Welcome To The U.S.
Don't miss out on the world's largest market
A Top-Priority Expansion Opportunity
For many companies, the United States (U.S.) is the ultimate goal and the market that can help them secure their future success, making it a priority at an early stage. The reasons for this range from the fact that it is the largest economy in the world, to the fact that it is more easily accessible than many companies believe.
The world's largest economy
Since 1871, the U.S. has been the world's largest economy by nominal GDP and it is also the second-largest by purchasing power
parity (PPP). Current trends show that it is expected to continue growing steadily over the next few years, outpacing many other
western countries. Its labor market has strengthened, and so has consumer spending in the country. The U.S. is often dubbed as an economic superpower and that's because the economy constitutes almost a quarter of the global economy (see chart from IMF), backed by advanced infrastructure, technology, and an abundance of natural resources.
The strongest and largest economic states in the U.S. include California, Texas, New York, Florida, and Illinois, which together represent around 40% of the country’s total GDP. California is the largest economy today and has grown for the last 50 years. Now, its market size is comparable to that of the United Kingdom. Every state plays a role in the bigger picture, but some states such as New York and California have an outsized impact on fueling the country’s overall economic engine.
The U.S. consists of many different flourishing B2C and B2B markets, each with distinct tastes, purchasing behaviours, distribution systems, regulations, and climates. Business and consumer practices not only vary from state to state, but city-to-city and town-to-town. Household spending is the highest in the world, accounting for more than a quarter of global household consumption.
The economy is market-oriented: Private individuals and business firms make most of the decisions, and the federal and state governments buy needed goods and services predominantly in the private marketplace. U.S. business firms enjoy greater flexibility than their counterparts in Western Europe and Japan in decisions to expand capital plant, to lay off surplus workers, and to develop new products.
A more easily accessible market than it is made out to be
The U.S. offers foreign companies a large, easy-to-access marketplace if you adopt the right market entry strategy and follow legal rules and regulations. Selecting the right go-to-market- strategy and collaborating with the best U.S. partner for your product and market is important. To be successful, the goal is to connect with partners that have the technical and financial capability to support your product, and the right market entry strategies to reach your target customers.
Overall, the country is relatively free of quotas and non-tariff barriers, it is open to imports, and has well-developed distribution channels to customers. Together with its massive size and growth potential, the U.S. is a lucrative market for foreign companies and should be prioritized as such.
"...the reality is that for most companies, looking internationally is a must in order to grow to the extent they aspire to."
Challenges - And How To Overcome Them
It is clear that many European companies (including those from the top three EU Innovation Leaders Sweden, Finland, and Denmark, source: European Commission) face great opportunities in the U.S. market. However, many decide not to pursue them, for different reasons. Ask yourself this: Have you ever thought about expanding to the U.S. (or elsewhere) but found your company being held back by a product or service not yet ready to enter the market, constraints in time, personnel, or financials, or the uncertainty and perceived risk of entering a new market? If so, you are not alone.
Many smaller companies that we have talked to voice concern about the U.S. being a risky market, having heard horror stories about lawsuits and legal battles. Others find it hard to allocate the time necessary as their management and board are already incredibly busy. Yet others realize that both the physical and cultural distances between Europe and the U.S. create a barrier, as does the lack of market knowledge.
And finally, some just don’t know where to start - or if the U.S. is even for them. But the reality is that for most companies, looking internationally is a must in order to grow to the extent they aspire to.
Don't let these challenges stop you! We have the answers to your questions
These challenges are not reason enough to miss out on the largest market in the world. Below, you can find some of the most common questions we receive and how you can address them successfully. If you want any further assistance or ask more questions, feel free to reach out to any team member. We can help you navigate past these challenges in order for you to give this market a chance and realize your untapped potential.
How do we establish our company in the U.S. without a local presence in the country?
Entering a foreign market comes with a clear cut challenge - the inability to be in two (or more) places at one given point in time. Nevertheless, being physically present at the place of doing business is incredibly important for a few different reasons. First, although a lot can be done via video conferences, the in-person meetings still carry a lot of weight when building a relationship. Second, the ability to answer promptly to client concerns and provide aftermarket services increases significantly with a local presence, as would be assumed. Third, the overall communication quality improves when you are in the same, or similar, time zone as your client or partner. This problem can be solved in a few different ways.
Send over a person or team from the existing company to start a U.S. branch.
