Business in Making Business in USA:  the truly land of opportunities?

Last April 5th, within the regional seminaries in MADI, Doing Business in USA, Ignacio Bartolomé, partner and founder of the company How2go, was with us to deal about how to do Business in USA.

The United States of America is one of the most difficult markets Spanish companies can deal with. This is surely because it is not just a single market but 50. We could say every state could be comparable to a country within the European Union, consequently, life expectancy for a SME or a small multinational company completely depends on an appropriated study of the selected market.


Thefirst part of doing business in USA is take care that every state owns different culture, politics and legislation which gives them differentiated capacities. Some people majorly promote infrastructures projects and others provide further incentive to other goods or services, being resilient in both tariff and non-tariff barriers. Moreover, counties have own legislations providing them autonomy and differentiation from the other ones.
At the beginning, the idea is simple, USA is a great country. Nevertheless, for a Spanish company is like a continent and it must consider entering in one of the 50 “countries” composing it.

In the United States of America there are 319 million people consuming approximately the 20% of the worldwide resources production. In turn, it produces a 23% of the global GDP.
One of its main features is the openness to business development and international trade, free trade agreements with multiple countries are an evidence which constantly attracts foreign investment. Despite being a liberal country, in terms of commercialization, it has very exhaustive regulations. Certainly, it is one of the most restrictive countries of the world regarding healthcare and plant-health measures.
Concerning economy, per capita income index is high, around 56000$ per year, which places the country in the tenth position of the world ranking about countries with the highest per capita income.
Generally, the USA is an open and attractive country due to: set of arguments, multiple infrastructures, high human development, technological growth, good business environment, the possibility to obtain a bank loan and the usual tender practice, among others.

Who is welcome at the land of opportunity?

Unquestionably, anyone believing in differential or added values, owning a brand and mastering marketing strategies, this is what this market requires. It is not just the product, but all the successful marketing strategies around it. Product should be well-defined and communication direct. Without a good promotion strategy, the product or service would hardly have acceptance in this market.
Replication of business in other countries is not valid since doing Business in USA entails a strong and developed strategy. Firstly, a target market and the entry method should be well-chosen. In addition, this market is a focal point attracting all kind of worldwide companies seeking high purchasing power, innovation, entrepreneurship and business and human development.
Main difficulty is certainly the investment demanded. Nevertheless, this country is on the second worldwide position, after New Zealand, regarding access to bank loans, which is a positive issue.
England, Japan, Canada and Spain are among the first ten powers investing in the USA.

Questions to keep in mind if a company wants to do Business in USA:

1) First of all, the company must know itself. Question: am I able? – The answer rests in an exhaustive internal analysis.
Entrepreneur must evaluate company’s abilities and behavior, differential values, negotiation with providers, human capacity, strength in terms of logistics and technology, financial viability and other important endeavors.
2) Considering if the knowledge required is present. SWOT analysis a priori, understanding the opportunities, threats, strengths and weakness similarly. Do I know how the American consumer behaves and if he/she is interested in my product? What does he/she demand for, where does he/she buys? Would my services work?
3) Understanding that without a well-founded strategy viability is impossible in this market, a business plan is essential. Objectives allowing to know if the company is on the right track or not. American people have clear ideas about where you want to reach and if you are able to. If the company is, it should be clear for him/her through facts not words.
Sale strategy must be clear and concise, paying special attention on:
Products or business areas : delimit is an attracting verb for markets and products, there should be patience and reality, waiting for the opportunity to add a new product is a better decision instead of removing products or withdrawing from the market due to follies.
Projection: study of company and on how to reach targets set.
Surveilling regulations, legislations, classification, certifications and duties.
Catching opportunities on new market and niche segments.
Strengthening importing (importer should benefit from the 30% of the transaction) and supplying channels (supplier normally benefits from the 30% too)
Difference between RRP here and there. Avoiding competition based on price but on added value

Business in USA

Some issue-features should be taken into account when doing Business in USA:
a) Negotiation: American entrepreneurships are concise regarding information when asking for: product, its price, your production capacity and delivery time.
b) Market size: it is preferable to choose one party or an state of the “continent”.
c) Exhaustive knowledge at legislative, tariff, economic and cultural level.
d) Adaptation to very specific regulations (in terms of the Food and Drug Administration -FDA- for instance)
e) Awareness about the high competitiveness in developed areas, digital forms and specific channels.
f) Continuous presence: entering in the USA entails persistency in business relationships.
g) Good knowledge of the international business plan: where we can go with our product or service, Who is the final client and how to reach him/her.
How to deal with the American businessman
– Time is money: punctuality is essential. Arriving at the scheduled time is imperative, being direct during the first phase is the key to make it effective and non-bureaucratic
– Focus on facts: doing business in the USA entails differences regarding other countries, especially Latin ones.
– Foresight in marketing, promotion and product communication is essential for the entry strategy to the American market.
– Networking. Building contacts and making your company known are keys opening innumerable doors.
– Stand out your competitive advantages is vital. Marketing mix requirements will be demanded. How can I stand out from competitors? How can I adapt to the market?
– Negotiations are individually decided, even if they are held in group, it is one person who will take the decision. Meetings are always really prepared, an American businessman does not leave any chance for hazard. Meetings start with a strong handshake and direct visual contact is essential. It is important not to show more confidence than the businessman.
– American businessman do not like silence, silence can control the negotiation. They are very competitive and flexible people, and they usually think themselves superior in international negotiations due to their origins. Their country has demonstrated them control in business relationships in the last century.
– Status it is not what matters the most, nor the age but what is obtained by own achievement.