Over the past several years working at Takehill B2B market entry practice, I have been asked these same questions so many times, that I decided to put together this updated checklist: how to improve your odds for successfully crossing the pond to US market? Here you go:
Fact vs. Assumptions. Before you start executing your US-market-entry plan, spend some serious time in separating your assumptions from facts. Do not assume that repeating your previously successful European model will automatically work in the USA. Because it will not. Speak with multiple US prospects and partners, travel to US or hire a local help.
Action #1: Dig up the FACTS from the US market to validate your business model assumptions. Yeah, it’s called market research.
Target customer/buyer profile. The way US organizations conduct business and the way they buy products are often different compared to EU counterparts.
Action #2: Go BEYOND your assumed US target audience, re-define your target buyers vs. users, and tailor your marketing message and story directly to US targets.
The problem-solution fit. With American clients the market environment, regulations, standards and local best practices may be just slightly different to EU, but it can make a big impact on the value proposition and your ability to attract customers.
Action #3: validate the problem/pain vs. solution and ROI specifically for the US customers
Differentiation. This is the #1 landmine that kills EU companies when entering America. The U.S. competition is 10x fiercer vs. EU and competitors’ marketing-spin is super aggressive vs. European fact-based messaging. American enterprise buyers also rather buy from American vendors, as long as the product is “good enough”.
Action #4: research the US competition & competing methods, define and quantify your unique advantage and promote it boldly.
Business Development Cycle. If there are no inbound leads coming in on day one when entering the US, it may take extended time to find first partners and customers. B2B outbound prospecting success rate is on average 5%, i.e. when you contact 20 target prospects, one of them may be interested. In the US B2B environment, it may take months rather than weeks to find someone with whom to start a serious dialogue.
Action #5: To expedite finding your first live contacts, hire a local US expert. Someone with a domain specific business lingo will maximize your street credibility.
Sales Cycle. When targeting enterprise clients with $100k…$1 Million solution, expect an average sales cycle from 6 to 12 months. This is: AFTER you have first found the prospect who is interested in speaking with you.
Action #6: prepare to be patient, with at least 12-month US market entry budget
Procurement. With US Fortune 1000 folks, nothing is simple. In closing a deal, you will often experience a complex procurement process, vendor certification, IT security audit, insurance review, several legal contract drafts, reference customer calls, and more. The contracting is typically required in the US standard legal language and format. Introducing your EU contract templates will just delay the deal, and you will end up with US legal agreements anyway.
Action #7: When in procurement/contracting stage, hire a US contract lawyer.
IRS. If you are selling from EU but have any operations in the USA, you may be surprised that at some point the US IRS goes after your EU HQ to collect tax money, claiming that you have been in business in the USA and are avoiding taxes!
Action #8: Before closing deals, hire a U.S. CPA to discuss taxing and company structure
Operations. When running the business in the USA, you need a US bank account, which requires either FBI-type background checks for all your EU team members, or a friendly US citizen co-signing the account. Local bookkeeping is required, and someone to file the tax return. And when you hire your first local employee, you need a service running the payroll and benefits programs.
Action #9: after getting the first PO and before hiring anyone, hire a U.S. accounting firm
There. I hope this is helpful. The process has lots of details, but it’s no rocket science. A simple, lean market-entry approach is always best for lower budgets and best agility.
You can and you will be successful, if you do the right things in the right order. And if you have doubts, call Takehill Partners to discuss. With over 20 years of experience, we can review your plans quickly and give you the sanity-check feedback during the first call.
Antti Korhonen is the Founder of Takehill Partners LLC, a Boston based consulting firm. He has helped several European companies entering the US market, and as CEO has built two successful B2B Technology companies with global operations between Silicon Valley, Washington DC, Boston and Helsinki. He lives in Concord, MA, and after spending 12 years in USA he is a dual citizen of USA and Finland.