Steps to expand a business from Europe to the USA

Discover the strategic steps to expand your European business to the USA, seamlessly. Make use of growth opportunities, navigate regulatory landscapes, and thrive in the American market today!

Many European businesses are considering expanding into the US as they become aware of the significant constraints of their home continent’s economy and how the US opposes this. The United States is host to some of the world’s most talented minds, businesses, and commercial contacts, with regions such as the Northeast making up a significant number of Fortune 500 corporations. 

The opportunity to access new clients, utilize resources, and mitigate risk is unparalleled, but expanding to the United States is not to be taken lightly. There are numerous aspects to consider, as well as extensive planning required.  We have developed a detailed guide that outlines the steps to expand a business from Europe to the USA to help you assess whether the USA is the ideal target market for your worldwide expansion.

So, let’s get started!

Understanding Your Market

When you’re thinking about growing your business, the first thing to do is learn more about your market. Market research helps you find new areas where you could expand. It also helps you understand what your customers want and need for your products or services. Plus, it tells you about current trends that might affect your business. Knowing these trends helps you appeal to your customers more efficiently.

Choose a State 

Expanding to the U.S. is a significant change. It’s a large country with different time zones and geography to think about—even small details like airports and infrastructure matter. The state you choose can impact your business. So, think about the pros and cons of each location before deciding.

Every state in the US has its own set of rules for how businesses should be organized and operated. When you’re picking a state to register your company, it’s important to consider your target market’s accessibility, the availability of skilled workers, resources, suppliers, and the legal rules there.

Some states are well-known for their business-friendly tax regulations, which attract foreign businesses. While saving on taxes might be a priority, it’s not always the best choice to incorporate solely for tax purposes. This is especially true if it means conducting business in a different state than where you’re incorporated, which could lead to additional taxes and fees from both states. You should also think about other things like finding suitable suppliers and workers. 

Learn USA Culture

When businesses enter the U.S., they need to understand different cultures. Many companies fail in new markets because they don’t study beforehand or expect others to do things differently. If your culture is like the U.S., you’re lucky. But even if you’re confident, ask locals for help. Here’s how to avoid costly mistakes when expanding to the U.S.:

• Be respectful of American customs and beliefs. Even if you don’t agree with everything, it’s essential to be respectful of American culture.
• Be direct and assertive. Americans appreciate people who are direct and assertive in business.
• Be prepared to negotiate. Negotiation is a part of doing business in the United States. Be prepared to negotiate fairly and respectfully.
• Be on time for meetings. Punctuality is important in American business culture.
• Dress professionally. Business attire is very essential in American business culture.
• Be positive and enthusiastic. Americans appreciate people who are positive and enthusiastic.

Choose How You Want to Expand Your Business

Expanding your business in the US can be a dynamic journey, amplified through various channels:

Online Sales Channels: If you’re rooted in physical retail, unlocking the online realm is vital. Craft an e-commerce website using user-friendly platforms, directing SEO and digital ads toward a broader audience. Consider leveraging major e-commerce hubs like Amazon or eBay to bolster your digital presence. Social media platforms such as Facebook, Instagram, TikTok, and Pinterest can weave an expansive digital network.

Forge Strategic Alliances: Collaborating with synergistic businesses unlocks fresh markets. Identifying compatible partners might take time, but the goal is to discover businesses whose offerings complement yours without overlapping. This synergy fosters mutual growth without cannibalizing your unique identity.

Acquisition Strategy: Acquiring an existing business offers a shortcut to expansion. Seek businesses that complement yours and boast financial stability. Analyze how this acquisition fortifies your operations – does it tap into new clientele or diversify your product line? Financial feasibility should align with your growth ambitions.

Franchising: If your business model has the potential for replication, consider franchising. This intricate approach involves licensing your blueprint to others, who then vend your branded offerings. While it demands investment and complexity, franchising can catapult growth at an accelerated pace.

Finding a Foreign Distributor

If you find a foreign distributor in the USA, it will make things easier for you. You sell to them, and they sell in your desired country. They serve foreign customers well and buy your products. To find a distributor, look at trade groups, foreign chambers of commerce, different social media in the U.S., and American chambers of commerce in your country. A good distributor has a history of selling to your target market. Before deciding, meet them and check references.

Choosing the Right Structure 

Companies that want to grow in the US can pick from different ways to set up partnerships, Sole Proprietorship, C corporations, S corporations, and LLCs. Even though each has good and bad points, most companies will like LLCs because they have many good things.

For one, you don’t have to be a US citizen (or even live here all the time) to do business in the US. This helps many owners because their personal things are protected if something goes wrong with the business, and they pay less in taxes. LLCs also give owners many choices in managing things and don’t need too much paperwork.

Do Paperwork

The papers you need change from state to state, but you’ll usually have to do four kinds: papers to start, papers about how things are run and owned, papers for taxes, and papers to check things out. You’ll have to do an Article of Organization to start your business.

Owners also need to give details about agreements with shareholders and each shareholder.

Updating How You Work

The next step for expanding your business is to look at how you do things now and make changes if needed. For example, growing might mean you have to do things differently when you bring in new clients. Your company’s way of doing things, called protocols, should match these changes. This is important so your employees can make the right changes, too. Before you expand, you should also update your rules. This helps your team get ready for the changes and understand what’s coming.

When you make changes, you must tell your employees clearly and early. This way, they know what’s going on and what to do. Adjusting to new rules might take some time, so good communication matters. Whenever you change the rule book, ensure everyone on your team can read it immediately.

Prepare to Present in Front of Investors

Getting ready to present your idea is crucial. For businesses from the UK and Europe aiming to attract US investors, it’s essential to remember that US investors prefer to see success in the American market before they invest, especially for startups. When you’re pitching to US investors, remember that there are distinct cultural differences. 

While UK and European investors value authenticity and financial discipline, US investors look for confident pitches and a clear plan to achieve significant success. This is because US investors expect many investments to fail, but the ones that don’t should have remarkable returns.

In contrast, UK private equity investors expect a higher rate of return from their investments. So, when presenting to US investors, make sure your investment story aligns with their expectations, focusing on ambitious growth and potential rewards.

Following the Rules

As you plan to expand, you must also follow the laws and rules. If you’re opening up in a new place, you need to know the local laws for things like jobs. These laws could be different from where you started. You’ll need people in your team who know about these laws, like a Human Resources team, to help you do things right.

If you’re adding new things to your business, like products or services, you must also check if they follow the rules. This is important so you can sell things legally and make them safely. This is good for your business and those who buy from you.

Hire and Train Your Employees

Having U.S. employees is excellent for your business. They help you understand the American market and support your customers. The U.S. has skilled workers, so your business will be in good hands. Hiring U.S. workers makes expanding to the U.S. easier.

When you expand, you might need to change how you train your existing employees. This could be because the way you work is different or because of new rules. Jobs that didn’t exist in your business before might need new training. For instance, if you hire or promote someone to manage the original place while you take care of the new one, they need special training. This training is different from what new employees need.

To make sure everyone learns well, you can work with your Human Resources team, let higher-up employees help, or write down how things should be done. This way, your employees can look at it whenever they need to.