The USA is one of the biggest economies in the world. With a massive 335 million+ population, the economy offers a sizeable consumer marketplace accounting for almost 20% of the global business economy. With such a large market, there is significant potential to thrive.

That said, the United States is a federal system. Each state has separate legal systems, operational procedures and regulations. The population is also a melting pot of diversity, with marked cultural differences across the country. Therefore, to succeed in the US market, it’s critical to understand how to navigate the various challenges. This guide will walk you through the nuances of the American business market.

Business culture in the USA

US business culture is generally characterised by low power distance with more informal and participative business interactions. While some attributes differ, given the vast geographical differences, there is a prevalent culture toward individualism. Accomplishments are highly valued, so they are shared when doing business in order to gain trust. Communication is also typically direct, with the emphasis on getting business done.

Top tips for doing business in the USA

Here are some considerations when doing business in the United States of America.

Customs

Some goods are prohibited from entering the US, so consider emailing the Export Control Joint Unit (ECJU) in the UK to find out exactly what is permissible.

Also, contact the Customs classification hotline or check the trade tariff sections for the harmonised tariff schedule to determine duties and tariffs.

You can work with a licensed Customs Broker to assist you with the rates and other critical import and export requirements. You can find the list of approved brokers on the US Customs and Border Protection site.

Communication

The primary language of communication is English. However, there are some variations in the US versions of the language. Take time to review content by native US English speakers and listen to the differences.

Americans also tend to be direct communicators, so be straightforward and crystal clear. Avoid using ambiguous phrases, and don’t assume anything.

Tax

The federal system brings some complexity to the business and individual tax regime in the US. Cities, counties, states and the federal government can all impose their income taxes. There’s no Value Added Tax (VAT), but sales tax rates vary from state to state. Therefore, when exporting goods to the US, getting tailored advice is critical. Find an accountant or tax lawyer with experience in the state in which you are looking to conduct your business operations.

Standards

It’s critical to confirm that the product you want to export to the US meets the legal, licensing and standards requirements. Check the US Food and Drug Administration (FDA) legislation and regulations for food and drink, medicines and cosmetics. Labelling for consumer commodities is also enforced by the FDA. Verify the local labelling regulations with the relevant state business bureau.

Intellectual property

Intellectual property (IP) rights are territorial. So IP rights granted in the UK don’t automatically protect you when doing business in the USA. If you need IP protection when trading in the US or selling to customers via the internet, you’ll need to file a registration with the relevant IP rights and Copyright offices. Get guidance from UK IP attachés based in UK export markets.

Payment

You can invoice and receive payments in either USD or pound sterling. If you agree with the buyers for a pound sterling invoice, you pass the risk to the buyer and don’t have to deal with exchange rate risks.

It helps to get guidance on managing your foreign exchange risks from a dedicated international payments specialist like Clear Currency to ensure you stay profitable. Learn more about mitigating foreign exchange risk here.

Entry requirements

If your business requires you to visit the US, you can travel there for up to 90 days through the Visa Waiver Program. If you intend to set up a branch in the USA, you’ll need a non-immigrant visa.

Insurance and product liability

UK Export Finance (UKEF) provides insurance that helps UK companies against buyer default when doing business in the US. Even if you have UK cover, you need US Product liability insurance. The US legal system follows the concept of strict liability. This means that even if you’re only a supplier, you may be held liable for any losses. Product Liability Insurance will protect you from lawsuits arising from product failure.

Market

The US market has high levels of consumerism, which can boost your business. However, the vast country and marked differences between states mean you must tailor your marketing to the different regions. This can prove costly, especially if you expand across the entire country.

Over 70% of US consumers stand ready to switch brands, so carefully consider your marketing strategies and be prepared to pivot as necessary.

Time

When conducting meetings, punctuality is considered necessary. Whether online or in person, you have better chances of negotiating fruitful deals if you are on time.

Use Clear Currency when doing business in the US

Clear Currency provides a fast and efficient way to send money to and from the USA. You’ll also get expert guidance to help you handle any queries you have about your exchange. Sign up for an account today.

How to Do Business in the USA