Small Business & Entrepreneurs: KPMG Enterprise(TM)

TORONTO, Dec. 2 /CNW/ - For reporters interested in writing about topics relevant to Canada's mid-sized businesses and privately owned companies, please see the enclosed Business Adviser, released by KPMG Enterprise(TM). Please feel free to either use excerpts from the attached or publish an article in its entirety, provided proper attribution is given to KPMG Enterprise.

Highlights of this issue focus on the importance of growth strategies for owner-managed enterprises such as:

Headline: 'Taking on the World'

Challenge/Issue: Many Canadian private companies recognize the opportunities for expanding operations outside Canada. There are much larger markets beyond our boundaries, and foreign expansion can bring increased sales and profitability. Adding to the allure of foreign expansion is the rosy outlook for Canada's economy as the global economy recovers. If economists' predictions prove accurate, Canadian companies should have an edge in doing business globally in the coming years.

Some key points to consider:

    
      -  More than ever, there is a need to identify and exploit
         opportunities abroad and perhaps shift market strategy. This
         challenge is greater for smaller private companies than for larger
         public companies that have extensive resources and global
         connections.

      -  This year's survey probed the impact of the recession on Canadian
         companies' foreign operations and their expansion plans. While
         respondents said they remain enthusiastic about the prospects for
         global expansion in the coming years, some suggested the recession
         caused them to scale back expansion plans.

      -  In good economic times, 60 percent said they would retain status
         quo, down slightly from 63 percent last year. One-third said they
         would increase foreign expansion during an upturn, up from one-
         quarter a year ago, while only 6 percent said they would cut back,
         compared with 10 percent in 2008.
    

Solution/Response to Challenge: It is possible for any company, regardless of size, to succeed in the United States or abroad - providing it does the right planning and preparation, and follows a sound strategic approach.

Benefits: An owner of or an executive working with a Canadian private company should design a global expansion strategy that is in synch with their business goals and objectives. With the right products, organizational commitment, and input from professionals at home and abroad, expanding beyond Canada's borders can help propel a business to a new level of success and prosperity.

Headline: SMEs - Getting Ready for Global Growth

Challenge/Issue: When KPMG Enterprise recently surveyed small- and medium-sized enterprises about their biggest challenges or concerns relating to growth, more than 80 percent said they had concerns about the customs process. This process can be complicated, but with the right preparation, it doesn't have to stand in the way. Even though some governments may be responding to the current economic downturn by increasing protectionism, small- and medium-sized businesses still have incredible opportunities for global growth.

Some key points to consider:

    
      -  When exporting goods for sale, the exporter must pay close attention
         to a range of customs processes to help make the transaction go as
         smoothly as possible. The terms of sale for exported goods are
         vital - they will dictate where the title of the goods transfers,
         the price of the goods, when and where the seller can expect
         payment, and what responsibilities are borne by the exporter of the
         goods versus the importer.

      -  Consider a simple scenario where the Canadian company (we'll call it
         "the seller") sells goods to its foreign client ("the buyer") and
         does not want any responsibility for the carriage, insurance, or
         delivery of the goods.

      -  More often, we see companies entering into agreements with customers
         to deliver goods duty and tax paid to them in a foreign
         jurisdiction. This is not always easy to do, but with some planning,
         it is possible.
    

Solution/Response to Challenge: Perhaps the entire message here can be summed up in one word - preparation. Of course, being prepared is good business practice in any case, but especially when the private company is looking to grow through exports. A well-prepared sale will, in most cases, create a happy seller and a happy buyer.

Benefits: KPMG Enterprise can help make export transactions easier and more cost-effective.

Headline: Signs of Strength and Stability from Outsourced Service Providers

Challenge/Issue: According to the KPMG Enterprise Taking on the World 2009 study, 27 percent of Canadian private companies currently outsource or offshore some business processes to other countries. This number rises to 40 percent of respondents who have succeeded in achieving their company's expansion objectives, up from 34 percent in 2008. We may conclude that outsourcing presents an increasingly attractive and viable model for competing on the global stage.

Some key points to consider:

    
      -  For many private companies facing unprecedented operating conditions
         at home, outsourcing and offshoring are transformational initiatives
         that can achieve a variety of critical business objectives,
         including quality and delivery improvements, cost reduction,
         innovation, and responsiveness.

      -  Seventy percent of Canadian private companies indicate that the
         domestic downturn has had little to no impact on their use of
         international outsourcing - positive evidence of Canadian resolve to
         win in the highly competitive global business environment.

      -  Private companies that outsource business-critical services should
         be alert to the potential for increased risk exposures in this
         environment, and take steps to reassess the strength and stability
         of their outsourced service providers as conditions evolve. A
         successful client/provider relationship often includes good
         governance balanced with a reasoned position toward risk.
    

Solution/Response to Challenge: We hope that the recent economic crisis will ultimately lead to a stronger business climate that places a premium on regulation and professionalism. Increased general awareness of social, ethical, and legal standards can help stabilize global markets and bring greater transparency, accountability, and discipline to complex working relationships.

Benefits: Risk and innovation will always be a part of doing business - especially as expansion-oriented private company owners and executives continue to pursue growth opportunities abroad. These leaders should be "proactive, not over-reactive" as they endeavour to balance good governance and appropriate levels of risk in outsourcing/offshoring business processes.

About KPMG Enterprise

KPMG Enterprise is a network of professionals devoted exclusively to serving the needs of private companies in Canada. We can provide responsive and effective advice about financial, business, and compliance challenges. KPMG Enterprise can provide specific tax and regulatory advice for each US state, or for any country in the world.

About KPMG

KPMG LLP, a Canadian limited liability partnership established under the laws of Ontario, is the Canadian member firm affiliated with KPMG International, a global network of professional firms providing Audit, Tax, and Advisory services. Member firms operate in 145 countries and have more than 123,000 professionals working around the world.

The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss cooperative. Each KPMG firm is a legally distinct and separate entity, and describes itself as such.

SOURCE KPMG LLP

For further information: For further information: Media Contacts: Mark Klein, Manager, Media Relations, KPMG, mklein3@kpmg.ca, (416) 777-3895


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