canadian-based employees.

Although new market expansion is an exciting endeavour, growth opportunities may exist within export markets where you already sell. Maintaining a workforce who can communicate effectively with customers will help to exploit some of these opportunities, such as upselling or developing new highly-demanded products.

Unfortunately, third-party training can be costly when implemented across a team or business as a whole. Hiring a trainer to conduct specific courses, paying for tuition, and then affording materials can be too expensive for some firms, especially when the financial return on their training is unknown.

If your business is conducting third-party training for Canadian employees, up to 66% of costs may be recovered through Canada Job Grant funding.

The Canada Job Grant offers up to $10,000 per employee trained and will offset most costs related to the trainer and training program delivery. This training could benefit Canadian employees by helping them learn about international marketing, finance, supply chain management, and other international trade management specializations.

Develop a market expansion plan that includes government grants

The availability of specific government funding programs is largely based on a business’s location and the time of year they’re applying. Understanding the unique requirements of each program is critical to your application’s success, so it’s important to research these programs and apply for those that best fit your upcoming projects.

If you would like to confirm your business’s eligibility for any of the programs mentioned through this blog, please contact Mentor Works.

Every day, our team of Government Funding Planners work with Canadian businesses to solidify project plans and communicate deliverables to the government through application writing, submission, and reporting services.

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Without the right skills, planning, documentation, international connections and financial resources, exporting can seem like a daunting task for small and medium sized companies (SMEs). Operating with smaller budgets and staffs, they must consider everything, from market research and logistics, to finding buyers and getting paid before entering any new market. Their smaller size also gives them less room for error, underlining the importance of early and sustained success in global markets.

Are you taking full advantage of market research and trade shows?

Even the early stages of preparing to export can present significant hurdles. Market research is an essential component to any market entry strategy, enabling companies to find the best markets for their products, maximize their competitive advantages, and prepare for any potential issues.

Without specialized staff who have training in performing such research, companies face a difficult choice. Is it best to pay experienced researchers to assist with their efforts, or ask inexperienced members of their own staff to add to their workload and take on further responsibility?

Either choice represents a risk for smaller companies.

Trade shows and trade missions are another helpful step in preparing for new markets. They offer companies the chance to showcase their goods and services, meet new partners or clients, and assess the competition firsthand. Such events often require extensive preparation, travel, and extra costs to transport sample goods, displays, etc.

Despite the extensive benefits of participation, many companies struggle to add these events to their overall marketing approach because the cost, in terms of time and money, may be prohibitive due to their smaller size and budget.

What’s the next step for companies with big dreams and smaller resources?

Despite the myriad of obstacles to going global, many companies still engage in exporting because of the long list of benefits in doing so, including increased sales and profits, wider customer bases, diversification of risks, and improved market shares. In 2014, for example, Michigan exported $3.18 billion in food and agricultural products alone.

So how do companies go from point A, deciding to export, to point B, actually becoming successful at exporting?

Navigating the world of international trade can be a lot of work for a company to take on by themselves. However, companies do not have to attempt to export alone. The International Marketing Program at the Michigan Department of Agriculture and Rural Development (MDARD), for example, was created to help Michigan-based food and agricultural companies export their products globally.

The International Marketing Program has a number of programs and services aimed at assisting companies with exporting. To begin the exporting process, the program provides companies with informational export resources, including webinars and seminars. It also helps companies determine top markets for their products by offering market research.

Assisting Michigan SMEs to build connections and engage new markets worldwide

In addition, the program provides activities that connect Michigan suppliers with international buyers through Michigan Pavilions at international and domestic trade shows, trade missions, and buyer missions. These connections bring qualified international buyers to the U.S. to meet with Michigan companies. These events give companies the opportunity to make lasting connections with buyers from all areas of the world.

Companies can also apply for the Branded Program, which reimburses companies for up to 50% of their international marketing costs. This program allows companies to engage more directly with markets around the world. After companies establish connections with buyers and begin exporting, the International Marketing Program continues to help companies with understanding and organizing export documents, logistics, and other details involved in global trade.

Companies interested in exporting or in expanding their exports are encouraged to contact the International Marketing Program Manager, Jamie Zmitko-Somers at zmitkoj@michigan.gov or 517-284-5738.

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There is more pressure on businesses to be innovative than ever before.

From technology adoption to process improvements, companies who invest in research and development projects are able to become more productive, and ultimately, more competitive on a global scale.

There are two broad options that businesses have when it comes to facilitating product or process R&D:

1. Complete the project in-house, using internal labour; or
2. Collaborate on the project with a partner using shared resources.

Given the benefits that come with collaboration, it’s amazing that many organizations choose the first option every time they have a technical or technological challenge.

Although it’s a more traditional option and may seem like a more direct way of coming up with a solution, collaborating will consistently provide better results.

Businesses use collaboration internally to solve problems more effectively. Why can’t this method of teamwork be leveraged from one business to another? There are a variety of benefits that research collaborations can have, including the following three:

1. Shared knowledge

Small and mid-size enterprises (SMEs) are rarely limited in their ability to conceptualize solutions to problems. In fact, small businesses are often the greatest source of innovation. However, their inability to commercialize solutions from start to finish can prevent good ideas from seeing the light of day.

Research and development collaborations are essential for SMEs because partner organizations can help fill knowledge gaps within your own team. Companies can share ideas, research, and a variety of skillsets to ensure that the innovation is commercialized.