This can work for some companies (usually larger corporations) that have the ability to spend a great amount of money upfront to go all-in on the market. However, this requires that the person or team builds everything from the ground up, including establishing networks and connections. This is a risky venture since the initial investment is significant (usually in the millions) and is likely to take time to pay off, which makes it less of an option for smaller companies.
Have representatives from the company travel back and forth between Europe and the U.S.
This is a quite common approach among companies of all sizes since it is an option with lower risk involved. On the downside, this option provides a less frequent local presence than options 1 and 3 and the funds required to support bi-weekly or monthly travels, housing, and more, quickly add up. This is also a very time-consuming option, not allowing the traveler to focus on actual work as much as he or she would want to.
Partner with a local team or agent in the U.S.
By working with a local team, agent, or representative, you get access to an already established network and connections, making it easier to initiate and maintain relationships and make sales. Additionally, this ensures that you always have a person or team at your disposal close to the market and your clients, ready to provide customer service and answer to any concerns. Additionally, it allows you to focus more on product development, strategy improvement, or business generation in your home market.
What if we are not familiar with current trends in the U.S. and how business is conducted?
Like any international economy, the U.S. market changes rapidly and differs in many aspects from European markets. With this in mind, keeping up with current trends and the overall business environment is important, albeit something that can be difficult to do without extensive, prior experience.
Here are a few examples of how you can make sure you are staying up-to-date on what is important.
Vist U.S. news outlet websites to learn about the overall political, economical, and social environment in the country - and more, depending on what is relevant for your business
Read, listen to, or watch updates from stock market outlets as these tend to point towards general trends in the market
Speak to experts currently active in your industry, who are likely to have more in-depth information to share. After having been active in this market for more than a decade, we have learned to always keep our ears to the ground and stay up-to-date on the most important trends. We can also easily put you in touch with a multitude of experts ready to help you learn more about a specific industry or segment. Feel free to reach out to us if this is interesting!
How do we find trustworthy partners and
One of the most crucial ingredients in a successful expansion is finding the right partners for you and your business. In doing so, you can potentially benefit from an already established pool of clients, an existing distribution network, and a plethora of knowledge. It goes without saying that this can help you get a running start in the U.S. That being said, finding the right, trustworthy partners is not an easy task. Below, we talk about which partners are important for you to identify, as well as how to find them.
This is for many companies the most difficult part of expanding to a new market, but needless to say also the most important one. There are a few ways to find clients to start building fruitful, profitable relationships.
Do your own research and cold call potential leads
Visit trade shows and conferences
Utilize client relationships already established by a distributor
Utilize networks and connections already established by an expansion partner
Distributors, retailers, and/or manufacturers
As mentioned above, these outlets can be a huge difference-maker in getting you closer to your first clients. Additionally, they can help you put your product or service on the market in a successful manner through better marketing resources and prior knowledge. These can be found in a similar manner as clients, but it helps a lot to have someone vet and recommend these partners to you before entering a hopefully long-lasting relationship.
Outside of pure business development partners, it is important to also consider those who will help you build and maintain the administrative sides of your business. Having recommended our trusted partners to many clients before, we are confident that we can introduce you to the experts that you need. Some of the partners you should get in touch with include
Legal advisors, that can help decide the organizational structure, register your U.S. subsidiary, and draft and execute contracts with clients and partners.
Regulatory experts, for example, FDA and UL representatives, that can help you make sure your solution is up-to-date on current standards and certifications.
HR professionals, that can assist you in employer-employee laws and relations, should you decide or need to hire personnel.
Accounting experts, that can help with making sure applicable accounting laws and practices are followed and do your accounting for you.
IP commercial consultants and lawyers, that can help with making sure your IP is protected and help you explore and benefit from the commercial opportunities for your IP.
Insurance brokers, that can help to make sure protection is up to par, should anything happen in your client and/or partner relations.
What are the different investment and funding opportunities for a company like ours?
Financing an international expansion can be one of the most challenging aspects of it, which is why we find it important to touch on how to go about it. Should your company need more capital to support this venture, there are different options to pursue, both in Europe and in the U.S. If you want to read more about the financing services that we offer, please click here.
Whether you are in need of a seed investor, strategic investor, or a strictly financial VC, there are plenty of options in California and the U.S. Finding the right one and knowing how to talk and pitch to them can be a challenge. To make this easier for you, we can help you prepare your offering to suit the target investor and through our contacts and access to investor networks, we can secure your runway needs.
