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Robin Kovitz wanted a company that had its best days before it. She purchased Baskits Inc. in 2014 with that in mind.Courtesy of Baskits

As a private equity manager, Robin Kovitz was always searching for successful multimillion-dollar companies her firm could acquire that were ready for the next stage of growth. But when she decided to buy a business for herself, she wanted one with its best days yet to come.

She found it in Baskits Inc., a Toronto-based gift-service company launched in 1985, which she purchased in 2014. The company had done well, launching a pioneering e-commerce site in 1995, and opening its first retail store in 2000. But Ms. Kovitz saw much more growth potential.

“Baskits was exporting a tiny bit,” she says.

At the time of purchase, the company had a few million dollars in yearly sales. It now has almost $20-million in annual revenue, about 10 per cent of that from exports. The company plans to focus on the United States as an area for growth and explore other markets in the near future.

“Obviously the U.S. is a great place to grow because it’s 11 times bigger than Canada,” says Ms. Kovitz, who has a bachelor’s degree in commerce from Queen’s University and an MBA from Harvard Business School. “If you have a good product and offering, being able to successfully export to the U.S. is great because it’s such a large market.”

She also expanded into new markets by buying out a few competitors.

Her initial focus was on improving and elevating the product to boost demand. On the service side, she says the company also focused on customer experience and invested heavily in technology.

The exchange rate is an advantage for Canadian companies in the U.S. market, as it essentially translates into a 30-per-cent discount for their American buyers, Ms. Kovitz says, but there are challenges selling south of the border.

Exporting food adds a layer of complexity to exports with regards to the U.S. Food and Drug Administration. It’s further complicated by the fact that for Baskits, one customer purchases the gift and another receives it, and the company must ensure the recipient isn’t hit with duties.

The United States has a more established distribution network, resulting in much lower shipping fees. American customers, and increasingly Canadians, expect free shipping but that cost is much higher for Canadian enterprises, Ms. Kovitz says.

And the border controls process is ever-evolving and can be challenging, she adds. “We’ve invested a lot of time and money in the latest software to make sure that it’s seamless.”

The growth of Baskits has been used as a case study at Harvard Business School, which has helped draw interest from around the world. Still, there are many considerations when evaluating a potential market, including currency exchange, regulatory environment and local tastes and preferences, she says.

Even in the United States, there are 10 distinct regions with differing tastes, Ms. Kovitz points out.

“What would sell in Texas might not fly in New York. Just understanding the local markets and making sure that your product line is appropriate for the different regions and regional preferences is a challenge.”

Baskits is looking into European expansion soon with its popular baby line. “We’re just moving into a huge new warehouse that we got it in and are rebuilding and once we do that, our next focus will be Europe.”

Being a business owner has a steep learning curve, Ms. Kovitz says. She’s had several mentors and advisers, including her entrepreneur father, who sold his Calgary-based business, Centennial Foods, in 2007.

She’s also worked from the outset with Export Development Canada and Business Development Canada (BDC), which has provided financial support ad advisory services such as the BDC Growth Driver program.

BDC is essentially Canada’s bank for entrepreneurs but it’s much more than just a financing institution, says Mary Ann Wenzler-Wiebe, its vice-president of financing and consulting for the Greater Toronto Area. The organization also offers advisory services for clients at all stages of development and it has worked with Ms. Kovitz and her team at Baskits since shortly after she purchased the company.

“It was a smaller business at that time that did have growth aspirations,” Ms. Wenzler-Wiebe says.

BDC helped Baskits with funding to help it finance web and mobile marketing and to hire additional staff. But more importantly, she says, it worked with the company to design a financing program that would grow with it.

“Exporting truly is a journey that does not start when you sell abroad,” she says. “That’s a mistake many entrepreneurs make, not taking the time to build a strong base operation, or really understanding or analyzing your pain points, and thinking about what potential pitfalls they may encounter.”

The Baskits team enlisted the BDC Market Expansion program to better understand those aspects, with the aim of increasing sales through web development, Ms. Wenzler-Wiebe says. BDC also provided assistance in financing the acquisitions that helped the company expand its markets.

“Flexible terms and conditions allowed them to expand their business without having it be a drain on cash flow,” she says, all part of building a strong base upon which to build exports. “The fundamentals have allowed them to gain momentum to a point that when they are looking at international expansion, they’re well prepared to do that.”

BDC has three pillars for helping businesses succeed: financing, advice and partnership, Ms. Wenzler-Wiebe says. “You can’t do it all alone. BDC has a wide network of contacts and relationships, including our sister corporation EDC.

“Bringing in experts can save business owners a lot of time, a lot of money, and a lot of worries, and significantly boost their chances for success.”

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