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INTERNATIONAL TRADE


Canada is an excellent entrance to the North American market


CASE STUDY: BLOC DIGITAL


Ever since leaving Rolls-Royce to set up his own digital visualisation services business in 2000, Keith Cox (pictured) hasn’t found it too difficult to find new clients. In fact, his old employer was one of


Bloc Digital’s first customers and he would later add blue-chips names like GSK, Shell and Jaguar Land Rover to his roster. Industry has flocked to take advantage


of the augmented and virtual reality tools it has created to make workplace training more realistic and interactive. “We had quite an accelerated expansion in the UK but most of it


there’s a lot of other things that you need to keep in mind. “What type of entity are you


going to select and how is that going to relate to the established business in the UK? And how is that going to affect tax considerations? “There’s tonnes of different ways


to handle recruitment. You might want to hire independent contractors based in the US or bring in staff from the UK – but all those choices determine which steps you will take.”


CANADA – THE ENTRY POINT INTO NORTH AMERICA While Canada’s economic significance to the UK may pale in comparison to the US – its GDP is relatively small at $1.71tn – it could be the ideal entry point for companies wanting to trade in North America. A member of the


Commonwealth, it shares a Queen with Britain and uses the same parliamentary system. It’s also a tolerant and far less politically divisive country, while it


only has ten provinces to contend with.


Andrew Penny calls its


“effectively half-British, half- American” and, importantly for exporters, a “very friendly and stable place to do business”. The president of Ottawa-based


business advisory group Kingsford Consulting, who is originally from Sutton-in-Ashfield, says: “Canada is a great place to use as a safe landing and to test the North American market. “Companies might want to try


selling to the five million people in the greater Toronto area, for example. Once they’ve built an expertise in Canada, then absolutely move into the US market.” Andrew believes there are three


key steps any business must take before selling into North America – research the market, find someone to do a deal with and then invest in growing a market presence. Addressing risk is also important,


as Andrew says: “How deep a hole can you dig and then bail out from? “What’s your risk tolerance? It’s like going into a casino and


was quite reactive and we haven’t gone looking for growth,” says director Keith. “We hadn’t even done any marketing for ten years and weren’t


actually thinking of going to the US until it snuck up behind us, but it was something we couldn’t ignore.” It was 2018 when Bloc made its first American deal worth about


$20,000. Steadily, the orders grew in frequency and value as his UK clients passed on referrals to their US divisions, and research showed they were mostly based in a fairly tight area in the north-east of the country. “We were kind of getting dragged on this journey but had


companies like Lockheed Martin and those in the space industry coming to us, so when we saw where they were based we decided to get some boots on the ground,” says Keith. “We hired someone who would be on US time to manage those


relationships, because it seems like such an obvious area for us to target and the opportunity is very large. We’re now looking at getting a branch in the US and going fully incorporated with a bank account there because with what we do, it’s easier to physically show how it works.”


knowing how much money you can gamble. “You also want to be cash-


positive. It’s going to take months of work to build your business and make contacts, so you should understand what impact this will have on cash flow.” Identifying the difference


between a company’s current business model and their market


entry model will also enable it to focus effectively. Andrew, who believes almost all


this preparatory work can be done remotely, adds: “You can’t come into a new market with your entire package – you need to think about which one product or service you’re going to come in with a laser-like focus and have a precise targeted offering.”


HOW CAN THE CHAMBER HELP YOU DO BUSINESS IN NORTH AMERICA?


“The Chamber can help you in producing certificates of origin for exports to North America, along with any attested documents you may require. If you do not know which documents you need for export, I would advise using a tool such as the UK Trade Tariff, or speaking with your customer. We also issue ATA Carnets, a ‘passport for goods’ that can be used for temporary exports to the US and Canada. If you are taking commercial samples, professional equipment or visiting an international trade show or exhibition, an ATA Carnet can be used to move those goods without the need for customs duty and VAT.”


Lucy Granger, international trade and customs adviser, East Midlands Chamber


For more information, visit www.emc-dnl.co.uk/enabling- international-trade/export-documentation-services/


business network August/September 2020 33


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