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Despite a slowdown in Canada’s economy, exporting is still a priority for entrepreneurs. According to a recent survey by KPMG Enterprise, one half of Canadian firms will not alter their expansion plans, even with a shaky global economy.
“Regardless of the current economic climate, private Canadian companies still see opportunities for continued growth and revenue abroad,” says Beth Wilson, National Leader of KPMG Enterprise, “In fact, one-third of the companies we surveyed indicated they would continue to increase their expansion activity regardless of the downturn.”
Some 53% of the 200 CEOs polled say their decision to do business abroad was primarily influenced by the target country’s economy, while 47% say the decision was based on their firm’s internal growth plans. Other factors cited include the local economy (38%) and the overall Canadian economy (32%).
Still, not all Canadian business leaders are so bullish. One-fifth of respondents said they have curtailed their export ambitions, citing the value of the Canadian dollar relative to other currencies and challenges in selling to an ailing U.S. economy.
Even among export proponents there are challenges in raising revenue from foreign operations. One-half of those firms that export said less than 40% of their revenue came from non-Canadian operations, and 50% said they expect their overseas operations will grow by less than 20% in the next five years. Not surprisingly, dollar fluctuations and financial risk were among the top challenges.
Aside from the risks and challenges, there is clearly a strong rationale for continued growth abroad, says Wilson. “At one time, going global was seen as a competitive advantage for big companies. We are now seeing this trend emerge among privately held companies in order to maintain their continued growth and success”
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Pictured: Erna Collins, Orillia Works.