OTTAWA -- There was never much doubt that Conematic Heating Systems Inc. had always wanted to become an exporter. The only question was which foreign market the Calgary-based company would target first.
Conematic, a four-year-old company that makes a compact heating and cooling system, has always done the vast majority of its business in Canada. But that's about to change beginning this fall, with a major push into the ultra-hot Chinese market.
Doug Smith, Conematic's president, said the decision to focus largely on the world's most populous country was made easier because there was demand for the product among Canadian home builders who were already exporting to China.
Despite the relative ease in choosing his company's growth path, Mr. Smith says he's learned that small and medium-sized exporters must proceed thoroughly -- and carefully.
"We got banged around a little bit," he says about the 20-person company's bid to export to the highly competitive Chinese market. "But we got to understand real competitiveness."
Conematic isn't alone in its early exporting experience.
Experts say many small and medium-sized companies that launch export drives for the first time fail because they make fundamental strategic errors. Companies must hone their export strategies and plans to the final detail -- not always a natural inclination for entrepreneurs -- and they need help from those who have been through it before.
And they also have to accept that exporting is not the same as doing business at home, says Becky Reuber, a professor of strategic management at the University of Toronto's Rotman School of Management.
Experts say there are certain principles that small and medium-sized businesses should follow when preparing for an expected export launch.
Know the market. Being familiar with the market and, especially, having business contacts in it are critical, experts say. Different places have different needs and tastes, and entrepreneurs should never assume that a successful product in one market will translate well somewhere else.
Find local partners. Whether you set up a new office, hire an agent, work with a partner, or simply piggyback on an existing operation, experts say it's very difficult to export successfully without enough feet on the street. "You need some presence," Ms. Reuber says.
Pick the right market. Despite the years of talk that Canada needs to diversify its export patterns, most Canadians target the U.S. market. But that doesn't mean the United States is right for everybody. Many immigrant Canadians have special knowledge -- and contacts -- about their country of origin and its demand, for example, so that may be a strong choice for them.
Line up financing. It's not just the extra money you'll need to expand, but you'll need knowledge of dealing with foreign exchange, currency fluctuations, and that market's rules about collecting unpaid bills.
Get help. The federal government, most provinces, and even some municipalities offer a wide range of services to help entrepreneurs export.
For Mr. Smith and the rest of Conematic, the path to exports has been long and difficult, but rewarding. It's meant four years, about 20 trips to China, and countless meetings with bureaucrats, possible partners and potential customers, but now the company is "coming out of the chute," he says.
Once Conematic is established in China, it plans to take on Australia and other parts of Asia, then parts of Europe, and then Chile.
"It takes lots of work and lots of money but I think the rewards are worth it," Mr. Smith says.
© The Globe and Mail
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