UK firms should narrow their markets to make entering the US market worthwhile. [brightcove id="3819665917001" title=""]
Breaking into the US economy is a dream for any business. It is, after all, the world’s largest market, it has the world’s largest private sector with low regulatory barriers and English is spoken everywhere! It’s also a springboard into other markets via a far-reaching supply chain.
But the problem many would-be exporters face is that they see the US as one big market and one big opportunity. Not so, says UK Trade & Investment (UKTI) in its guide to exporting. There are “vast regional differences between the 50 markets/states,” and it has “strong competition, causing saturation of products or services”.
There are also cultural differences between the UK and US which may leave many exporters, or those looking to set up in the US, wrong-footed such as higher customer service expectations, higher cost for business insurance and the whole issue of operating in a litigious society. “It is also an expensive and time consuming process [to obtain] work visas,” adds UKTI.
So, it is worth your while? In 2012, UK trade in goods and services to the US totalled £135 billion, up 3.6 per cent from the year before, so it’s clear many businesses are trading successfully with the States, and increasingly so.
There are many sectors and industries where UK firms can flourish adds UKTI, and it advises setting up a fully-fledged US entity rather than just opening a US branch of a UK business.
Those who have ventured to the US advise it’s best to pick one market – such as Boston, California or Texas – and focus on that rather than try to adjust to the many and varied nuances you’d need to cover to work across many regions.
But there are some generalities. “Most industries in the US have very clear, defined rules of conduct,” says Sean Kilachand on Forbes. “It’s crucial to know how things work. For example when selling to big retail chains, buyers decide by March what will be on their shelves the following year. If you approach them in April, you will not be considered.”
But don’t be deterred, he says. “Doing business in America is easier than in other countries. Almost any business service imaginable already exists and it’s remarkably easy for start-ups to leverage this pro-business climate and appear like a mature, big business from day one.”
That may be the best advice as it seems, such is the competition, you will only have one shot at success, he adds. “Companies must deliver what’s been promised; if a major deadline or target is missed just once, sometimes that’s all it takes for major collaborators and partners to look elsewhere.”