USA vs Canada – Doing Business in the US, From a Canadian Perspective

Before I start and to ensure transparency, I am Canadian. I also hold the American business market in extremely high regard and believe it to be the truest form of capitalistic opportunity available to the world. That being said, there are risks associated with targeting a market such as the US for international business, let the seller beware.

• The US population is approximately 10 times the size of the Canadian population. Ten times the buyers, and ten times the sellers. Before you decide that expanding your target marketplace to the US is the answer to all of your revenue dreams, spend a significant amount of time assessing the US competitive landscape. If you are having a tough time setting your business apart from its competition here in Canada, you will sink 10 times deeper into obscurity in the American market.

• One word: distribution. Creating an internet platform to enable effective web marketing and online revenues sounds wonderful. That being said, Americans tend to have cheaper production costs and cheaper shipping costs. You need to figure out how you are going to compete financially when your US competition has lower overhead for the same product that you offer.

• The United States has an entirely different legal system than we do in Canada. Prior to assuming that you can just start shipping your product across the border, consider the following:

o Your product may not be legally protected, (the patent you have may not hold water, or worse, be in conflict with a patent held by an American competitor).

o You create an entirely new risk for legal exposure. Think really hard before you throw rocks at a hornet’s nest. The American society is a litigious one and you don’t want to leave yourself open to a host of lawsuits.

o Insurance. Make sure that your insurance here in Canada covers you in the US.

• Americans prefer to buy American. How are you going to provide an incentive for them to counteract their protectionist ideologies?

• Are you going to try to get in and get out, or are you going to try to create a long term business relationship with the American marketplace. If your product is successful in generating revenue in the US, you can expect a number of US based copycat companies to come on board with the same products or services that you offer. If you are planning to stick it out with your American customers, you need a strategy in place to ensure that you remain relevant and competitive.

The lucrative market in the United States is far too attractive a revenue stream for any savvy business person to ignore. What I am stressing is that the US market needs to be respected as a truly international marketplace, not an extension of the Canadian market with deeper pockets. Do the due diligence required to properly assess your risks and your benefits. I bet that you will still see opportunity but will realize that it will take a lot more work to do it right than you would have ever expected.