Author: Cyntha Coulter, Managing Principal, Aleksandra Corp.
California is a huge market with great potential for new businesses. It can be daunting, but not if you take the time to understand the market dynamics and the resources available to be your guide.
I am born a proud Canadian. I am an equally proud Californian. I have lived in California for over 35 years and have been a business “spirit guide” to companies around the globe looking to enter this vibrant and energized market.
As a local journalist put it and I share the view: “California isn’t the love of my life. It is why I love life.”
Let’s flash back to my arrival in California. I will never forget the night my Air Canada flight from Toronto was about to make landing at LAX. While I had been doing business in California for almost a year on a regular basis, this was it—the moving truck was on its way and this was to be my new home. As the plane started to descend, the pilot came over the intercom to say we would be landing in 45 minutes and for what seemed an eternity, all I could see were lights and more lights below. The panic really set in at that point and I thought to myself, how on earth am I ever going to fit in and “make it” down there!
As the years have passed, I have been thriving in my business and have become a respected executive and consultant, guiding companies from around the world to enter this market.
"Yes, I am passionate about California because it is more than a pretty face—it’s a strong force within the global economy."
Yes, I am passionate about California because it is more than a pretty face—it’s a strong force within the global economy.
So, suppose your business is doing well and you're looking for ways to expand your customer base, OR you are a start-up looking to launch. What if you could shift your focus to be part of the 5th largest economy in the world? No, it's not in Europe or Asia. It's California. Just in case you don't know, let me share some fundamentals about the California economy. We are a large and diverse market with a population of about 40 million people (about the same as the entire country of Canada) where more than 200 languages/dialects are spoken. Los Angeles County, alone, has a total of 88 Cities and 120 unincorporated areas. You have heard of the world as your oyster—that oyster is here.
Yes, we have natural beauty, a fantastic climate, beautiful sunsets, diverse communities and one of the most fertile, productive agricultural regions in the world. From a business and lifestyle perspective, let me give you more information to help drive your desire to maybe, just maybe, think about how you too can be part of this dynamic community.
Follow with me as I take you through why you would contemplate doing business here:
Access to capital: California companies receive more venture capital investment than any other area in the U.S.
Venture Capital: Over 45% of all U.S. venture capital raised in 2022 went to companies in California. In comparison, no other State received more that 13%
Leading businesses: Besides Tech, we also lead in huge agricultural, entertainment, and finance businesses
Skilled workforce: We have extensive community colleges throughout the State with one of the most prominent State-run advanced learning educational systems in the U.S.
Diverse workforce: Many cultures speaking many languages support businesses locating here from anywhere globally
Supportive eco system: Professional organizations for incubators, accelerators and networking are open to supporting new business
Global influence: Los Angeles is the second largest consular community in the world next to New York—represented by 105 countries
Environmental sustainability: California leads the world in ensuring that the environment is protected through legislation that works with business and communities
Infrastructure: California is the access to ports, airports, highways and support systems for logistics and distribution to enable global market reach
Port of Los Angeles: it the busiest seaport in the western hemisphere and the number one container port globally for 24 years
Innovative hubs: Rich in tech, research institutions, access to venture capital and investors leading to the support of entrepreneurship
Agriculture: Is one of the prominent elements of the State’s economy by leading the U.S. in production of fruits, vegetables, wines and nuts.
Gastronomy: Follows a fabulous agricultural region so it isn’t a surprise that there are 87 Michelin star restaurants in the State—the most in the country.
"MAPLE® Business Council has been an important organization for Canadian companies to join and to be a part of the exploration and advancement of the California dream."
MAPLE® Business Council has been an important organization for Canadian companies to join and to be a part of the exploration and advancement of the California dream. As a result, Canada has been actively involved in the market to the extent that:
Canada is California’s #2 commercial partner with over $53 billion worth of 2-way trade annually.
Canada has maintained its spot as the 4th largest source of Foreign Direct Investment (FDI) in Southern California through Foreign Owned Enterprises (FOE).
Canadian FOE’s comprise 900 Canadian companies providing close to 74,000 jobs.
As it turns out Like anything else, achieving success and sustainablility requires careful planning, realistic expectations, risk management, a solid infrastructure, government approvals, and boundless energy. The good news is that success in this market is an expansion that may exceed your expectations. While your move into the California market is unique to your business, there are lessons learned from others successes and failures.
"Personally, I have supported companies from Canada, China, Korea, Poland, UK, France, Italy and Argentina to either enter the U.S. market via California or supported them in their quest to enter the market."
Personally, I have supported companies from Canada, China, Korea, Poland, UK, France, Italy and Argentina to either enter the U.S. market via California or supported them in their quest to enter the market.
To cite a most recent example of a successful market entry, it is about a Korean company focused on the recycling of high-grade plastics. Less than 3 years ago, I began the feasibility study with the company to enter the market. After completing the business plan, the company decided to headquarter U.S. operations in California. Within 2 years and during Covid, all regulatory and business permits were secured to allow the company to move forward, equipment was installed, electrical upgrades were completed, hiring commenced and operations began. Today, the company is up and running and recycling plastics that would normally have gone to landfill. It has become a favored corporation by California businesses and government and is being rewarded with tax incentives, environmental grant programs and strategic partnerships in the waste management industry. Knowing how to navigate the political, regulatory and business environment gave the company the advantage to move to market very quickly by taking sound, experienced in-market advice.
Other companies that I have worked with to either enter or work in the California market include finance, technology, energy, aerospace, healthcare, food and beverage, and automotive to name a few. Not all are success stories and not all were ready for market entry. Obviously, there are a number of reasons why companies bow out, but challenges do include high costs of living, strict regulatory rules, taxation and business costs that are higher than other States and the highly competitive consumer market. What is often overlooked, however, is the availability and access to capital and the State incentive programs that often can truly support entrepreneurialism, along with a business community that welcomes new players in the market.
California traditionally, and remains, a land of opportunity and an excellent destination for the creation of business. Everything is here!
To share your comments or questions, please contact Cynthia at cynthiaacoulter@aleksandracorp.com.
Cynthia Coulter, Managing Principal, Aleksandra Corporation