You’ve done the hard part and founded a growing UK business that is delivering on its promise to customers. Momentum has begun. Your UK and European investors are happy. You’ve had customer enquiries from America and now is the time to ‘seize the day’ and look to the largest consumer market in the world to fuel the next stage of growth. Is America Calling?
I’ve personally worked in the US, UK and Europe – growing businesses across borders. In my move from the US to the UK at the end of the first dotcom boom, I did underestimate the differences in culture and how business worked here in the UK. After all, don’t we speak the same language?!
I’m co-hosting a couple of free workshops with an incredible panel of experienced entrepreneurs and professionals in Newcastle on 2 Oct 2017 and Edinburgh on 3 October 2017. Please see below for invites and details.
If you are ready to set up a presence in the US, here is an 8 step checklist to help you plan.
Legal: Form US entity (if applicable), intellectual property and patents, various contacts by state (T&Cs), Employment.
Choosing the right US lawyer is incredibly important. Most people know that in the US lawsuits are plentiful – it is a litigious society and costs nothing to bring a claim against someone. Getting the right agreements in place before you do something, can solve many of these issues. In addition, from personal experience, there is another big difference between the US and UK on how lawyers are used. When I launched Artist Underground Music in 1994, my brilliant lawyer Clara Martin became much more than someone who drafted contacts, she became a business adviser. The contracts were difficult because everything we were doing had never been done before. But more importantly, her advice and counsel became part of the fabric of the strategy. I find that in the UK, entrepreneurs look at lawyers as simply transactional and don’t include them in the bigger picture.
Immigration: Visas. Get the facts and do it right from the beginning. Plan for the time it may take too.
Tax: US tax is complex. There are two sides to consider – Corporate and Personal. In addition to ‘US’ tax, there are 50 states and further local jurisdictions that have their own systems too. On the Corporate side, it’s important to establish the relationship between your UK (or European) parent and the US entity in order to separate the related income between countries, particularly, because the US currently has one of the highest corporate tax rates in the world. On the Personal side, once you spend enough days in the US, you are considered a resident and taxed on your worldwide income. I’ve seen lots of entrepreneurs get caught personally in the US tax net simply by making a few trips over and doing sales in the US. Focus on compliance from the beginning.
Location: California Dreaming? Choosing a location is much more than picking sun and beach, even when you can’t take another dark and cold February day! You need to think about your customer base, logistics, government support agencies on the ground (both US and UK), talent pool, area costs, access to capital and time zones. Even if California is a great option for many reasons, an 8 hour time difference to the home office is much more difficult than the 5 hour time difference from the east coast. Flights are also considerably shorter too.
Recruitment, HR and Admin: Hiring the right team locally in the US encompasses the usual process of core skillsets, culture fit and company values, but now there are the additional considerations of compensation packages, employment contracts and remote accountability. In general, US compensation is higher in most of the places where you will consider your move than back in the UK and benefits (healthcare, insurance, etc.) fall to the employer, not a national system. You’ll need local support for payroll, benefits and bookkeeping. Most of the best successes I’ve seen for expanding to another country are where a founder or high level team member go over to help set up the new office. It bridges culture, company ethos and the product or service itself. But if you do hire someone on the ground to set up your new office without HQ support directly on the ground, then deliverables and accountability need to be robust and frequently reviewed.
Insurance: Extend your business insurance to the US. As with legal, the US can be a high risk place.
Banking: Set up a US bank account that is coordinated with your home bank, particularly one that understands high growth transatlantic companies like yours.
Funding: If you are looking for US funding, be aware that pitches and culture are considerably different. Do some research first.
If you’d like to find out more and are ready to make your move to the US, here are a couple of upcoming workshops with an incredible panel to answer your questions:
- Tracey Ginn, Partner, Corporate Lawyer, US and UK
- Brett Putter, Founder CultureGene
- Anna Gudmundson, Senior Adviser to Tech Scale-ups
- Elizabeth Jamae, Partner, D’Alessio Law, US Immigration Lawyer
- Brad Albin, International Corporate Tax Director, US Tax & Financial Services