By Jason Kumpf is alliance manager at OFXThe US is the largest, most competitive and technologically advanced economy in the world. With 360 million consumers who all operate in an open economy, speak English and have an appreciation for quality British products, the US is understandably an attractive export destination for UK businesses.
However, there are important differences to be aware of. The American business culture, current trade regulations, and local tax and legal systems are all completely different to those in the UK and, although the national economy is huge, the US is comprised of 50 very different states, each with nuanced markets that an exporter needs to understand. To be successful, businesses need to walk before they can run, and make sure they get the fundamentals right when entering the US market.
Do your researchBefore launching in the US, UK businesses need to check out the established competition and decide whether there is a gap in the market for their product. It may be that UK companies want to play up their “Britishness” to carve out a niche for themselves, or come across as a local company to better suit consumer tastes and needs. Regardless, top of mind throughout should be the question: “Is there a customer for my product here?”
Find a trusted partnerPartner with experts who can support you from day one and help avoid the early pitfalls that can set you back months. The Department for International Trade (DIT) has an extensive network of specialists that can provide advice and support to UK businesses on the ground, while local chambers of commerce can help you to form connections with the business community in most US cities. There are also a host of industry events and conferences where entrepreneurs and investors can share their insight and build their network.
Sell with confidenceIt’s a well-documented difference between the British and Americans, but one worth addressing – most British businesses are inherently modest compared to self-confident American competitors in the same space. UK exporters would do well to adapt to this level of business confidence, and not be understated in their approach.
Additionally, “Brand Britain” is often well appreciated in the US, and there is huge respect for UK businesses from US investors. So if you’re a British business with a local story to tell, emphasise it in your marketing strategy.
Protect your revenuesSelling overseas means taking payments in foreign currencies and it’s easy to lose out to bad exchange rates and slow transfers when moving international revenues back to sterling. A good first step for doing business in the US is to open a local currency account which will save significantly on transaction fees and margins when bringing revenue home. Forward contracts are also a good tool, allowing you to lock in favourable exchange rates with an FX provider and secure the cost of doing business.
On paper, the US represents a massive exporting opportunity as it is a market not too difficult to understand. However, it requires planning and a considered approach from UK businesses for them to be truly successful.