Small businesses eager to export to Canada can get bogged down by the daily grind of running their operations, and the desire to expand into cross-border sales fizzles.
The remedy: a bunch of motivated MBA students.
Companies interested in cross-border sales have been paired with MBA students at the University at Buffalo who have done extensive research on their behalf.
The businesses have come away with plans for exporting that they can follow through on. The students have earned real-world experience, some money and academic credits.
“At the end of this program, I really wanted the companies to be able to be exporting or at least know what they had to go through to get there,” said Maryann K. Stein, director of international programs at the Erie County Industrial Development Agency, which teamed with UB on the program. The semester-long project called “Exports to Canada” was well received, and another edition is planned for this summer.
Stein borrowed the idea from a longtime Canadian Consulate program that works in reverse, introducing Canadian companies to exporting to the United States. Seven Buffalo-area companies signed up, and UB joined in, providing six MBA students to work with the companies. Another two MBA students helped Stein run the program at the ECIDA, and National Grid provided a matching grant that supported the effort.
The objective was to determine whether exporting to Canada was a good and realistic idea for the companies, and, if so, how to tap into the market. If companies were already exporting to Canada, the goal was to find a way to ramp up those sales.
Stein limited the program to no more than 10 companies, to ensure hands-on attention. And the program kicked off with a two-day business trip to Southern Ontario, to get the companies into a cross-border mind-set. “You can’t work in a closed-box environment and expect to kind of conquer the world,” she said.
The interns had to get familiar with the businesses they were matched with. (The students were paid by the companies for their part-time hours, in addition to receiving academic credits).
“They did a lot of research that was available in Canada, who their competitors were in Canada and who their customers should be in Canada,” Stein said. It was the type of in-depth, focused analysis of Canada that the companies did not have the time or resources to devote to on their own, she said.
A ‘gold mine’
Michael Kibler, chairman of printing company Buffalo Newspress, said his intern’s work helped him identify customers to pursue in Canada, primarily in Ontario.
“In the back of my mind, I felt it would be good for Buffalo Newspress to do business just across the border,” he said, citing Toronto’s status as one of the largest cities in North America.
Kibler expects the Toronto market will generate 20 to 25 percent of the company’s total gross sales for 2013. “It’s sort of a gold mine.”
Robert J. Vezina, president of Life Safety, a commercial fire and security services company, said he had been considering expanding his company’s reach in Canada when the new program came along. Life Safety supplies fire and security systems to a variety of customers, including big-box retailers like Target and Home Depot.
The company’s intern delved into financial projections and explored whether exporting was feasible. Vezina decided his best move would be to establish a Life Safety presence in Canada, something he is now working on. The Exports to Canada program gave momentum to the idea, he said.
The MBA students were eager to make an impact at their companies, Stein said. “They’ve got everything they learned in school that they’re ready to put in practice.”
UB created a class around Exports to Canada and chose business veteran John Dunbar as faculty adviser. Dunbar, an adjunct instructor at the School of Management, was formerly a partner at Strategic Holdings and Investments, a private equity firm. He had dealt with just the types of companies the students were assigned to.
The first task Dunbar gave his students was to conduct a competitive analysis of the companies as they currently existed. “What is your competitive advantage here?” he asked them to explore. “Who do you compete with?” If the companies were not in strong shape domestically, exporting might not be a wise move, he said.
Dunbar urged the companies to share financial data with the MBA students, to provide them with a complete picture of the business. He and the students agreed to sign confidentiality agreements to ease any concerns.
The students met weekly for their class with Dunbar to share experiences, being careful not to share proprietary information. “I think they all learned by hearing what the other students were going through,” either in the work setting or in resources they found for information, he said.
The participating businesses praised the interns for their persistence in gathering data and asking questions of employees. One of the companies told Stein its intern was “relentless. He wouldn’t leave them alone. At the end, they were so grateful he did it.”
Exports to Canada paid dividends far beyond its stated purpose, Dunbar said. “It was an opportunity for the companies to experience the talent in the UB MBA program that they ordinarily wouldn’t.”
The program also exposed the students to opportunities in small- to medium-sized businesses they may not have thought about, and allowed them to interact with multiple departments within one company, an experience a Fortune 500 company-type job probably would not provide them, he said.
Dunbar said the companies took the MBA students’ work seriously. At the end of the program, the interns had to deliver presentations to the employers they worked with. “Some of the presentations were in front of seven or eight people,” he said.
Giving real value
The presentation by ValueCentric’s intern, Ruth Huoh, has morphed into a sales presentation the company can use to pursue Canadian customers, said Scott C. Terhaar, chief financial officer of ValueCentric. The Orchard Park-based technology and information services company works with customers in the health care industry.
Huoh did an immense amount of research to help ValueCentric understand the Canadian pharmaceutical market, Terhaar said. “We didn’t know who the players were, what the market was.”
Supported by Huoh’s groundwork, the company is working on signing deals with distributors in Canada and has connected with pharmaceutical associations that have proved helpful, Terhaar said.
Huoh said she enjoyed the experience. Terhaar gave her lots of autonomy to conduct her research, and she demonstrated how the company’s flagship product, ValueTrak, could succeed in Canada. “I was able to find out information that directly impacted the way that ValueCentric entered the market, and really prove that ValueTrak did fit the needs of the pharmaceutical companies up North,” she said.
Huoh continues to work with ValueCentric on some other initiatives, even after the Exports to Canada program concluded.
The program was an ideal outlet for MBA students who were interested in international business and learning classroom concepts, and wanted to take those ideas into the workplace, said Carrie Gardner, director of the School of Management’s Credit-Bearing Internship Program. “The students just became integral parts of their team.”
“The employers were kind of kept on their toes by the MBA students and it worked out very, very well,” Gardner said.