With nearly 330 million people and 15% of the global economy, the United States is the largest market in the world. Little wonder that many foreign companies set their sights on the United States early on when thinking about expanding to new markets. From benefits for employees to U.S. labor laws and regulations, hiring employees in the U.S. can be a bit overwhelming.
Many companies run into trouble when they expand to the U.S. in an ad hoc way and neglect strategic preparation. The good news is that doing your homework and proper planning can help you maximize your success in the U.S. market. Read on for tips for companies expanding to the U.S.
Review Your Company
What is your human capital plan upon expansion to the U.S.? Consider these elements:
- Capacity to Expand – Do you have the capacity and resources to expand to the U.S.?
- Leadership – You may need to appoint a senior dedicated executive to manage your U.S. business.
- Your Team – Do you have the right marketing, sales and other human resources? Do you know what benefits for employees you should be offering? Outsourcing human resources is a smart move. From assistance in choosing employee benefits packages to benefits administration, it is a key piece to attracting and retaining quality talent.
Create a Market Entry Strategy ~ Factors to Consider When Choosing Your Company’s HQ
It’s important to understand that the U.S. isn’t a single, homogeneous market. Instead, it’s a patchwork of local markets with different regulations, logistics, laws, business cultures and consumer tastes. In addition, labor laws and regulations are different in each state and jurisdiction. This, along with compensation expectations and talent availability, will play into your decision on where to plant your U.S. flag.
In short, cost, talent and culture are the three factors that should determine where a company settles down. Each of these aspects will have its pros and cons, so you must weigh your choices carefully before selecting your company’s HQ city. Here are some questions to ask to make an informed decision:
- Do we need to see people in person? If the business operates entirely online, this isn’t much of a factor. However, if meeting people face-to-face drives revenue, take it into account before moving somewhere that offers fewer customers.
- What level of talent can we get and for how much? Do employees need to come to the office every day, or is telecommuting an option? Which cities have clusters of talent related to this field, and how much does the average employee there cost? How do employee benefits compare?
- What is the city’s culture? Not only does this have an impact on the type of talent that is available but also how other companies in that city might help you succeed. Is the culture competitive or cooperative when it comes to partnering with other companies?
Once you settle on two or three high-potential states or regions, you can attend trade shows or business events to learn more and make contacts, then pick the market with the best opportunities for your company. .
Whether you are offering a physical product or a service to the U.S. market, preparation is key to your success with your global expansion.