Trading places | Canadian entrepreneurs travel to Bangor for a primer in international trade

For companies looking to establish a foothold in an international market, there's plenty of opportunity. The pages of Fortune magazine and The Wall Street Journal are filled with stories about the huge potential in emerging markets like China. And since the late 1990s, plenty of ink has been spilled about the increasing number of companies taking advantage of improved technology to spread their reach into the global market.

The story is no different in Maine. During the past few years, a number of high-profile trade missions have been led by Gov. John Baldacci and his predecessors to Japan, Mexico, Germany, Ireland and elsewhere. In December of last year, an agricultural trade mission to Cuba returned with more than $10 million in deals for products ranging from dairy products to apples. Later this month, Baldacci and the Maine International Trade Center are embarking on a trade mission to France, where Maine entrepreneurs will be matched with French companies to discuss business opportunities.

According to MITC and state officials, trade missions are a great way for businesspeople to expand their corporate horizons while trying to expand their bottom line. Throw the doors open on a new market, the thinking goes, and a whole new population of buyers and suppliers is open for business. But while the prospect of jetting across the Atlantic to visit European clients has a sexy ring to it, MITC also promotes the notion that Maine-based entrepreneurs might do well to consider developing international trade relationships a little closer to home ˆ— say, for example, Canada.

According to the Consulate General of Canada in Boston, Maine in 2004 sold more than twice the number of goods to Canada than the state sold to the entire European Union. Canada was Maine's best trading partner last year, with a full 34% of the state's exports ˆ— with a price tag of $825 million ˆ— heading north. Meanwhile, the state's trading relationship with Canada supported 24,000 jobs in Maine in industries ranging from wood products to lobsters.

And while Maine relies heavily on Canada as an export market, the state also imported nearly $4.7 billion in goods and services from Canada last year, including $2.8 billion for energy products such as electricity and gasoline.

While the business relationship between Maine and Canada is strong and getting stronger ˆ— the overall amount of trade grew by $1.3 billion last year, a 33% increase ˆ— the prospect of international trade can be a daunting one. Even though the proximity of the Canadian markets makes them much more manageable than, say, Paris or Berlin, a quick trip over the border still requires clearing a number of hurdles, from deciphering local tax codes to complying with immigration laws. As a result, many entrepreneurs avoid moving into international markets because of the perceived difficulty of those hurdles, according to Janet Scott, coordinator of the emerging entrepreneurs program at Enterprise Saint John, a Saint John, New Brunswick-based economic development agency.

In hopes of demystifying the process of international trade, Scott recently worked with Wade Merritt, director of MITC's Bangor office, to develop a trade mission for young entrepreneurs from Saint John. In mid-September, a group of nine entrepreneurs ˆ— ranging from artists and filmmakers to IT specialists and business consultants ˆ— traveled to Bangor to meet with a host of trade experts, fellow entrepreneurs and economic development officials. "As a businessperson, we feel like we're supposed to know everything," says Scott. "You don't really know everything. At the end of the day, you just have to have the contacts and know who to call."

Break on through
Following a Wednesday evening reception with members of FusionBangor, a local networking organization aimed at the region's young adults, the Canadian entrepreneurs met the next morning with a panel of experts at the Black Bear Inn and Conference Center in Orono. Dan McKay and Matt Raynes, attorneys with Eaton Peabody in Bangor, spoke to the entrepreneurs about the legal aspects of international business, including contract law and immigration. Sno Barry, a certified public accountant with Berry, Dunn, McNeil & Parker in Bangor, joined Eaton Peabody's Christine Worthen to discuss the tax implications of trade between Canada and the United States, and Cary Weston, a partner at Sutherland Weston in Bangor, wrapped up the morning meetings by talking about effective marketing strategies.

Following the morning meetings, the delegates split up for breakout sessions. One group of mostly artists ˆ— including 17-year-old jeweler Sarah Frauley ˆ— joined John Rohman, CEO of WBRC Architects and Engineers in Bangor and chair of the Maine Arts Commission, and Tracy Michaud-Stutzman, director of the Maine Highlands Guild, at the Bangor Museum and Center for History for a discussion about getting into new markets as a creative entrepreneur. Another breakout session was held at the University of Maine's Target Technology Center in Orono, where the center's director, Debbie Neuman, was joined by Joe Kumiszcza, executive director of MESDA, a statewide software and IT industry association based in Portland. The group, which included IT executives and business consultants as well as Greg Hemmings, a documentary filmmaker and producer with Saint John-based Hit Media, toured the facility and had a roundtable discussion about partnering with U.S.-based firms.

