Exports play a crucial role in any country’s economy. While trade with Russia has collapsed due to Russia’s invasion of Ukraine and China remains mired in protectionist policies, companies worldwide are looking even more closely at the US market. As the producer of about a quarter of the world’s GDP, the US offers huge growth opportunities.
I’d like to share five key tips for Nordic businesses looking to enter the US market and for those already operating here.
- Learn about markets, opportunities, and industry clusters. The US is not just one country, but a near-continent of more than 50 states, 380 metropolitan areas, and 3,200 municipalities. New York City’s economy alone is the size of Italy's national economy. The Los Angeles metropolitan area economy is about the size of Spain, and the Chicago metropolitan area is the size of Switzerland’s economy. Distinct industry clusters dominate certain regions: the financial sector is concentrated mainly in the New York and Chicago areas. The Washington DC area is home to the US Department of Defense, which garnered a budget of $730 billion for 2023, with a significant share of procurement in that budget. Not to forget the whole of US government contracting. Texas is a centre for oil and natural gas, as well as high-tech and renewable energy businesses. US states are very independent in their taxation and legislation, and their laws differ considerably. In Texas, for example, the law prohibits taxation of employment, and companies do not pay taxes on their profits. The state also offers several enticing support packages to attract new businesses.
- Be prepared for the unexpected. As the saying goes, something difficult is “more like a marathon than a sprint.” In the US, starting up and succeeding may be even more gruelling than a marathon - imagine a long-distance run that can take decades. Your company’s owners, board, management team, and talent need to be involved in and dedicated to your project to go abroad. Establish perhaps a task force with great participants of your company’s talents. That said, on-the-ground help is available: the US Small Business Administration support centre helps SMEs entering and investing in the US. Another resource: identify and use a local lawyer to help your company navigate local laws and contracts.
- Don't wait for the perfect time, act now. Some Nordic companies spend so much time improving their product or service that they miss out on opportunities to enter a new US market. Many people say that Nordic products and services often beat their competitors in quality and might have garnered market success even earlier if introduced sooner. Identify your strengths and the market areas where you believe your customers are and where the conditions for success are good. The targeted market may initially be smaller than you’d planned, but the potential may be significant and sufficient for growth over time.
- Unleash the power of sales. You need sales and marketing-minded people on the ground who are ready, willing, and able to network, meet potential customers, and tell your story repeatedly. There are lots of opportunities for networking and marketing your products and services in tradeshows, fairs and other networking-, sales and marketing events. Also, personal sales meetings are often the best opportunities to network.
- Have the right people present in the US. The US market is highly competitive, where operators, customers, partners, and competitors are physically present to promote their business. To enhance success, send a talent or search for a local talent who already knows the market you want to crack. If your company has no presence here, success will be very, very difficult.
"Dream it, plan it, do it!".
Feel free to send me your comments, ideas and thoughts about the blog series or the topic in general. Happy Summer 2023 to us all!
Markku Leskinen
Washington DC, USA
+1 240 789 7175
markku.leskinen@mercuriurval.com
Some useful links
U.S. Small Business Administration support