Expanding a business globally is an important decision for organizations in their growth cycles, and often requires meticulous planning and strategizing to be successful. When it comes to expanding a business into the complex and competitive US market specifically, companies must get the strategic, operational, and legal aspects right from the beginning–there’s little margin for error and missteps can be quite costly. Unless you have extensive experience with US expansion, you will probably have a lot of questions on key considerations for successful market entry. We have created this post as an introduction to what you should keep in mind when considering expansion into the US.
Product Market Fit in a New Market
It is paramount to consider the product and services you are looking to offer in the US in terms of the local competitive landscape. Pricing and positioning might also differ in the US compared to your local market. These components can make a big impact on the success of your U.S expansion. When thinking about all this, your team might have questions like “What is my Ideal Customer Profile (ICP) in the US?”, “Who are the competitors in this market?”, “How will I reach customers in this new market?”, “How can I start hiring locally?”, “How can I build a team of top and diverse talent to help accomplish my company’s mission?”, What are all the steps required for this?”. There are a multitude of questions to be answered and, without local expertise, it could take months if not years just to plan out the initial steps. However, by working with a local partner, such as Alariss Global, product-market fit can be determined much faster as the local partner helps companies identify the value and market positioning of their product and services for US customers. Our growth experts have the industry knowledge and expertise to advise you on the best next steps, which can leverage through a skilled salesperson to accelerate your growth in the US market.
Legal and operational complexities
According to an article by Blue Marble Payroll, there are many legal issues to consider when expanding globally – creating new entities, tax implications, employee hiring. As you may know that the US has many specific laws and regulations, including ones that differ between all 50 states, so it is critical that strong legal processes are built as quickly as possible. With US expansion, issues like labor laws, health, and safety need to be taken care of appropriately. So, being proactive in this case would be wise, and it is difficult to anticipate all local requirements without either an expensive law firm or a partner that can handle matters on your behalf As one example, Alariss Global serves as the Employer of Record (EOR) platform for clients and handles legal compliance, taxes, and payroll issues for American contractors and employees to reduce our clients’ regulatory burden and to help them expand quickly and cost-effectively in the US market.
Return on Investment
Another thing you must consider is how much it will cost the business to expand to the US in comparison to how much you will be selling your product and services in your home country. For a good ROI calculator, you can check out our blog post on the subject. Microsoft said that one advantage of expanding is growing revenues and therefore reducing cost through economies of scale. And as your business reaches higher levels of scale and reaches a larger customer base, your ability to access capital and to increase your valuation will grow as well. As your business becomes more profitable, the capital can be reinvested into further expansion. The US is a lucrative market, and the new sales you generate in the US will have a continued positive impact on your company.
Planning and Execution
Your business could have new potential as expanding into the United States offers businesses access to the largest economy in the world and the revenue generated enables foreign firms to also engage with investors to scale their business. As the US economy looks to restart post-COVID-19, businesses will look for digital products that will allow them to improve their productivity and efficiency, which means opportunities for new market entrants. As a result, this is an ideal time to begin expansion. You need to establish a go-to-market strategy for your business to effectively highlight the value proposition for customers in the US, which might be unique from the value perceived by your domestic customers. In case you are looking for a success story for US expansion, the Australian tech company, Canvas, is a great example. As several US tech companies began to scale and more established businesses looked to increase their online presence, Canvas saw an opportunity to serve them with an easy-to-use design platform. Through greater exposure and success in the US market, Canvas has been able to leverage its US partner network to go global in 18 countries and is now valued at $6 billion–a far higher valuation than if they had remained purely a local Australian company.
If you are thinking about expanding your business into the US market, and you’d like assistance with building out your local team, please reach out at [email protected] or fill out our form at alariss.com.