Once you have achieved success locally, it is natural to want to expand your business to overseas markets. However, expanding one’s business to the US market isn’t an easy task and can be very expensive, even more so if the venture ends up failing.
So before you take that leap into the unknown take a look at the following factors to increase your chances of achieving success abroad:
Determine acceptable funding and resource allocation
How much are you willing to invest in this expansion? A successful expansion is not always guaranteed, and you should consider whether the funding or resources you allocate will impact your current business in a positive or negative way.
When determining funding look at legal fees, office space, visas, marketing, user acquisition, travel expenses, website updates, launching fees and so forth. Also remember that you will probably need senior personnel to dedicate their time to make the expansion happen. This means that they will be less involved and available to help with your local business endeavours. Who are you willing to “give up” and are you okay with them travelling frequently?
Change the way you communicate
Don’t fool yourself into thinking that you can take the same habits you have adopted in your local business dealings to the US with the same positive effect. Not paying attention to subtle cultural differences can quickly turn a “yes” into a “no”. For example, a British company going over to the US may think that their shared language of English also equals a common culture, but this is of course not true. In the US, self-promotion is an encouraged practice, while in the UK it is not. Similarly, a UK businessman might find the enthusiastic nature of a US counterpart overwhelming, while the Brits’ stern approach can seem discouraging to Americans.
Reserve time to familiarise yourself with foreign culture and local customs. Before you establish your business in the US, take a trip there as part of a working holiday and observe how things are done. Do thorough research on what is acceptable and what is not. Remember, something as simple as not using US spelling can influence potential clients’ perception of your company.
Take note of documentation
Red tape can have you tied up for months, but doing your research beforehand will help the process run smoother. Think about what type of insurance you will need, whether the products you are importing (if you are) need licenses, certificates of origin, shipping declarations and so forth. Not preparing documentation correctly can have a negative impact on your success. Have a clear idea of what you need, get it and make sure to keep documents up-to-date.
Establishing headquarters
The United States is a big country with many thriving cities and towns, all of which can be seen as potential business hubs. However, it all depends on what you want to achieve. It is tempting to want to go directly to the biggest states or cities, but these may not be ideal for what you are selling.
Things to consider: Are the prospective headquarters central with good travelling connections for both clients and employees? Will it be easy to recruit employees locally for your branch? Are your products in demand in the area? Is office space rental within your budget?
Research local competition and your target market
This step is essential no matter if you’re starting a new business locally or expanded an established business into an overseas marketplace. Identify what US businesses are already established in the area you are planning to set up in, and if they offer the same products as you do. Are there many similar businesses? Is the competition cornering the market or is there a gap that the other businesses have not yet seized?
Use market research to figure out whether there is a need for what you plan to provide. Research not only the overall US market but also specific areas. This will give you a good starting point and identify key areas for even further expansion.
It is also a good idea to set up face-to-face meetings with potential customers to gain in-depth insight into what is expected of your new business. Doing research in person will also help to get your business’ name out there.
Become involved
Whenever you travel to the US, which you should before making permanent changes, make sure to become a part of the business community there. The best way to do this is to go to relevant industry events and forums. If possible try to become a speaker at such events. This participation can help you meet influential people in your industry who can advise you about the expansion. It will also help you to understand the new business culture by interacting and talking with like-minded people in a more social setting.
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