“Over the last 12 years, I have worked with hundreds of companies trying to crack the world’s largest market and have seen first-hand what makes for a successful market entry strategy,” says Ian Smith, Founder and Chairman of United States Connect, Founder and CEO of CargoHound. “If I had a dollar for every time a company said to me, ‘If we only get one per cent of the US market we will have it made,’ I would be a rich man.”
Whether your biz is booming on home soil and you’re looking to expand into the US or you’re just getting started and wondering about your potential for making it in the Big Apple (and beyond), Ian shares his hard-earned insider insights on how to actually make it work.
1) Don’t expect overnight success
All companies make the same mistakes when entering the market and this is generally centred on underestimating the time and effort required to be successful. Anecdotally, most companies will take between 5-7 years to be profitable in the US and therefore need to allocate sufficient resources up front.
2) Do understand the market(s)
The US market is one of the largest and most lucrative in the world but it is also one of the most competitive. A common mistake companies make is thinking of the US as one market – it is in fact made up of many significant markets, therefore companies may need to segment by geography, industry or demographics depending on their product or service.
3) Do prep for the hidden costs of international freight
This is a trap for young players. Incoterms are used to define where ownership, risk and the responsibilities of buyers (generally importers) and sellers (generally exporters) transfer throughout the shipping process. They are often overlooked and more often misunderstood with significant consequences. Companies new to export should check out this infographic.
4) Do as the Romans do
With over 500,000 lawyers in the US it is not hard to see why it is one of the most litigious countries in the world. Seeking legal advice is just part of doing business in the US and getting it right from the start can save you a lot of time and money. Ideally you should consider seeking legal advice on things like contracts & agreements, IP, product liability, immigration and establishing a US office.
5) Tall poppies welcome
Modesty is not a virtue in the US and will not win you business! Not only are you expected to say that your widget is the best in the world but also have 5 reasons why. You need to know your competitive advantage and convey it in a succinct and confident way. Practice your “elevator pitch” when you meet new people – US taxi drivers are always up for a chat!
6) Patience and persistence pay
Business in the US is all about face-to-face contact so be prepared to spend a large amount of time in the market even if you have established distribution. With so many competing priorities in the US, email is usually ignored and voicemail is used to screen calls. When calling a prospect a good rule of thumb is to ring until you feel uncomfortable and then ring ten more times!
7) Leave your sarcasm at the door
I will admit that I am not all that funny but never have I experienced so many lead balloons as in the US and what’s worse you can (and will) offend potential clients if you persist!
8) Absence does not make the heart grow fonder
Business in the US is all about face-to-face contact. Most of the successful exporters I have dealt with have either set up shop over there or have their country manager spend at least 6 months a year State side to support distributors/reps and generate new sales.
9) Business is king
In such a competitive environment potential partners do not want to hear about the weather or how your favourite footy team went on the weekend. It goes without saying that you need to have your A game on or you don’t stand a chance. Know your value proposition as it relates specifically to their business, prepare your elevator pitch and hit them between the eyes with it!
10) If you don’t ask, you won’t get
Again, most companies enter the US thinking that they can do it all themselves and only to find that they waste a lot of time, money and energy. Organisations like Austrade and State Government Offices are a fantastic resource and have staff on-the-ground in major business centres ready, willing and able to help.
11) Not what you know, but who you know
The Old Boys and Girls Club is alive and well in the US. Where possible surround yourself with key advisers who are well connected in your target industries and geographies. Join industry associations and attend trade shows. Networking is not an optional extracurricular activity!
12) Don’t get lost in translation
Just because you grew up on American sitcoms doesn’t mean you will necessarily be understood, particularly not in a boardroom. Make sure all of your marketing materials use US spelling, grammar and measurements and never use foreign slang.