Expanding to other markets can be intimidating. Danny Lopez, CEO at Glasswall, tells us about how to successfully cross the pond and build a presence across the globe.
Across every sector, ambitious businesses see huge potential in expanding beyond their domestic borders. Replicating local success on the international stage is a logical step in the growth journey of organisations everywhere and can often be a prerequisite for delivering on business objectives and growth plans.
In many ways, today’s highly connected, digital ecosystem means it’s easier than ever to grow into new markets and territories. For UK and European businesses looking at the enormous opportunities that exist in the US in particular, the prospect of competing in one of the world’s richest and most competitive economies can be attractive and daunting in equal measure.
Yet, the opportunities are arguably greater there than almost anywhere else. According to the Office for National Statistics, the US is one of the UK’s largest export markets for goods and services, accounting for 18.9% of total UK exports in the year ending Q1 2019. The US also ranks 6th for ‘Ease of Doing Business’, according to 2019 data from the World Bank, an assessment that looks at a variety of factors from starting a business to getting credit.
Clearly, there are a huge range of factors to consider when entering the US market. Getting the basics right, however, will play a fundamental role in determining how effective any strategy designed to build a presence in the US will be. Some of the major opportunities and potential pitfalls include:
Embrace commonalities but recognize the differences
There is a huge amount of shared history and culture between Europe and the US. For English speakers, working without a language barrier delivers a tremendous head start. It doesn’t take long, however, for companies newly arrived in the US market to see the huge range of subtle and major differences that exist in the way the countries conduct business.
From employment law, visas and tax to payroll, compliance and a myriad of other operational issues, it’s vital to research the rules and requirements that are specific to the US. In some respects, the differences are narrowing and in recent years, the UK has become much more entrepreneurial – something which has long been much more common in the US. But overall, while it’s tempting to jump right in, especially if an exciting growth opportunity appears, failing to understand the fundamental differences can lead to serious problems down the line.
Hire local talent
The growth of remote working and the advantages offered by ubiquitous digital connectivity means that – in theory – it’s never been easier to identify opportunities for growth in markets like the US and hire people, irrespective of where they are located. While it’s possible to build a customer base from thousands of miles away, in many circumstances, there remains no substitute for ‘on the ground’ knowledge and experience.
Hiring local talent can have a transformative impact on the ability of a business to build credibility and presence in the US marketplace. Take the technology industry, for instance, which is a hugely competitive sector, but also offers new entrants the chance to quickly build sales momentum. In this context, organisations with the resources to build local teams – even small ones – will almost always be better placed to understand the domestic US market than those looking from the outside in because it gives them a much better insight into key issues such as sales practices, much bigger contact networks and the irreplaceable knowledge around simply how to get things done.
Business leaders should also remember that building trust via a local team does not mean they can then work at arm’s length. UK and Europe-based management must show long term commitment by supporting their regional teams in person as travel rules allow.
Build effective partnerships
It’s a similar story with partnerships, which can operate on a few levels to help nascent international businesses supercharge their efforts to crack US markets. Innovation is a major part of the US business psyche and there are organisations in every sector that are open to working with businesses from the UK and Europe to bring new ideas to the local market.
The problem, of course, is where to start. Reaching out to US companies who look relevant can bear fruit but building a broad contacts list and effective networking is likely to create better opportunities. Don’t forget that the US is a massive market, so many businesses based over here find it’s useful to build both regional and national partner networks.
Don’t lose focus on core business
Replicating domestic success in new markets is among the most exciting challenges any business can take on. This is particularly true for organisations focused on growth in the US, where building momentum really means the sky’s the limit.
It’s important, however, to recognise that business expansion of this kind takes a massive amount of commitment and resources. This doesn’t just mean financial investment, it’s also about the time required of organisational leadership and key members of the team who are tasked with supporting growth.
In doing so, businesses must not fall into the trap of neglecting their core market, customers and their wider ethos. Leaders must never lose focus on the reasons that drove their domestic success and balance their ambitions to grow against the need to remain grounded.
Don’t go too big too early
One of the biggest mistakes a UK or European business can make in focusing on the US is running before they can walk. Implementing a growth strategy for such a huge market is an attractive proposition but getting it wrong at scale can be disastrous. Instead, starting with more manageable, smaller goals may result in slower revenue growth but can allow the business to learn valuable lessons over time without the danger of overextending itself or running out of resources.
Seek out help and support
For SMEs, it’s particularly important to seek out advice and guidance, which can play a pivotal role in helping avoid mistakes and to explore the practical and financial support that is available. There are many useful sources of advice and support for UK businesses who want to target markets in the US, some of which include:
- The Department for International Trade
- The U.S. Embassy and Consulates in the United Kingdom
- BritishAmerican Business
Building these considerations into planning and preparation can help businesses on this side of the pond put a solid foundation in place for success in the US. Success is hard-won, but the returns have the potential to be greater