Across the pond: 3 hurdles to consider when you make the leap to America
5 min read
30 July 2018
The US may have a good reputation for business, but that doesn’t mean there aren’t hurdles. Here, we explore three of the top challenges for SMEs with their eyes on the states.
The annual Growing Business Awards (GBA) is coming up, and in preparation Real Business recently held the Festival of Ideas at the Brewery, London for the GBA alumni.
The day was broken up into break out sessions giving attendees the chance to discuss key issues affecting SMEs today, and the third roundtable focussed on expanding businesses overseas, and how to implement export strategies in a volatile international environment.
Some attendees regretted their experiences with overseas exposure and some didn’t, but one key idea to come out of the discussion were the differences around certification processes, and how difficult these can be to get your head around.
In particular, one business said it took them five years to get their produce certified in California.
This is particularly interesting, as according to the government’s website it had low regulatory barriers.
Here, we explore some of the main challenges to taking a product to the US, and which factors businesses should consider when developing their export strategy.
Marketing to different regions of the US
We may think of America as one big country, but of course it varies by so many factors from state to state.
For example, the weather in California, Hawaii or Texas would be staggeringly different to that of Alaska or Minnesota. Political leanings differ, there are red states and blue states, and even different laws. Certain products and services will make a better natural fit in some states, but might be a bust elsewhere.
As there are different costs and admin associated with targeting the whole of the US or individual states, it makes sense to do your market research before you decide where to set up shop.
Certification and licensing by state
Some products require mandatory certification to be sold in the US, but if you’re not sure whether this applies to you there are companies available to help guide you through this. In some cases, this is Federal Legislation, and in some cases there is state specific certification required.
It’s also worth finding out whether you need specific licensing, and wether this is organised at a state level. For example, Money Services Businesses need to get licenses state by state, which can be an additional hurdle to small businesses. However, there has recently been some progress with this as multistate licensing has been piloted.
You can check if your products or services require certain licensing or certification here.
It may be worth noting that you may also need permission to take products overseas temporarily for business purposes, for example as samples in a tradeshow.
Protecting your trademark in the US
Once you’ve decided which states are suitable for your business, now might be a good time to check your intellectual property.
This is important for two reasons: first, if you have a great idea, you don’t want somebody to steal it; and secondly, if you have a trademark in the UK it doesn’t necessarily mean you hold the same protection elsewhere –and someone might have already trademarked your idea in the country you want to target. Naturally, if you are infringing ion someone elses intellectual property, this is risky business.
If you have a base application or registration in the UK, you can apply for an International Trade Mark, which registers your trade mark in all th countries which have signed up to the Madrid Protocol. The Madrid Union currently has 101 members, representing more than 80% of world trade, and includes the US.
Alternatively, if you are looking for protection in the US only, you can look at state trademarks or federal trademarks. State trademarks are cheaper and quicker to obtain, whereas federal trademarks offer more protection.
Remember: a state trademark is only relevant in the state where you register it, so if you are looking to export across the US you will either need one of these per state or a federal trademark to cover you nationwide.
For more information on exporting to America, click here.
You can find out more about the awards here.