In this exclusive Urban Times series, Business Lessons from an Entrepreneur, serial business owner and Entrepreneur in Residence at the British Library, Stephen Fear, examines a different theme each week of 2013 to give the reader useful and usable lessons for enhancing and growing their own business.
Trade between nations is one of the most important aspects of the world economy and affects pretty much everyone wherever they live. Whether you are an automobile worker from the UK or a Russian oligarch your life will undoubtedly be affected by trade between nations.
Much is made of the special relationship between the UK and the US, but for me an even more special relationship exists between the UK and Canada. Canada has much in common with the UK and yet is often ignored by businesses wishing to export, or just as importantly, import, products or services for sale. With a constitution more similar to the UK than other export targets like Brazil, China, Russia or even the US, Canada represents a serious opportunity for UK exporters and importers alike.
Canada has a population of just over 35 million with over 2.5 million living in Toronto which, when compared to around 1 million living in Birmingham, England, gives a good indication of the potential. Good road, rail and air infrastructure, combined with having a political system similar to the UK; with a Prime Minister, House of Commons and Leader of Her Majesty’s Loyal Opposition, combined with the fact that it remains a constitutional monarchy, with Queen Elizabeth 11 as its head of state, makes it easy to see why I put it right at the top of my list of export/import and potential trade partners.
The Bank of England appointed Canadian Mark Carny as its new Governor which will further strengthen our links with this major commonwealth nation. Saskatchewan, which is centrally located in Canada and has a population about the size of Nottingham, has an unemployment rate of only 4.3% compared with about 10% for the famous east midlands city. The UK as a whole has an unemployment rate of 7.8% compared with the slightly more optimistic 7.1% for Canada.
Clearly Canada has a long history of trade with the US and indeed they share the world’s longest land border but the association between the UK and Canada gets stronger by the day. In September 2012, Canada and the UK signed a Memorandum of Understanding on diplomatic cooperation, which promotes the co-location of embassies, the joint provision of consular services, and common crisis response, which again shows the very special relationship that continues to thrive between these two nations.
So what products or services do you need to be selling to prosper from this extraordinary link between two of the safest and most prosperous nations on earth? Canada produces many items and has rich mineral resources much coveted by the rest of the World, especially China. Products such as canoes, kayaks and boats, clothing, BBQs and camping equipment are all produced in Canada to a very high quality. They are many opportunities for UK importers to strike deals with Canadian manufactures of these products; it’s worth having a look at www.canadianmade.com for more information and research.
My tip is to concentrate on smaller manufacturers who may not have representation in the target country. Most small to medium size enterprises, or SMEs, do not have the resources or time to take advantage of overseas markets, and will welcome an approach from someone based in an overseas territory willing to sell their products into the market there. If you are not already exporting or importing then now is a good time to start because, like it or not, we live in a global economy and international trade has never been more important.
Understanding frequently used terms is an important part of making the most of overseas trade and convincing suppliers that you know what you’re talking about. Become familiar with the meaning of FOB, or “Free on Board” which effectively means, the cost of delivery and loading on board the ship are borne by the exporter: insurance and freight are for the importers account. FAS, or Free Alongside Ship, is similar but in this case the importer pays for loading.
There are many terms used within international trade and if you intend on entering this lucrative field then it is vital you understand them all. With this in mind, my book review for March 2013, which will be video recorded at The British Library in London, will focus on this subject and can be seen during March by going to www.feargroup.com and clicking the news section.
As previously mentioned, the UK and Canada have a very special relationship but for any business seriously wishing to grow my advice though is to tread carefully and educate yourself properly before taking any financial risk in overseas markets.
Exporting to countries that share a language similar to your own is clearly easier and less risky because even if you learn another language it can take years to understand nuances that exist. Where money is concerned my motto is always to tread very carefully indeed.