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Expanding your business beyond Alberta

By ATB Financial 25 June 2020 7 min read

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If you’ve managed to secure a steady and growing business at home in Alberta, the next logical step might be to expand your boundaries. Whether that’s to another city, province or country, it’s tempting to think that whatever worked in Alberta would work everywhere.

But that’s not always the case. Before you make that leap, there’s a tremendous amount of planning needed to ensure your growth spurt is a successful one — and not a series of growing pains.

Whether you’re a producer, retailer or distributor that’s been able to capture a decent-sized slice of the Alberta market already, the first thing you need to ask yourself is: Am I ready to take on the next level of growth? With more demand, do you have your supply chain set up to fulfill it? Have you sorted out your distribution processes for other territories, especially if things go pear-shaped?

Aimee Parker, an entrepreneur strategist at ATB Financial, has helped many businesses take on that next level of growth. Her top piece of advice: make sure your own house is in order before you take your show on the road.

“Something entrepreneurs forget is that the model that’s currently working for them might need to be adapted,” she says. “Whether that’s new consumer preferences, new regulatory impacts or new supply chain networks.” For every new sales market an entrepreneur wants to enter, they need to rewrite their business plan to not only adapt to new realities abroad, but also how it will interact with their current operations.

 

Partnering up

Let’s say you’re based in Alberta and want to start selling in British Columbia or Saskatchewan. First you need to decide whether you’ll go directly to consumers in those areas, or through an established regional intermediary to help that process.

Partnering can be a very effective way to reach new markets, Parker says, because past success is often an indicator of future success. When looking for partners, there are a few considerations to have in mind: Who else have they partnered with that’s similar to your business? And how effective has that partnership been in terms of sales and branding?

One Albertan success story to consider is ATB client Confetti Sweets. The popular cookie bakery began as a home kitchen-based operation in 2009, and has since increased its output massively since moving to bricks-and-mortar stores across the province, and placing its products in chains like Sobeys and Safeway.

While its growth has been impressive, the company’s partnership with Press’d Sandwich Shop in 2019 meant inching across the border to the shop’s locations in Saskatchewan as well. Now the bakery is eyeing nationwide expansion thanks to its newly expanded facilities.

That kind of ambition is only possible if the fundamentals are sorted out. It’s one thing to look at your potential forecasts, but do you have the ability and capital in your supply chain right now to accommodate that future growth? If not, you may have to figure out backup procurement processes or suppliers to help shoulder the burden.

“Your reputation for your retailer is on your ability to supply to them,” Parker says. “So if you’re not able to meet their demand, that retailer is not going to want to work with you very long.”

That’s why cash flow forecasting is so crucial here. Parker recommends having at least three to six months carefully forecasted: your basic profit and loss models, with base-case, best-case and worst-case scenarios. “We all forecast ahead thinking things are going to go as we expect,” she says. “But if they don’t, what is your plan B?”

 

Crossing cultural boundaries

One consideration when thinking about expansion is cultural fit. It may be funny to think about cultural disparities between provinces in a country like Canada, with its wide stretches of open borders, but it’s not to be overlooked.

“The blessing here in Alberta is that we have a really tight-knit community in terms supporting local, farm-to-table businesses, and a lot of retailers capture that in their brand story,” says Parker. “But that’s not to say that this will be true in another province.”

If it’s not, you should find ways to connect to and capture audiences in other markets to build that same trust and loyalty. That starts with getting to know consumers there, segmenting them, and figuring out how to adapt your brand story to make that connection.

In doing so, it’s important to be clear, open and honest about your company’s values and purpose. For instance, if you have a “100-mile diet” restaurant concept that’s beloved in Edmonton and you want to replicate it in Winnipeg, don’t pretend it sprung out of nowhere — consumers will see through that. Local pride is prevalent everywhere, and consumers want to know who they’re supporting.

You also don’t want to leave your original loyal supports behind. If you’re growing and allocating marketing resources elsewhere, you want to ensure your domestic customers are still engaged. This is often overlooked in the expansion game. If you have one person handling all marketing, are you spreading them too thin by having them take on broad new campaigns? This is one area where you may need to hire more resources or partner with regional talent to help you — provided they share your values and vision.


Mining for resources

It’s not just your marketing team that can be spread thinly, especially in smaller operations. When taking on more markets, your human resources need to grow along with your business.

If you don’t already have a good handle on your HR process, Parker suggests you find a specialist in that area to help guide you, especially if this is your first time venturing outside your province. Think about the issues your business currently faces, and how that might be compounded when your customer base grows — perhaps in another time zone many kilometres away. How will you tackle returned merchandise, customer complaints, negative reviews? If you already have a model that works that you can build from, it will make the growth process considerably easier.


The rules of the game

Culture isn’t the only thing that varies from one market to the next. Before you decide where you’re expanding or exporting to, you have to consider things like different tax structures, product regulations, trademark and patent rights, employment protection standards, or even language laws.

It seems daunting to think about, but fortunately, there is help. Resources like Business Link are committed to helping Alberta entrepreneurs achieve success, and can provide tax and accounting help at affordable rates. The Government of Alberta’s Export Expansion Program offers funding to help local SMEs to operate abroad. And ATB’s Entrepreneur Centre can offer expert advice and tools to help realize your ambitions for sustainable growth.

We’re lucky enough to live in a time where we’re only a few mouse clicks away from finding valuable info about other markets, whether that’s your target audience, existing competition or potential allies. Although expansion can be an expensive proposition, the research process can start right away through searches, emails and social media.


Make it pop

One way to test new territories that Parker is particularly bullish on is pop-up markets. If you’re thinking of taking your business to other locales but skittish about the commitment (or if you’re online-only and want to make the move to physical stores), think about setting a temporary retail environment.

Sustainable footwear brand and ATB Financial client Poppy Barley started as an e-commerce company, eventually expanding to two brick-and-mortar storefronts in Edmonton. Over the years, they’ve also raised brand awareness through a series of successful pop-up shops in other cities, with more planned.

“I love this strategy because it doesn’t cost what it would to set up a full brick-and-mortar in other markets,” says Parker. “It allows you to get feedback on your product, engage with consumers in a new atmosphere, and see if it’s going to be a good fit to invest in further.”

A well-run pop-up campaign can also create a symbiotic relationship with other retailers, who can build up hype by showing off an exclusive new brand. It can also drive sales back to your online store, especially if you create a splashy, Instagram-worthy showroom for curious shoppers to experience.

Whatever strategy you choose, if you feel your company is ready for expansion, make sure you do the groundwork first. Moving into a new territory is a lot like starting a business from scratch — but when done right, it could be just the thing to kickstart real and lasting growth.

If you’re looking for a deep dive on everything you need to know around how to grow your business, our ATB X Accelerator program might be just the place for you. Alternatively, feel free to reach out to one of our entrepreneur strategists to explore where you are with your business, where you want to be, and how to get there!

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