On the 20th and 21st November 2019, international expansion specialist, GTM Global, played host to twenty-four adventurous tech, digital and retail brands on a mission to grow sales and expand their operations into the USA.
They attended GTM’s complimentary Boots On The Ground USA expansion workshops where they met a mix of US in-country specialists and UK-based international trade partners offering advice and guidance on different aspects of US market entry and expansion.
This article sets out to provide a profile of the workshop, the delegates and the partners attending, plus insights into the challenges and issues raised and the solutions proffered.
With special thanks to Fora for hosting the event at their amazing Spitalfields workspace and to Splento for providing outstanding video recording and production services.
Introduction
GTM Global provides international expansion services including an acclaimed workshop programme for tech and digitally-enabled scale-ups. Their unique workshop format gives delegates a series of in-depth, one-to-one consultations with relevant specialists over two hours. It delivers prescient and bespoke advice in an informal setting where owner-managers obtain mission-critical information to help develop or refine their go-to-market strategy and business plans.
Topics covered at this Boots On The Ground USA workshop included legal, finance, incorporation, visas, IP protection, sales tax, compliance, employment matters, market research, routes to market, channels and distribution, banking and foreign exchange, travel management and US regional support.
“It’s great to see so many SMEs on a tireless mission, ignoring Brexit woes, fearlessly pushing the boundaries and quietly putting back the Great, in Britain.”
Mark Stimpfig
co-founder GTM Global
Planning US Expansion
It is interesting to note that 78% of delegates at the workshop, when discussing their international expansion strategy, already have US sales and are looking to expand their presence in some way. Nearly 60% are looking to set up their own office and about 15% plan to service their target audiences uniquely online and therefore remotely. Some 40% of delegates are also planning a pro-active US launch beyond just selling into the US re-actively.
The Customer is King
Most companies looking to expand into the US sight market research as a key requirement and that’s what we see in the diagram below, at 80%+.
Despite this, workshop discussions focused primarily on identifying channel partners and distributors rather than primary market research. This is understandable given the importance of channel development for some businesses.
However, the benefits of good market research should not be overlooked and it can make the difference between success and failure and/or higher costs and longer timescales – even if the target market is English speaking.
For example, understanding the local competitive landscape, the different personas, behavioural and cultural considerations, the media channels and resources where your customers hang out and so on.
We see many companies who have established their UK operations, work on the premise that they can transpose their existing strategies and approaches and be equally successful with their international expansion. Unfortunately, many GTM partners have witnessed the consequences of poor market research and not surprisingly, recommend that all market assumptions are validated.
Our US in-country specialists, OCO Global – who incidentally runs the DiT export programme in the USA – can also help with market research.
You can see OCO Global offers a full range of services. However, where we see particularly strong interest at GTM workshops, is in identifying and engaging with channel partners, distributors and strategic sales opportunities. In fact, many UK companies hire OCO as an outsourced sales operation whilst they get their feet on the ground.
Compliance Matters
There is a raft of mission-critical US compliance matters for UK companies to consider. The diagram below shows delegates’ interests in topics such as legal contracts, Nexus (US), sales tax and in-country setup.
Legal
It’s clear from the distribution of interests, that most compliance issues are high on the agenda. That’s an important observation given that there are many critical differences in US law and its interpretation when compared to the UK.
“When it comes to setting up a business in the U.S. getting the legal aspects right is extremely important and something that should not be overlooked.”
Tom Thorelli is one of the longest standing GTM partners and flies over from Chicago regularly to attend workshops and other GTM events. Tom has written extensively on the subject of the issues and challenges facing UK companies and the steps that can be taken to minimise risks.
If you are considering US expansion, be sure to check out the “must-read” article “10 legal issues to consider when expanding into the us.” Here, GTM Global co-founder, Ian Collins, talks to Tom and captures invaluable facts, insights and recommendations to help you prepare your international expansion plans.
Tax & nexus
Those critical US vs UK differences are not limited to just legal matters. As Colin Stansbury from GTM Global partner, Avarala, explains, there is a myriad of complexities around US sales tax and nexus.
“Keeping up with frequent rule changes in jurisdictions around the world, including over 12,000 U.S. sales and use tax jurisdictions, can be a full-time job. And, if you get it wrong, you can be liable to a financial penalty.
Also, recent changes to U.S. legislation has had a massive impact on eCommerce vendors, as a business can now have economic nexus with a state, even if the business does not actually have a physical presence in the state.
If that is not enough, as a result of the landmark South Dakota vs. Wayfair, Inc. Supreme Court ruling, any business selling into a state in the U.S. can now be held liable for collecting and remitting sales tax in that state, making it more important than ever for businesses around the world to be aware of their U.S. sales tax obligations.”
