After successfully building your business from the ground up in the United Kingdom, you’re ready to take on the exciting challenge of expanding into new geographic markets. As you debate whether to hop over to neighboring countries in Europe or enter a space a bit farther away, you’ll find that one country tends to stand out as a golden opportunity: the United States.
While making the jump across the pond can seem intimidating, doing so comes with some big perks that can significantly pay off.
If you’re weighing where to set up shop, consider some of the top reasons U.K. companies expand to the U.S. and see if you’re ready to make the jump yourself.
Four Reasons UK Companies Expand to the US
Let's cut to the chase – if you're a U.K. business owner dreaming bigger than Big Ben, the United States isn't just another spot on the map. It's like having a VIP pass to the world's biggest business party. Not convinced? Here are four compelling reasons that might just have you practicing your American accent.
1. The Market
There’s a reason the U.S. is called “The Land of Opportunity.” With the highest GDP in the world, the U.S. is home to more than 300 million people, many of whom have higher average salaries and more disposable income.
The United States also boasts relatively low unemployment rates and favorable corporate tax rates that appeal to global businesses. On top of all that, the U.S. fosters a culture of innovation, making investors and consumers alike more open to new products and services—just like yours.
2. The Talent
In many cases, hiring is the first thing that U.K. companies do when expanding their business. Setting up shop in the U.S. gives you access to a rich, diverse talent pool of highly educated people.
Plus, the U.S. is a hub for several major industries, including tech, finance, and healthcare. With that competitive job market, you’ll have no problem finding dozens of qualified candidates, no matter how niche your open roles are.
3. The Funding Opportunities
Even if you bootstrapped your business to start, it never hurts to have access to additional funding—especially when expanding internationally.
For more than a decade, the U.S. has ranked in the top spot on the Foreign Direct Investment Index, likely to attract the most foreign investment in the next three years. You’ll be in good company among other foreign businesses.
The U.S. also offers different funding methods that can work to your advantage. While the U.K. tends to offer more government-backed funding options, the U.S. leans more on venture capital funding. And, while the U.K. is not terribly far behind them, the U.S. raises more VC funds than the U.K.
4. The Geographic Benefits
On top of having industry hubs, the U.S. is also the largest global market for certain industries like medical and tech, offering you a chance to emerge as a key player in those spaces.
The country’s proximity to Mexico and Canada also means you can more easily access raw materials to support production and ease costs. This, combined with their vast infrastructure and existing trade agreements, supports supply chain health and distribution, reducing the risk of disruptions as you conduct business abroad.
Even with so many great reasons for U.K. companies to expand to the U.S., you can’t jump the gun too quickly.
Five Signs You’re Ready to Expand Your UK-Based Business
Before you go booking flights and leasing office space, make sure you’re in a good place to start your business expansion.
1. You See Demand for Your Business
Do some research to ensure there is an existing market for your business offering in the States. Look at the U.S. sales interest and perform a small level of sales testing – do the numbers look promising?
If they do, you can assume you’ll be able to sell to that market. If they don’t, you might want to hold off until you can garner more interest.
2. Your Home Market Limits Your Growth
Even if you’ve built a strong customer base in the U.K., there are only so many people you can reach on your home turf. If you’ve hit the ceiling and see a foreign demand for your business, expanding in the U.S. offers a new opportunity for growth.
3. You Have Enough Funding
Unfortunately, U.S. business expansion isn’t free. Make sure you’re financially stable enough or have identified funding opportunities in the U.S. to comfortably afford the investment costs of expansion, like incorporation fees, inventory, and regulatory fees.
4. You Can Afford the Staffing Differences
One of the most jarring contrasts for U.K. companies expanding to the U.S. is the difference in salary and benefits.
U.S. employees expect significantly higher salaries than those typically offered in the U.K. Plus, you will be required to offer your full-time employees healthcare coverage, which is also much more expensive. You’ll have to make sure you can afford those payroll and HR standards.
5. You Have a Plan for Expansion
In a perfect world, you could snap your fingers and be ready to operate in the U.S. If only!
For a smooth expansion, you need a strategy for incorporating and setting up all the financial compliance, HR, and payroll requirements that come with expansion. You also need to understand the tax and compliance differences so you don’t get in trouble with governing bodies or face fines.
The thing is, that’s a lot to make sense of on your own. You’re much better off getting a partner who can guide you the entire way.
Have a Smooth US Expansion with Hiline
Expanding your U.K.-based business requires more than filing some paperwork. You need to understand the business and regulatory landscape you’re looking to enter into.
Hiline is your U.S. expansion partner. Using our deep knowledge of U.S. payroll and employment regulations, combined with our cutting-edge financial technology, you transition from an international startup to a U.S. market player.
Let’s work together to build out your business stateside.
Sign up for our newsletter.
