By Anna Lemos
The US is the commercial center of the world – a true powerhouse of business activity and a country that is home to the drivers of technological revolution. Yet it’s not all a bed of roses for exclusively US trading companies. Markets can be particularly tough going for those in already saturated industries and can lead to every avenue being exhausted by multi-national companies.
Despite this however, the thought of trading in foreign climes is often an intimidating task. Yet recent research from our overseas ally, could be enough to cement enterprising interest in finally taking the leap to tap into an unexplored market .
The UK and a transatlantic surge in business
2015 marked an incredible year for UK business, in which more businesses than ever were formed – rising from 581,990 in 2014, to 608,579 in 2015. These figures mean that today there are a staggering 58.3 companies per 1000 people of the UK populous.
Equally the UK has also experienced a drastic increase in the percentage of directors who are under the age of 24, which shot from 13,277 in 2014, to 21,019 in 2015.
When taken together, these statistics may be the perfect storm. This is a market where many new businesses merge with an already large pool of companies; in which younger, more technologically savvy directors seek out new business ideas, services and products to supercharge their own growth. Of course such figures would not be possible if there were no flourishing markets to tap into, where financially affluent consumers can be found.
For your US based company, whether you market to B2C, or B2B, it certainly appears that the UK is an attractive proposition.
Taking the leap to foreign lands
The benefits of trading abroad are often far more varied than many imagine, including:
- A market that is yet to be explored;
- More timely payments through concrete trading terms;
- A reduction of risk through a diverse market portfolio;
- Improved margins (for the time being at least as the Sterling is weak – providing you with an immediate bang for your buck).
These arguments make for compelling reading for those who have pondered exploring trading overseas, and in particular in the UK. Here we look at eight ways in which US companies can explore the expansion potential promised by the United Kingdom.
Learn lessons from some of the US’s biggest corporations
Amazon UK, EBay UK, Asda (Walmart’s UK arm), Costco UK and McDonald’s are all examples of global companies who tackle the UK and US markets in very different ways.
Amazon in particular is a prime example of how product positioning is wildly different between the two regions; most specifically this includes their catering to consumers who are increasingly interested in online Grocery ordering, and who include savvy parents who seek out the best deal baby products. This is all against a backdrop of a general surge in the UK e-retail market.
All of which does underscore the primary rule for entering any foreign region: the essential need for extensive market research.
Traverse the transatlantic with a UK-based website
A United Kingdom-based website is a simple, cost effective way of tapping into the market; with geo-targeting you can capitalise on your market research and drill down further into the very specific cities and towns where your product or service is most in demand.
You talk in their language
There are few countries that are as similar as the US and the UK; we share a large part of our culture, we benefit from much of the same business structures and, of course, we speak in the same language – all of which makes your life as an exporter all the easier. Remember though, many words are spelt differently in the UK.
Capitalize on an eager market where US brand fans await
European consumers typically trust US brands – the fact that much innovation emerges from the US is equally as beneficial to the US Company with fresh to market product.
Drive down barriers with UK hours
Technology has made communication between countries and continents far easier, and most importantly far cheaper – market leader Skype is the epitome of VOIP made accessible by businesses eager to avoid transnational call charges. For the US based business this can mean that the only challenge of providing support to UK consumers is the need for customer service assistants who work on UK times.
Explore setting up a UK company
The prospect of setting up a UK company should be something that at least provides food for thought; whilst there are a few approval steps, and acceptance isn’t always guaranteed, the benefits can far outweigh these slight drawbacks. This includes a UK Registered Office Address, a full Mail Forwarding service, unlimited Office Service Addresses and (with certain providers, such as Company Formations 247) it can include complete company secretarial and register maintenance services.
All in all, such an approach can make for a polished appearance and a representation that a business is UK based.
Set up a multi-currency account for seamless international finances
Multi-currency accounts, such as Barclay’s Foreign Currency Account, are a simple way of managing finances that may consist of revenues from many countries. They are designed to reduce the rate of exchange rate fluctuations and speed up the previously lengthy time periods that were suffered when transferring funds from and to abroad.
Look towards small and specialist brands that have secured success
Trading in the UK isn’t merely for larger corporations who target the masses, and indeed there can be even further benefits for a niche product or service when an entire new market can be accessed – where little to no competition exists.
By Anna Lemos is the digital content lead at Company Formations 24.7, an online company formations specialist with over 30 years experience. @COformations247.