Five Essentials for Companies Trying to Enter U.S. Markets

The United States is undeniable the best place to do business. It has the largest and most stable economy, the wealthiest consumers, plentiful capital financing, and pro-business political and legal systems. In addition, industrious people arriving from other countries regularly realize their “American Dream.”

However many international businesses struggle as they underestimate the complexity and challenges of launching and expanding their businesses in the United States.

Here are five essentials for businesses trying to enter the U.S. market:

1 . Fully commit to U.S. expansion

Companies must invest the necessary capital, resources, and time to succeed in the United States. Board directors need to view this investment as a five or ten-year commitment, because of its exponential upside potential. Companies need to send top executives to America to demonstrate their commitment to American customers, suppliers, and partners. And these executives must have the determination and commitment to overcome the inevitable challenges and obstacles that will arise.

For early-stage companies, it means sending a founder to establish their U.S. business operation. Bruce Buchanan, founder and CEO of ROKT, transplanted his company and his family to New York from Sydney, Australia. He said, “If you take a market seriously, you have to be in it. The work requires absolute commitment.” His ten-year-old company was recently valued at nearly $2 billion.

2 . Set clear goals and measurable objectives

It’s essential to establish clear goals for your business in the United States. Goals that are both aspirational and achievable. Clear goals that will guide your company’s critical business decisions on complex issues. Goals that will attract, motivate, and inspire employees.

Bruce Buchanan’s goal for ROKT was to be the leading e-commerce optimization software in the world. He recognized that U.S. expansion was important, because of America’s size and abundance of e-commerce players.

In addition to clear goals, companies need measurable objectives with defined timelines. This is important to both guide activities and monitor and refine tactics. For example, a drop in sales leads would trigger an adjustment in marketing investment and tactics.

3 . Focus and target efforts

The United States is huge with approximately four million square miles and more than 330 million people. Each of its 50 states has different laws and regulations. The country is incredibly diverse in climates, ethnicities, and lifestyles. Customs and business practices in New York City, for example, are dramatically different than in Texas or Florida. Therefore, it’s essential to concentrate your U.S. activities on specific markets before expanding across the country.

The decision of which location to enter (your beachhead market) is critical. For example the British supermarket chain Tesco exited the U.S. market within five years after losing approximately $1 billion. One of their biggest mistakes was choosing to enter two of the most competitive, over-stored markets in Southern California and Arizona.

In addition to choosing the physical location, you’ll need to select which product category, channels of sale (i.e., online vs. in-store), and stage of the value chain to introduce to the U.S. market. Another Tesco mistake is that it introduced a limited-item grocery store format that didn’t match the needs and desires of U.S. shoppers.

4. Build a strong local network

You’ll need qualified advisers and experienced partners who can help you navigate the U.S. market and ways of doing business. Certainly, it is important to retain legal and accounting experts to navigate the complex U.S. legal, immigration, and tax systems.

Local marketing and research experts are needed to gather intelligence on the local consumer tastes and your competition. Local advisors and partners can connect you with the necessary suppliers and other needed resources.

Bruce Buchanan said, “The early days are rough. It’s hard to get traction and credibility. [If] You don’t have a network, you don’t have access to people that can help.”

5 . Expect some hurdles

Many international companies have tried to enter U.S. markets only to give up in a few years, having lost significant money, time, and reputation. Most start-ups fail after a few years, too.

One reason is that international businesspeople and entrepreneurs underestimate the difficulty, cost, and length of time required to enter and grow in the U.S. market. The competition can be fierce, and customers are often fickle as they face many choices. In addition, there is the challenge of living and staying in the U.S., because of the high cost of housing and living expenses.

Matthias Farwick, CEO of Txture, an Austrian technology company that is trying to enter the U.S. with a cloud transformation platform said, “It’s difficult to grasp the gravity of these challenges until you’ve experienced them. After I lived it, now I know.”

If you want to learn more about entering the U.S. market or just want to talk, please contact me at: matthew@usaccelerator.biz