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4 Things to Consider before Expanding into Canada

Posted by Karen McMullen


Sep 5, 2018 9:00:00 AM

4_Things_to_Consider_before_Expanding_into_CanadaExpanding a business internationally is a huge step for most business owners and managers. It requires careful thought, research, and evaluation of the opportunities at hand. Expansion is, of course, a good thing since it means your business is growing. Done correctly, it can increase company value and revenue.

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Should you expand into Canada?

Many company owners ask themselves this question, and they need to carefully consider factors such as taxation, business structure, market demand, political climate, legislation, and more. In many cases, the answer will be yes. Before you make a move to expand into Canada, however, be sure you’ve given the move careful consideration, including these four factors.

1. Legislation Will Affect Your Efforts of Expanding into Canada

The first thing any business owner needs to consider is the current political climate and legislation surrounding expansions. As an example, while Canada and the United States have long been major trade partners, the current political climate suggests the future relationship might be rocky.

American firms will want to be on the lookout for legislative changes designed to limit their entry and participation in the Canadian market. On the other hand, companies from other countries may find a more welcoming atmosphere.

No matter where your home base is, however, you’ll need to look at the legislation surrounding expansion into Canada.

2. Consider Market Demand before Expansion

Another thing you’ll want to consider before you begin expanding into Canada is market demand. Do some research and discover whether or not Canadians are looking for your product or service. Is there a gap in the market you can fill?

If the market is already crowded or demand appears to be absent, it may not be the right time to expand into Canada. While you can raise brand awareness and create demand where there was none, it creates an uphill climb for the business. If a market already exists for your products or services, you’re one step ahead of the game. Expanding into Canada makes sense.

3. Taxation and Business Structure Will Play a Role

If you’re deciding whether expanding into Canada makes sense for your firm, you’ll need to consider the financial picture. Keep in mind factors such as taxation and business structure will play a role in making your Canadian expansion profitable.

Different business structures have different tax implications for Canadian companies, and your expansion will be subject to many of the same rules. Examine the different structure options and see what advantages or disadvantages they offer you. One may make more sense than another.

4. Logistics

Before expanding into Canada, you’ll also need to consider the logistics of operations after expansion. How will you get your product into Canada and then onto shelves in Canadian stores? How will you offer services to your customers?

Supply chains and other logistical considerations can make or break a company as it expands into Canada.

Another consideration is your human resources operations. How will you find the right people to staff your new Canadian locations and offer service to your Canadian customers? Who will conduct bookkeeping, administer your benefits, or complete payroll activities?

You’ll need to give these factors some consideration, as they can affect how your business operates in Canada.

Should You Expand to Canada?

The question remains: Should you expand into Canada? As demonstrated, there are a variety of factors you’ll need to consider before you can definitively answer this question.

For many companies, expanding into Canada will be the right answer. For others, it may be prudent to bide their time. The right opportunity will arise.

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Topics: Business Expansion

Karen McMullen

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