In some cases, loans may be the preferred financing method. However, securing a loan as a foreign company in the U.S. can be difficult. Therefore, we can help you guide you through this process together with the bank at hand to put you in the best potential position to be approved.
There are great opportunities to receive grants for U.S. business development, both from European and American authorities. We have been very successful in helping our clients prepare, apply for, and receive grants from tens of thousands up to millions of dollars.
What are the risks associated with entering the U.S. market and how do we manage them?
Many of our clients ask us about the stereotype of legal issues for companies is in the U.S. A common question is "How likely is it that we will have to face a lawsuit if we decide to establish in the U.S.?" And although this can happen, there are ways to mitigate these risks. A few examples are found below (definition source: Investopedia).
Operational risk is summarized as "...the uncertainties and hazards a company faces when it attempts to do its day-to-day business activities within a given field or industry". This can be especially apparent when trying to enter a new, unknown market. A great way to mitigate this kind of risk is to turn to professionals that have significant experience in running a company on U.S. ground.
Another risk factor includes legal or compliance risk, i.e. "not operating in accordance with laws and industry regulations". This is something that many companies worry about. The best way to avoid troubles in this area is to work with competent legal advisors, insurance professionals, and regulatory experts to ensure that what you do is up to par with the market's requirements.
Strategic risk refers to "not operating according to a model or plan" and can easily occur when entering a market of great uncertainty. This is likely to happen when there is a lack of a long-term plan to follow. Therefore, creating an appropriate strategy from the start is very important and it makes it more likely that the plan will be carried out, which we emphasize to our clients.
In a corporate context, financial risk focuses on "the possibility that a company's cash flow will prove inadequate to meet its obligations—i.e., its loan repayments and other debts". This is a major concern for almost any company venturing into a new market, especially smaller ones with limited resources. A great mitigator for this kind of risk is to apply a lean startup approach to the expansion process. This means to gather early feedback from the market in order to decide to maintain the current speed and direction, or to pivot. In doing so, it becomes less risky from a financial standpoint since it is possible to spend only the funds necessary to proceed.
"Challenges are not there to stop you, they are there to help you grow."
Industries We Operate In
Our focus is on Business to Business (B2B), including retail, for growth in the U.S. market for companies mainly in the industry sectors mentioned below. Please note that the categories represent a selection of industries and that our extensive network allows us to effectively provide value to companies in other industries as well.
Greentech and Sustainability Solutions
The U.S. is the single largest market for environmental technologies in the world, representing a quarter of the $1.2 trillion global market. The market is also among the fastest growing international cleantech markets. Much of what is happening in renewable energy, sustainable manufacturing, clean technologies, environmental industries, and green build is taking place in the Midwest.
Sample industry sectors are: Water, renewable energy, air pollution control and monitoring, waste management, and recycling.
The U.S. remains the largest medical device market in the world at $156 billion (40 percent of the global medical device market in 2017). By 2023, it is expected to grow to $208 billion. The trend in this sector is moving towards digital health, data, robotics, personalized medicine thanks to additive manufacturing such as 3D.
Sample industry sectors include: Dental equipment and supplies, electro-medical equipment, in-vitro diagnostics, irradiation, surgical/medical instruments, and surgical appliances and supplies.
Lifestyle and Design
The interior design and lifestyle market is changing. The demand for a more genuine, high-quality, natural, and sustainable way of living is substantial. Long gone are the days of buying items to be used and quickly thrown away - or forgotten. Instead, customers are looking for long-lasting solutions, preferring design pieces that can be passed on from one generation to the next.
GoToMarketUSA has extensive knowledge within this field, thanks to decades of experience. Please read more here.
IT and Software
The U.S. has the most advanced software and information technology (IT) services industry in the world. More than 40 percent of the $5 trillion global IT market is in North America, primarily the U.S.
Notable industry sectors include: Cloud computing services, AI, entertainment software, e-commerce, and more.
Machinery manufacturing is one of the largest and most competitive sectors of the U.S. manufacturing economy. Exports of capital equipment totaled $141 billion in 2018 alone.
Industry sectors include: Agricultural and food machinery and equipment, aerospace, automotive, construction, energy and mining.
Let's Explore The U.S. Market Together
GoToMarketUSA was founded on the belief that none of the mentioned challenges should prevent promising, innovative companies from helping to improve the lives of hundreds of millions of people. In each of these industries, and more, we can help you both early in the process by measuring and defining your U.S. market opportunities as well as later on creating your proper market entry strategy and first revenue streams. Read more about what services we offer to achieve these goals.