That was the most common phrase I heard last week at SelectUSA in Washington DC. Over the three days of the conference I must have spoken with over 100 foreign companies interested in growing their business in the US. Not a single one was on the fence when it came to investing in the US. They know that the US is the next market that they want to enter, but need help to understand if they really have the necessary competitive edge to win business.
Building a business in the US can be pretty daunting. 50 States which can resemble 50 countries in terms of different regulation and taxes, plus different levels of openness to foreign providers. Many of the most competitive companies on the planet are already here and high operating costs are not to be sniffed at. OCO Global has been helping companies enter new markets, including in the US, for over a decade and I had the privilege of speaking at the opening panel at the Select Academy for companies looking to break into the US market. I wasn’t able to give a recipe for a secret sauce to smooth market entry, but I did enjoy sharing my tips on what pitfalls to avoid and how to make sure companies give the US their best shot.
The most common mistake companies make is thinking the US will be an easy market due to familiarity with American culture. America is a great market, but it’s as challenging as any emerging market and preparation is key. Many foreign businesses don’t do enough homework on why the US market is right for them, who their competitors are, what regulatory approvals they need and what market entry options need to be explored. Despite me emphasizing this repeatedly, I had half a dozen companies ask for help finding distributors and growing sales support, when they clearly hadn’t figured out their market positioning.
Another common mistake foreign companies make is not vetting their partners properly. Distributors do not sell products in the US. Companies need to train them, set incentives and provide market support. Companies should ask for references and speak to existing clients to see how they found their distributor, reseller or partner. It is also worth looking for partners who are not the market leader. I have often said it is better to be a major account for an enterprise that is hungry for growth, than one with a list of clients as long as their arm who rarely give you senior attention.
Another pitfall companies make is not seeking professional help. We help companies set up their US business by referring them to our network of partners for company registration, banking, property, tax, payroll and recruitment. It amazes me that companies will come and cut corners to save often small amounts of money by not hiring experts, to then end up flying back, many times, to unpick the simple errors they could have avoided. The same applies for picking a location to invest in. We have helped hundreds of companies consider which regions of the US best fits in terms of property, skills, energy costs and logistics. All companies should come up with a list of criteria of what is important to them and then validate their assumptions. Getting some impartial advice from a professional for these important decisions is key.
The good news is after the end of an excellent and busy SelectUSA Summit, we have identified around 40 companies with a strong interest in the US, the majority of them wanting to know “how soon can we start?. It’s going to be a busy summer for our team but hopefully by the autumn we will start to see some of our new clients entering the market. By next year’s Summit I expect we will be celebrating them investing in a number of US states, which is what SelectUSA is all about.
For more information on how we can help you get started in the US contact Spencer Mahony on:
T: +1 646 350 3490