The schedule for the final day of the trade mission revolved around matchmaking sessions, where delegates met with local businesspeople in similar industries. (For more on the matchmaking sessions, see "Make me a match," page 27.)

During such meetings, Weston says it's important for entrepreneurs to be able to quickly explain what their companies do. That's because a company looking to tap into a new market ˆ— whether it's in a neighboring state or a foreign country ˆ— can't rely on brand recognition to get them in the door, he says. "What do you do and who cares?" asks Weston. "People think they need to use these technical, suave names, and they end up defining themselves as something they're not. If you're yelling to a bunch of people and nobody cares, then you're not doing a thing."

That said, a Canadian business working to break into a new market is likely to have an easier time getting its message across to a Maine customer than, say, a potential client in Beijing. Weston says that's because there just aren't many barriers between the U.S. and Canadian markets, which makes it easier to build trade relationships. "They're so similar that it's just a geographic line you're talking about," he says.

But many entrepreneurs need to get over the impression that crossing the border to do business is a big deal, says Scott. Mark Stevens, a trade mission delegate and director of business development at Saint John-based IT firm Geeknet, admitted as much during the breakout session at the Target Technology Center in Orono. The drive from Saint John to Halifax, he says, is roughly the same distance as the drive from Saint John to Bangor. So why, he wondered, did he feel the need to pack two overnight bags for a trip to Bangor when he'd typically pack just a toothbrush to go to Halifax? "Going across the border seems very intimidating until you sit across the boardroom table," says Scott.

Wade Merritt of MITC agrees that taking the first steps into international trade can be daunting. But he also notes that the added work often isn't backbreaking for companies selling goods or purchasing supplies from across the border. Instead, Merritt encourages entrepreneurs to think of an international deal just like they would any business transaction. "It doesn't have to be such a big thing," he says. "If you're just making a sale, learn what the procedure is so you're not running afoul of the law, and then you do your thing. It's attainable for anybody as long as you're willing to follow the steps ˆ— and they're not onerous steps by any stretch."

Only connect
Steve Milbury, an account manager with AnyWare Group, an IT company based in Saint John, knows firsthand about trying to break into the U.S. market. AnyWare has developed a line of remote-access technology products for the health care and telecommunications industries, and Milbury says the company recently signed its first U.S. contract, a distribution deal with Baltimore-based LCG Technologies. Meanwhile, he's says the company is working to secure a handful of clients in Maine, including the Maine Hospital Association in Augusta and Mount Desert Island Biological Laboratory in Salisbury Cove.

Milbury says that AnyWare Group's recent entrance into the U.S. market has its genesis in a series of meetings roughly a year and a half ago with Merritt, who had made a number of trips to Saint John in hopes of drumming up business between firms in Maine and Saint John. The message was well received by AnyWare Group: Milbury says the company had been trying to develop a partnership with U.S. companies. "We were looking for another means of getting more attention in the marketplace," says Milbury. "We're limited to the number of health care facilities in Canada, so for our company to grow, we need to grow in the U.S."

Milbury traveled to Orono during the recent trade mission to meet with other Saint John entrepreneurs and discuss his company's experience trying to land American clients. And, reports Milbury, many of his Canadian colleagues were encouraged to learn that a company from Saint John has had some initial success in international trade. "It was nice to be able to show [the participants] what kind of influence we have down there and what kind of impact we're starting to make," says Milbury.

According to Janet Scott, it's that kind of positive reinforcement that Saint John entrepreneurs need. She says the trade mission ˆ— as well as a number of other Enterprise Saint John programs ˆ— was developed in response to a 2001 entrepreneurship study by the Atlantic Canada Opportunities Agency, a federal economic development agency in Moncton, N.B. The ACOA survey found that most respondents didn't view entrepreneurship as a viable career choice. "We recognized that Atlantic Canada, for business development and to grow its economy, needed more small businesses," says Scott. "Maine and New Brunswick are very similar when it comes to that. We're a province that's been so dependent on our natural resources, just like Maine, and we need to diversify more."

The September trade mission, she says, was important for a handful of reasons, including introducing entrepreneurs to business leaders in a new market and giving the participants a sense of what kinds of business relationships and partnerships are available in different markets. What's more, Scott says the trade mission included an added benefit: Delegates had an opportunity to learn about each other's businesses in Saint John. She relates a story about Geeknet's Mark Stevens and Chris Nadeau, president of Evolving Solutions, a Saint John-based IT firm, who met during the trade mission and realizing that their firms didn't actually compete for clients in the Saint John market. "Even though they're both in the IT field, they realized that they did very different things and probably could collaborate together," says Scott. "That was something we didn't expect."