Every U.K. company wants to gain immediate traction in the American market, generate revenue, and turn a profit sooner rather than later. The United States represents a rich market with endless opportunities. Like any foreign market, it can also quickly become a maze.
Determining Your End-Game In Advance
Before charging into an effort to enter the American market, I highly recommend that you determine your end-game in advance – how can you best monetize your entry into the American market?
Your ultimate objective may be to:
• generate some sales in a new market and test the waters
• establish a relationship with an American agent or distributor
• establish your own physical distribution facility in the United States
• establish your own physical presence or manufacturing operation in the United States
• some variation of the above.
This decision is crucial because it will shape all tasks that follow. For example, let me briefly contrast two strategies from the above list:
1. Generate some sales in a new market and test the waters. This option is the least complicated and can be implemented quickly. Many U.K. companies can simply start generating U.S. leads by targeted Internet marketing and search engine optimization. At the outset, you're trying to determine how much of a market exists in the U.S. for your product/service and how you can best reach your target market. As you gather more experience with the American market, your focus may rapidly shift to one of the other options.
2. Establish your own physical presence or manufacturing facility in the United States. This option is far more involved than testing the waters. You'll need to determine the best physical location within the U.S., lease or buy a site, establish a U.S. entity, hire staff, comply with employment law and other legal requirements, and address local, state, and federal taxation
The expense of implementing either strategy can be substantial and it certainly pays to get it right from the outset.
Identifying Your Target Market
What is your target market? Do you plan to sell: (i) directly to customers/clients, (ii) via an agent, (iii) through a distributor, (iv) in conjunction with a joint venture partner, or (v) through some other channel?
This decision also has far-reaching consequences. What works in the United Kingdom and the European Union may not necessarily work in the United States. Failure to identify your target market at the outset of your entry strategy can result in a substantial waste of time, effort, and money. Plus, if your effort gets off on the wrong foot and results are slow, enthusiasm for the American market will decline as frustration inevitably builds. There must be an analysis of how to reach your customer/client in the most effective, most efficient, and most profitable manner.