In the entrepreneurial world, the only limit you face is the number of opportunities you can juggle. And, given today's connected world, for most products and services you might offer, your customers can be almost anywhere. So, if that’s the case for you, and you're considering expanding your business, I recommend turning your attention north.
According to the U.S. Census Bureau, Canada is our No. 1 trading partner. That's no surprise: In Canada, your consumers have the same language, fairly similar tastes, habits and behaviors as we have, which makes it much easier to connect with that new market. You can also expect Canadians to already have a certain amount of familiarity with your brand.
As an example, consider Whole Foods Market. In 2002, the retailer expanded into Canada with one location in an upscale area of Toronto. Five years later, Whole Foods bought the parent company of the Vancouver-based supermarket Capers, paving the way for four Vancouver Whole Foods Market locations -- which doubled the company's reach in Canada. Today, the U.S.-based retailer has its sights set on other Canadian areas, including Calgary and Quebec.
Similarly, my storage company developed two properties in Calgary. As Whole Foods Market had done, we recognized the need to spend time in the expansion market to understand its nuances, and its differences from the U.S. market. Knowledge is power, right?
We didn’t want to assume we could just apply our U.S. model to this market, so we used our two locations to help us adapt to local habits, regulations and norms. These properties also helped us identify submarkets we could work into our plans for further growth.
Needless to say, the experience was a good one -- so much so that we ended up acquiring a self-storage business with a number of locations across Canada.
So why exactly should you too expand your startup into Canada? Here are five key reasons:
Barriers to entry can be numerous, especially when a market is mature and already has prominent players. But in other countries, that same market may not yet exist. And if it does, it may still be in its infancy. By expanding into Canada, you open up alternate sources of revenue for your startup, making you more resilient to changes in the domestic marketplace.
2. Financial growth
From 2003 to 2012, Canada led G-7 countries in economic growth. It also provides a market worth a combined gross domestic product of $38 trillion. So, expanding to Canada offers not only alternate sources of revenue, but also new and vital ones, which can help fuel the financial growth of your startup.
By tapping into the Canadian market, you have the opportunity to increase output with lower variable costs. This can have a positive impact on your profit margins. It can also help cut down production costs and make you more competitive in the U.S. market.
4. Product improvements
Consumers in other countries will purchase your products for different reasons than those in the United States do. They may also want to use your products for purposes never imagined by you and your team. This can provide you with insights that can help you either improve your products or introduce new products into the marketplace.
5. A competitive edge
Given time, international expansion will be the norm. And to remain competitive, you won’t have the option to do business just domestically. Expanding to Canada is a logical first step.
As long as you have a product or service that makes sense for a group of consumers, it doesn’t really matter where they’re located. You’ll experience challenges, of course. But you’ve already tackled the biggest challenge of them all: starting a business. So, weigh your options, and consider Canada for expansion.