In just a few short weeks, SWS Warning Lights Inc. will manufacture their first product in the United States—in Buffalo Niagara where they have leased 4,000 sq. ft. of space and hired new employees.
They are a Canadian-based manufacturer of warning lights, the ones often found on snow plows or construction vehicles. After the product is complete and the box is sealed, they will proudly slap a ‘Made in USA’ sticker on the packaging—the end of a journey that’s already paying dividends.
SWS is not alone in their desire to expand into the American market or choice of Buffalo Niagara. They also weren’t alone in the challenges they have faced. To navigate those often-tumultuous waters, SWS leaned on the complimentary services of Invest Buffalo Niagara (InBN) to manage their cross-border expansion project, like many other companies have.
Why expand to the U.S.?
The path of Canadian businesses expanding to Western New York is traveled often—and often for similar reasons, too.
Most obviously is its geography, located right on the Can-Am border with seven ports of entry. The ability for a Canadian business owner to juxtapose his/her new U.S. expansion just over the border creates ease in travel and great connectivity. Buffalo Niagara is also located within a 10-hour drive of 40% of the bi-national population. A 10-hour drive can get you as far west as Chicago and south as Kentucky. The region is perfect for distribution centers.
Many Canadian companies see a lot of their sales coming from the U.S. In that case, it’s good to be closer to your customers, so you’re not spending on exporting and saving on distribution. If your product gets returned by customers, it’s helpful to have a U.S. address, as well, so the product doesn’t go over the border twice, costing you more. Businesses can also see an increase in those sales with a Made in USA label—and be available for government contracts that require American manufacturing. If your U.S. sales aren’t that high, entering a new market could open new doors to a larger market for you.
Do the due diligence
Canadian companies looking to expand to the U.S. are best served by following a due diligence process that evaluates an organization’s needs, long-term plans, and addresses practical consideration in a proscribed order. For example, some companies seek to secure real estate options before addressing critical factors such as immigration first—this can put a company and their employees at risk. Also, finalizing a real estate transaction prior to securing incentive commitments can make a company ineligible to receive key incentives. That’s just one of many examples in which a company can get its expansion in trouble by not following a tried and true process and working with experts in that process.
You don’t have to go it alone
Since 1999, InBN has helped 100 Canadian businesses expand to the Buffalo Niagara region. InBN is the region’s nonprofit economic development organization offering free project management services. InBN can quarterback a project with veteran experience.
InBN has connections with experts in cross-border law, accounting, tax, and human resources to help ensure companies succeed.
InBN leverages its connections to help companies in many ways, including a free downloadable Guide to Canadian Business Expansion, Volume 2 (See Volume 1 here). The Guide is a compilation of expert opinions and insights into the process of expanding a business to the U.S., including how to incorporate, how to transfer funds, immigration considerations for employees and the owner, and many more topics. In the coming months InBN will also be releasing a downloadable publication dedicated to human resources and staffing concerns.
“Invest Buffalo Niagara afforded us peace of mind throughout what could have been a very complex process,” said Tom Chopp, SWS co-founder. “They built the business case and we couldn’t be more happy to now expand to Buffalo Niagara.”
The example of SWS Warning Lights Inc. helps to shed a light on the Canadian business expansion process—the machinations and potential success of the decision. But SWS is just one of many companies that have successfully completed the process with the help of InBN.
If you are interested in growing your business, you can visit InBN’s website, schedule a call with InBN’s International Business Development Director Carolyn Powell, or download our Guide.