6 mistakes made when starting a business in America

06/02/2017 | Posted by:

Don't make these mistakes when starting a business in America

If you’ve made the decision to explore the US market, you’ll be aware of the fact there are various things to consider. Logistics, employees, office space, warehouse rental, marketing – the list goes on and on. But, you’ll also be aware of the fact there’s a great deal you just don’t know, and many mistakes you could accidentally make along the way.


To improve your chances of success, here is a list of six common mistakes that businesses often accidentally make when starting a business in America. Read up and remember that knowledge is power – once you know where the pitfalls and traps are, you can plan to avoid them.


Not conducting US market research or doing competitor analysis

Business might be booming for you in the UK, but how can you be sure you’ll do as well in the US? This isn’t said to deter you from starting a business in America, but it’s included at the top of the list to remind you of the importance of doing thorough research before you enter a foreign market. Begin by conducting market research (are you sure there’s a demand for what you’re offering?), and be sure to do some thorough competitor analysis too. You’ll need to persuade US customers to pay for your goods or services rather than your competitors, so you must be confident that you can offer something that sets you apart from rival, home-grown businesses. 


Not altering the product or service for an American audience

Another mistake that businesses sometimes make when starting a business in America is simply giving a US audience the very same product offered a British audience. While there are lots of similarities between customers in the UK and those in the USA, there are still some fundamental differences you’ll need to account for. So, don’t make the mistake of ‘introducing’ your UK brand to an American market – evolve it instead.


Simply setting up a US branch office of the business

Do you know what else businesses sometimes get wrong? Simply setting up a US branch office. While it’s an easy option for many foreign businesses looking to expand overseas, it’s often the riskiest way of all: it exposes the entire business to taxation and liability, which can spell disaster. Instead, either use the services of a company such as us at Foothold America to test the US market, or establish a separate subsidiary company.


Not hiring US workers

If you’re starting a business in America, don’t just send your British employees to work in the US. While it’s perfectly fine to relocate your existing employees (provided they meet the requirements to live and work in the USA), you’d also be wise to hire some US workers too. US workers are invaluable: Americans are tenacious workers and come armed with first-hand experience of what the US market requires. When these traits are coupled with their ever-growing knowledge of your business, you’ll find they’re invaluable assets. Don’t make the mistake of not asking for their input either: if your business is struggling or your US employees have ideas that could improve what you’re offering, why not listen to their opinions?


Only visiting to criticise

Also, don’t fall into the trap of only visiting the US to criticise. It’s important that you show the correct kind of leadership when expanding your business internationally, which means being a useful resource to a team (rather than a distant, overbearing or critical figurehead), as well as remembering to praise and thank employees for their hard work. You’ll always find room for improvement, but just be mindful of the way you communicate this – especially if you’re not frequently visible in the US.


Failing to designate a remote decision maker

A final mistake that businesses sometimes make when starting a business in America is forgetting (or choosing not) to appoint a decision maker. You’ll need someone you can rely upon to make tough decisions, exercise authority and have the final say on your behalf if you can’t be in the country. Doing so will prevent you from micromanaging aspects of the launch half a world away in a different time-zone, and will ensure your US business grows from strength to strength.


These are just a handful of mistakes businesses make when starting a business in America. There are other things to watch out for, such as choosing the right state to incorporate in, and understanding confusing terminology that’s often alien to UK-based businesses. But the good news is that all of these mistakes are avoidable – especially once you’re aware of them! Seek support and guidance from the appropriate people before expanding in America, and be sure to contact us you’d like to learn more about how we can help you too.