Now more than ever, opening a business or trading in America can seem a daunting prospect. Yet the United States remains one of the most positive and fruitful climates for businesses, and may become even more favourable for those employing in the country, as the Trump administration turns to local businesses rather than international trade partners.
But before you make the jump or schedule that conference call, it might be useful to brush up on the fundamentals of starting and conducting business in America. Here are five vital tips covering the US business spectrum in all its wonder.
1. Know the difference between federal, state and local law
Businesses moving from countries where a central government has complete legal primacy may be in for a surprise in America. Federal laws hold fast across the country, while state laws are decided by each individual state legislature. Some smaller districts within states also have their own laws, though these are mostly limited to renting, leasing and specific safety requirements. Federal laws include rules on immigration, discrimination, patents and copyrights, and bankruptcy. While new federal laws do not come into effect too often thanks to the glacial Congressional system, they can be reinterpreted by the Supreme Court, and occasionally flouted by states.
State laws meanwhile include stipulations on tax, business contracts, worker compensation and real estate. The former is naturally a massive consideration for any business, and tends to follow the format that the more notable a city is, the higher the taxes are. New York for instance offers an excellent climate for female and minority led startups, but is in the bottom 3 states for business tax arrangements. Denver, Atlanta and Richmond (the birthplace of Microsoft) are examples of relatively up-and-coming cities in states that offer a good balance of fair legal frameworks, ease of setting up and the availability of labour and other valuable resources.
The best state for starting a business is a point of much contention. Many Fortune 500 companies are based in either Nevada or Delaware, but what is best for a large business won’t necessarily suit your SME. Nevada does not have any corporate or personal income tax, but neither do South Dakota or Wyoming, and Florida also accommodates for certain types of business. New Hampshire meanwhile lacks a sales tax or individual income tax, while Montana has favourable property and corporate income tax rate. Physical location may also be a major consideration, so further research is advised to ascertain the best combination of factors.
2. Open yourself to new ideas, don’t rely on assumptions
It’s not quite ‘forget everything you know’, but it’s not too far off either. For all its admirable diversity of people and products, America can be a rather parochial place to do business. You can’t take it for granted that people will get your idiosyncratic analogy, relate to the example of a foreign business or CEO, or have an innate understanding of an alien product.
The US has a reputation for hosting big tech companies and other advanced industries, but take-up of their products among the populace can be slow. Amazon is a dominant force in a $300 billion industry, and the US has led the way in online sales with its Black Friday deals.
But people are also a little more set in their ways when it comes to online shopping. Older people have not yet made the transition to e-commerce in the same numbers, and adoption of new e-commerce technologies has been more focused than European countries (for example,‘click and collect’ only just taking off as a branching concept).
Many online services are popping up in Europe or Asia first, with America seen as needing more consideration and planning. Take Spotify for instance, which started in Sweden and expanded to most parts of the world several years before it became just as ubiquitous in North America. Many in the US doubted its ability to penetrate the market, and they company initially struggled to get record labels onside.
But Spotify started winning the battle for public appeal by targeting a demographic abandoned by its competitors and the record industry – young people. The rise of piracy and YouTube had convinced many that 18-24 year olds simply weren’t prepared to pay for music anymore. Spotify bucked this trend with a novel ‘free trial’ approach, demonstrating the breadth of its content compared to rival services. You might call it the Netflix effect. It’s a perfect example of looking at a market and finding a way in where others have been rebuffed and given up.
As a foreign national, something which seems normal and ingrained in your everyday life might be an unknown quantity to your consumers and partners. That doesn’t mean it can’t be successful, but the relative conservatism of many consumers might mean you have to work harder to convince them. In this sense, launching a familiar product in a crowded sector can be a safer bet, as the appetite for it is proven (and often insatiable).
3. Don’t assume people will understand you
The stereotype of Americans as brash and direct is not entirely fair; nor is that of British people as reserved and wry. But stereotypes tend to form around some grain of truth. The differences between British and American English aren’t always obvious, particularly to Americans, who aren’t exposed to as much British media as vice versa. As such the subtler quirks of British English can go completely unacknowledged and leave massive gaps in understanding.
Fortnightly is a well-known example of a linguistic difference, but any time you would normally expect people to understand something without clarification, clarify it anyway. This extends not just to turns of phrase but entire modes of speech. Don’t assume that something said in a particular tone will be taken as intended, and take care that your accent is being fully deciphered. Sarcasm is an obvious point of contention. In short, speak as plainly as possible. If there’s a simpler way to make a point then say it that way, even if it might appear patronising.
It should go without saying, but always be courteous with everyone you meet within a business. US business structure is hierarchical but individuals also have a level of autonomy, and will actively make suggestions and discuss issues with their boss. A discussion with an employee will be quick to make its way up the chain and could embarrass you later on.
Much like political discussion, attempts at comedy should be sparing and extremely well considered. At best, a joke that falls flat is going to affect the tone of the discussion to come, and potentially your own confidence. At worst it’s going to offend someone, and potentially make its way the ears of other business partners, affecting your broader reputation.
Sometimes humour is more of a natural reaction than a deliberate ploy. British self-deprecation and humbleness can often tip over into self-flagellation without even realising it. Your intention may be to show deference to the locals in order to ingratiate yourself, but it may just come off as appearing weak, unconfident or uncertain about your proposal. Dominate the conversation, establish the tone and form solid relationships through streamlined conversation before you open yourself up to more personal relationships.
4. You can sell anything with the right approach
Perhaps this is a given, and perhaps it’s not in your nature to give up on anything. But there is a unique and attractive quality to America for any business: rampant consumerism. The business friendliness has created massive competition in every field, but business is simultaneously less cutthroat. Many products exist alongside each other successfully, and big companies will often refer suppliers or service providers straight to their rivals if they’d be a better fit.
In essence, there’s no product or service that you can’t sell; you might just need to change your methods. A foreign product might need an American twist or something to make it more familiar, binding it to an aspect of daily life. The prestige effect of foreign brands means less in the US, so the more American you can make a product feel, the better it is likely to do (even if it’s designed and manufactured in China).
Likewise, be aggressive in the way you pitch and sell it. Money talks, as does confidence that you’re going to make a lot of it. Being upfront about your plan and your passion will work wonders with business partners and customers. There are a million stories of all-conquering businesses that started with one aggressive door-to-door salesperson. You might have higher aspirations and a better head start than that, but the principle is the same. Work hard, focus on your goal and don’t take no for an answer. That confidence in the product is vicarious.
5. Don’t be blasé about making mistakes
“Everybody makes mistakes” is a phrase that’s been excised from the US business lexicon. With so many businesses out there and some of the longest working hours in the world, everybody will expect you to give 100% at all times. If that dips or you suffer a blip as a business – failing to deliver to deadline for a client, for example – that can be the end of that particular relationship. And the closeness of competing companies can close off entire avenues of enquiry.
That oughtn’t be as scary as it sounds; it should be difficult to make those kinds of significant errors if you run your business effectively. Come in on time, answer phone calls and generally make yourself attentive and accessible and you should be fine. But it should act as a note of caution that while you can start a business from nothing and make it big, influence and loyalty between business partners is less steadfast than in Europe, with the chief focus on results.
Other companies will not hold you in any animosity, but they also won’t be overly reliant on you, even if you’ve had a relationships for years. Ultimately American business is all about the bottom line and what you can offer. If someone else is offering something better, they won’t be slow to replace you. The good news is that they’ll be just as quick to pick you back up when you make yourself a more competitive proposition.