Colin Stansbury
Avalara
Critical Resources
The graphic below shows delegates interests in relation to a mix of resources. Top of the list is travel, and at GTM Global we are delighted to have United Airlines on-board as a partner and sponsor. United has created a tailored programme for tech scale-ups travelling to and from the US offering dedicated discounts and complimentary perks. Be sure to check out the details here.
Staff and Employment
The next two hot topics are HR Management and Recruitment, together these cover a raft of issues such as the relative costs of hiring and firing, terms and conditions, salaries and benefits packages, employment law, payroll and so on. There are also considerations for visiting UK managers working in the US for protracted periods.
GTM Global partner, Safeguard Global, has been working in this space for many years and together with our legal and accounting partners at Thorelli Associates and International Management Solutions, they provide a host of invaluable advice and guidance in these matters.
Money Matters
We know from listening to delegates, that it is very easy to underestimate the cost of international expansion and that things can take much longer than is the case in the UK. Just opening a bank account or applying for a visa, for example, can take months.
Banking & Fx
We see in the graphic above that around 80% of delegates attending the workshop sighted foreign exchange and banking as important areas for consideration. These subjects arise at nearly every workshop and GTM partner, World First, has a great solution for both.
In fact, World First’s recently launched foreign exchange rates are amongst the lowest available worldwide and when compared with UK high street bank rates and those of the likes of PayPal and Amazon, they can be up to 50 times cheaper. Their services also support international expansion beyond the USA.
Not surprisingly our delegates are also interested in the availability of grants, R&D relief and investment, and although only 35% of delegates in this cohort were seeking investment or debt finance to help fund their expansion, across the year that figure is actually 50%.
Taxes & Corporate Structuring
Most UK companies have heard about incorporating a US company in Delaware. This may, of course, be right for your business. However, understanding the options available, the pros and cons, plus other related issues such as tax planning, corporate structure, tax compliance and personal tax, is critical in making an informed decision that doesn’t come back to bite downstream.
At some point too, UK companies may need to think about accounting and bookkeeping, statutory reporting, insurance, payroll and other HR issues.
These are the topics of conversation with GTM Global partner, International Management Solutions, one of a handful of US-based accounting and consulting firms dedicated to assisting European companies with setting up and growing their businesses in the USA.
You can meet the IMS management team at many of GTM Global’s international expansion workshops. Be sure to check out the GTM event schedule here.
Networks
A strong and active network can fast track any business expansion. It’s a valuable way to expand your knowledge, learn from the success of others, access opportunity, and build knowledge and momentum about your business.
Interestingly, approximately 80% of our delegates wanted to learn more about US Economic Development Organisations (EDO), pressure groups, trade and government bodies.
The interest in EDOs is not surprising given that most offer valuable incentives, packages and benefits, to attract UK companies into their region.
US State & Local Business Networks
Access to strong and active local US State and Business networks can propel any business expansion. It’s a valuable way to expand your knowledge, learn from the success of others, access opportunity, check out any benefits, grants and incentives and build knowledge and momentum about your business.
Between GTM and partners like OCO Global, we have access to US Economic Development Organisations (EDO), pressure groups, trade and government bodies – across the US from New York, Washington, Atlanta, Florida, Ohio, Arizona and California. Approximately 80% of our delegates wanted to learn more about US Economic Development Organisations (EDO), pressure groups, trade and government bodies.
Fora Spaces
A mention for our hosts:
Fora: plural of Forum. A place where great minds meet and work. A space to be brilliant. Fora are re-imagining the office experience with beautiful, professional and flexible work-spaces across Central London and Reading. The difference is hotel-like hospitality and private members’ club-style service.
Fora have taken the best of co-working, serviced offices, fine hotels and hospitality and added a dash of design and architectural practice. From freelancers to international enterprises, the company’s aim is to help you unlock your best work, whatever your size.
Discover vibrant work-spaces that really work, designed to drive productivity, inspiration, and collaboration.
Here at GTM, we’ve witnessed this firsthand and there is no doubt Fora is onto something very special. If your scale-up is looking for new office accommodation, let us know and we will connect you with our friends at Fora.
Splento
A mention for GTM’s photographic and video service partner, Splento.
“Splento provides professional photographers & videographers on demand when you need them, with the quality you expect and the service your business deserves.”
Roman Grigoriev
CEO, SplentO
Here at GTM we met Splento at an early workshop a year or two back and have kept in touch ever since. Today, Splento is a strategic partner of GTM’s and we are delighted to be able to introduce the business to our community of international stars.
Summary
This Boots on Ground US drop-in clinic was a huge success thanks to the GTM Global partner network and the 24 adventurous scale-up brands who attended the event.
Each year, GTM Global runs 40+ events so be sure to check out our event schedule here and don’t forget to join the GTM community below.
We look forward to supporting your international expansion journey in the coming months. See you soon!
