In the latest of our series to help the Scottish business community, Gareth Magee gives an insight into how to do business in America.
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Population: approx. 314 million
Currency: US Dollar
Capital city: Washington DC
GDP: approx. $16 trillion
The United States is the most powerful country in the world, with a population about 60 times that of Scotland. It's the land of milk and honey and its culture pervades everyday life across the globe. With a market of that size and influence, why wouldn't Scots companies want to do business there?
It's not that easy for outsiders to break the US. But many Scottish businesses have flourished there, making the US our largest export market.
Doing business internationally is rarely a case of extending the UK operation; you're back at the start-up phase again. Nowhere is this truer than the US. Taking your business to the US means carefully shaping your business or product to fit the market, right down to using American language and case studies. The great work you've done in Aberdeen or Manchester won't cut the mustard in Chicago - in fact it will just highlight that you are not a US company.
Having worked with a number of clients that have tackled the American market successfully, there are some common themes that emerge when I speak to them about what contributed to their achievements. Company owners need to examine their motives, have realistic cash reserves and think carefully about who is best equipped to lead the charge. Someone with entrepreneurial spirit and a founder mentality is preferable - not necessarily the top salesman. This person is the magic ingredient for success, so make sure to choose well.
Given that the US is such a large beast, doing business there isn't like anywhere else. The logistics come in layers, with federal laws to contend with as well as rules and regulations (and taxes) applied by each individual state. In fact, the ins and outs of doing business with each state could well form a 50-part series of guides.
Many stereotypes exist about the US, most with their roots in Hollywood. However, to get past the stereotypes, it's vital to do some homework. Finding out where to locate, what the local markets are like and what the state laws are will all play a part in early decisions. Advice and research is vital - as there aren't many second chances across the pond.
One stereotype that is most apparent, and true, is the approach of the American people. Friendly, informal and straightforward, business is conducted in this manner too. Adding to the informal feel, text, email, Skype and FaceTime all play a large part in how business is done, and directness is a positive attribute - it can take some getting used to, but it doesn't take long to adapt your communication style to suit.
However, don't make the mistake of assuming that an informal approach translates to a casual attitude. Business is serious. While the US approach may appear relaxed, business is done quickly - and 'relationship building' happens outside office hours. In the land that never sleeps, time is money, and getting the deal done is the priority.
Gareth Magee is a partner at Scott-Moncrieff, leading accountants and business advisors, which, through its membership of the Moore Stephens network, helps Scottish businesses realise their international potential.