Navigating the Canadian Business Landscape: A Strategic Approach for MLM Companies

Posted by naxumadmin / September 18, 2024

Opening into a new jurisdiction can be an exciting but complex adventure. Making sure your business does not bite off more that it can chew is important. As an MLM lawyer to many direct selling businesses, I usually suggest to my clients that they enter Canada using the “Crawl, Walk, then Run” method.  

1. Crawl: Laying the Foundation

Starting a business in Canada requires careful planning and groundwork. In the “crawling” phase, focus on understanding the Canadian market. From a legal perspective, it means ensuring legal compliance by obtaining a written opinion from the Competition Bureau. From there, you will have access to Ontario and British Columia as markets without the need for further provincial licensing. You may also consider consulting with a local accountant or business advisor who can help navigate tax obligations and financial planning.

Next, assess your technology needs. Meeting providers like Ben Dixon at NaXum who have experience in Canada, can open your eyes to the requirements and best practices as you evaluate if your platforms are ready for expansion. 

Next, building a local network of service providers and field leaders is also key. As you know, direct sales is a people industry, and having the right people in place can help your business grow and sell more products. 
Next, start off by licensing your best selling products. Start this early, as sometimes licensing can take many months. 

Lastly, many companies use the “Not For Resale”, or “NFR” to enter Canada.  Unfortunately, NFR is often not the right solution for most businesses because of the legal risks it entails when not managed correctly. Make sure you obtain the right legal advice with respect to NFR right away. This is definitely a case where a legal “stitch in time saves nine”. 

2. Walk: Expanding and Enhancing

As your business becomes established, you enter the “walking” phase, focusing on growth and operational efficiency. Consider expanding your direct sales market to other English speaking provinces. Consider investing more in product licensing, and bringing efficiencies to your logistics network. 

Consider your customer feedback. What is your Canadian field telling you? How can you better adapt your offering to your Canadian customers? What can you do to better the Canadian experience?

Explore marketing platforms that can give you insights on your own members behaviour so you can see areas to remove waste.

3. Run: Scaling and Innovating

In the “running” phase, your focus shifts to scaling your operations to all provinces, including Quebec. To expand to Quebec, you will need to understand French language legislation, and better understand Quebec’s needs as a province. Likely, this means in investing in translating your documents to French. 

Lastly, continue to build a strong company culture that does not just treat Canada as a 51st state. Canada is unique, and respecting this uniqueness will help your business grow. 

Summary

By following these phases—crawling, walking, and running—you’ll be well-positioned to thrive in Canada’s dynamic business landscape, ensuring long-term success and growth. Canada is a great country to do work in, especially for American businesses that want to “dip their toes” into the global market. 

Watch Michael discuss more insights in our podcast episode:

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