2. Shared workload

Although performing R&D is essential for many businesses, it can be demanding on human resources. Large-scale research projects may require a greater portion of your team, which could affect capacity towards ongoing responsibilities or other projects. The sheer amount of work that is required may prevent some companies from performing innovative projects altogether.

Collaborative research teams that effectively use the workforce of two or more organizations significantly decrease the amount of work that is required, without compromising results. At the end of the project, your company will have an innovative solution with fewer resources required.

3. Critical analysis

Depending on the size and group dynamic within your organization, biases may exist that ultimately affect the project’s outcome. Groupthink is common within SMEs; without testing all possibilities, ideas may fail or not deliver the most amount of value possible. Critical review of all assumptions and methodologies will help to avoid this, however it can sometimes be difficult to achieve.

Working together with another organization ensures that all ideas are reviewed critically to identify potential weaknesses. If any flaws are found, ideas can be discussed and changed to strengthen the solution and develop a more valuable project.

Funding opportunities are available to fuel your innovation

Furthermore, the federal government is making a number of investments to encourage greater innovation within the economy. Lucrative government funding programs exist for businesses who are collaborating with international partners. Some of the most valuable collaborative partnership grants available now include:

Canadian International Innovation Program (CIIP)

Created to foster collaborative research and development partnerships, the Canadian International Innovation Program helps businesses find a qualified international research partner and supplies grants to offset up to 50% of project expenses.

Collaborations may receive up to $600,000 for R&D projects that involve at least one Canadian company and one research partner from Brazil, China, India, Israel, or South Korea.

CIIP grants are meant to support three types of projects, including:

• Technology adaptation: Modifying or improving existing technology to meet the requirements of a new market.
• Technology validation: Verification that the innovation’s functionality, performance, quality, or usability meets the needs of end-users.
• Technology co-development: Continued development and integration of technologies to create an innovative breakthrough.

Learn more about the Canadian International Innovation Program (CIIP).

Going Global Innovation (GGI)

The Going Global Innovation (GGI) program enables business leaders to travel to foreign markets and meet with potential partners, ultimately resulting in a collaboration agreement. Government grants are specifically targeted towards SMEs to reduce the impact of their cash flow and speed up the time to product commercialization.

Going Global Innovation export grants provide up to 75% of a business’ travel and administrative expenses to a maximum $75,000.

It’s important to note that this funding program cannot be used for partnerships that are already formed. Businesses must show that there is intent to discuss a collaboration, and that the partnership requires a trip to the foreign market.

Learn more about the Going Global Innovation (GGI) program.

Benefits of accessing Canadian government funding for international collaborations

Accessing additional project funding through government grants is just one benefit of engaging in the aforementioned programs. In many cases, there are also many more, such as:

• Commercializing innovations and bringing them to market faster;
• Reducing the risk of research projects;
• Reducing market entry barriers; and
• Providing matchmaking with knowledgeable, reliable partners.

To learn if your business is eligible for these Canadian government collaborative partnership grants, please contact Mentor Works, the Government Funding Planners.

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Exports are now being hailed as the primary way for Canadian companies to increase profits, develop strong brand reputations, grow their capacity for innovation, and decrease their risk.

Exports are also forecasted to be the primary catalyst for economic growth in Canada for 2016 and 2017.

Most people, if asked to list companies who export, will list major corporations thousands of employees and billions of dollars at their disposal to facilitate their entry into new markets.

These businesses, however, form only a small portion of Canadian commerce: 99% of businesses across Canada are small to medium-sized enterprises (SMEs).

What may be even more surprising is that Statistics Canada reveals there are well over a million businesses across Canada, and yet only about 40,000 of them are currently direct exporters.

What’s holding them back from taking this chance to export their products or services to a new country and grow their business?

With more limited resources and manpower, SMEs who want to go global sometimes face greater obstacles than major corporations.

So how can SMEs, who form the backbone of the Canadian economy, take advantage of the same international opportunities as their larger counterparts?

Introducing the CanExport Program

To offer financial assistance to overcome these obstacles and succeed in the global marketplace, Global Affairs Canada has introduced the CanExport program.

Providing up to $50 million over the next five years, the program is intended to help Canadian SMEs with revenues between $200,000 and $50 million and with between 1-250 full-time employees. The funding is designed to help with the eligible expenses related to developing a strategic plan to enter a new market.

These expenses include activities such as market research, travel to target markets to meet with potential clients and partners, participation in trade missions and trade shows, translation, legal fees, and adapting marketing tools for a new market.

The program will provide funding contributions ranging from $10,000 to $99,999.

Companies in any industry are eligible to apply, with the exception of the agriculture, food and beverage, fish and seafood and wine, beer and spirit sectors, as they are funded separately through Agriculture and Agri-Food Canada’s AgriMarketing Program.

A contribution will only cover expansion to one country at a time. However, funding will cover expansion into any market, as long as it constitutes a new export destination for the applicant, and that the project is aligned with applicable Canadian trade and economic sanctions in place.

Elise Racicot, the CanExport program manager for Global Affairs Canada, emphasizes that companies can reap major benefits from the program and that it can play a big part of an SME’s export strategy.

“SMEs should apply to CanExport, and more generally make sure to use the Trade Commissioner Service, to support their export development activities.”

This program, which is part of Canada’s trade strategy, enables small businesses in Canada to explore new opportunities, giving them a leg up in competitive and potentially lucrative new markets.

For more details on the program, please visit the Applicant Guide  or the Frequently Asked Questions page.

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