Thursday, 6 December 2007

Exporting to the USA

Love it, or hate it, the USA should not be ignored. The economy is larger than the whole of Western Europe. Individual states have economies larger than many countries. California equates to the UK or Italian economy in size. New York State equates to China and Brazil.
Since 1948, the USA has been one of our top five export markets. It is our largest single market for both visible, and invisible exports. The UK and the US is each the largest investor in the other.
The biggest mistakes that new exporters to the USA make are:
  • Underestimation of the sheer size of the country.
  • Insufficient dedication of adequate management time/resources.

To succeed, concentrate management resources to win.
This requires planning and research. It is best to choose one state where there is a potential concentration of business, and then expand in gentle concentric circles. It takes time to enter the most competitive market in the world. Think in terms of ten years and plan for five.


Suggested methodology:

  • The home page of the US Small Business Administration (www.sbaonline.gov) gives access to good pro-forma business plans (see Starting, Expanding, Marketing buttons).
  • Use the gaps identified as a basis for your research.
  • Define your potential target organisation closely.
  • Identify the US Trade Association to which they belong. Obtain the directory.
  • In which state are the membership concentrated?
  • Is there a trade show(s)/convention that the Association sponsors?
  • Amongst the associate members, are there candidates for distributorships, or consultants that could provide in-depth industry research?
  • Is there a trade press issue that is a gazetteer of the industry?

Some useful do's and don'ts:

  • Use US legal advisers for your GTS, distributorship, other agreements.
  • The US is litigious. Their legal system and language is different.
  • Obtain adequate product liability coverage.
  • Can you sell your product in seven words? Americans have a short attention span.
  • Everyone targets the US. Buyers are only interested in cheaper supply, a better technology, but demand commitment to the market.
  • Quote only in US dollars, c.i.f. to their doorstep.
  • Metric measurements are alien to most Americans.
  • In all communications, avoid English colloquialisms. They will not be understood.

To be successful you will need three essentials, the right product, sufficient financial capital and adequate management resources. If you are missing one, my advice is don't attempt the market. If you have them, go for it!

Bob Smeaton is an occasional lecturer at Farnham Castle International Briefing Centre. He is also an Export Promoter, i.e., an external commercial adviser, for the North America desk of Trade Partners UK, the export branch of the Department of Trade and Industry with more than 30 years of direct experience with the USA and Canada including working and living in California, Texas and New York. May 2002.

1 comment:

Kyle & Svet Keeton said...

So many countries in the world are tied very deeply with the dollar. Russia is having inflation being triggered by the dollar. Over in Russia the saying being translated from USA is:

It might be America's Dollar but it is your(Russia's) problem!

Kyle and Svet