Actually, Would Your Business Value Increase Exporting to The USA?

When selling your business is it the most opportune time to consider entering new markets overseas? YES, it delivers High Return On Investment! Why not the USA?

On a national scale, exporting can generate an often much-needed boost for a country’s economy.

When you sell your business, you should demonstrate to potential buyers it can be expanded so that they can get a high return on their investment.  Using international trade as an impetus for growing your customer base and turnover will also act as a driver for innovation as you become exposed to new customer needs and foreign competitors’ products and services.

What makes today a particularly good time for companies to expand overseas?

European countries are awaiting primary elections, Brexit can open special relationship between the UK and the USA and other nations. Taking business abroad right now is a little uncertain, but that does not mean companies should postpone any plans for expansion. In fact, times of uncertainty often present the most opportunity, with the savviest and most well-prepared business owners enjoying the greatest rewards for taking a calculated risk. A favourable exchange rate that makes goods and services from the UK currently very cost-competitive, coupled with low-cost technology that enables international trade are all motivating factors.

Today cloud computing and converged communications capabilities facilitate easy accessibility by a worldwide audience, which wasn’t the case ten years ago. As a result, many small businesses in this digital age become exporters almost “by accident”, as the products and services they offer on-line are visible globally. Many are also pleasantly surprised to find that overseas economies are often more welcoming to small firms than the UK; these countries are looking for companies that are not only exporters of goods but also of knowledge, skills and workforce.

Obviously, there are challenges associated with operating in any overseas market, and you need to take into consideration such things as cultural differences, political stability, inflation and infrastructure provisions. Opportunities are immense; however, we recommend having a partner (a distributor or an associate) with a global mindset, experience and connections to alleviate many of these concerns.  This partner will help you to plan your expansion and highlight the opportunities for growth.

Remember a potential buyer for your business does not buy the past, they buy the future profits they can generate so you must be ambitious in your plans for your business. Brexit should encourage businesses that want to expand abroad to first look at the US market, but they should do their research and follow through on their commitment to growing outside of the UK.

The USA offer international businesses one of the strongest markets in the world.

Its luxury market is currently number one in the world, and it is already the top importer of British goods. It is very probable that Brexit negotiations favour trade deals outside of Europe, it is then advisable to British businesses to get tapping into the US market before everyone else. The pound is currently weak against the dollar, so goods and services coming from the UK have never been cheaper for customers buying them in dollars, resulting in plenty of American customers looking to buy from British companies.

You should not make the mistake of approaching the US market as one single market, vast geographical and cultural differences across the country make it an incoherent mishmash of markets. You should find out how your products or services market is doing from state to state, and how to position yourself within it. The USA has various markets, some of which are more lucrative than others.

If you plan to set up a legal entity in the USA, you should pay attention to the corporation tax rates. Profits made by businesses in the US pay a higher rate than those here in the UK, generally at a rate of 39 percent (35  federal level,  4 percent state taxes). President Trump has promised to lower it to anywhere from 15 to 20 percent, so it is worth watching how this progresses. Tax levels vary from state to state, Delaware, Nevada and Wyoming charge low-income tax rates.

You should be aware of federal taxes, filing fees and other expenses that are separate from income tax to be paid. To take the best advantage of the tax system in the USA you should consider which legal structure is best suited for your products and services, as it could impact the amount of tax significantly. You should consider consulting an international tax advisor. Tax consultants’ fees are expensive, but it could be a good investment if you are serious about expanding to the USA.

Another opportunity would be to access world-class talent, graduates from Harvard, Stanford and MIT, but more importantly America’s attitude towards work presents great opportunities. At-will employment, ambition and a willingness to go the extra mile combination makes USA workforces the best on the planet. US salaries are often higher than those in the UK, and US employees may expect to see benefits packages different to the one UK businesses experience. We encourage you to hire carefully, and get it right!

You should capitalise on the chance to sell ‘Britishness’ Opportunity: The UK shares a history, a language, and to some extent, a culture with the USA. However, some things are fundamentally different, and it is the ‘Britishness’ of your business offerings that present a fantastic opportunity. We suggest that you adapt your UK brand to the American market. Despite uncertainty regarding the future of the European Union and the UK’s exact relationship with the USA, it appears there are plenty of opportunities for UK-based businesses considering expanding to America. If nothing else, success in the States tends to lead to success in other markets around the world

Potential investors/buyers would certainly be ready to pay a premium for a business with an established presence in the USA as it opens doors for many other markets. They would see growth opportunities that could have a high return on Investment possibilities.

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If you wish to build up the value of your business and would want to explore what you could do to make it sellable, please do not hesitate to call Jean-Bertrand de Lartigue on +44 1656 766 363 or email him, jb@exit-planning.co.uk

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