In countries all over the world, but perhaps especially in South America, there are great young entrepreneurs with brilliant small businesses who aspire to expand to the English-speaking world and countries with stronger developed economies, where revenues and profits will be much higher and enable them to build a better life for themselves.
Most think first of the United States. It’s the biggest accessible market in the world, it’s where Silicon Valley lies, it’s got the most transport links, and, top of the list, it’s where most of the money is. And, from an entrepreneur’s perspective, the Sinatra song rings true: “If you can make it here, you can make it anywhere”.
But stop. It may indeed be the Promised Land, but it’s not easy to break into. I know, I’ve done it myself – I’ve started businesses in many countries, for myself and others, and know from experience that the USA is not the easiest for a foreigner.
Although I’m British by birth, I don’t think I have any nationalistic streak – I prefer to think of myself as a world citizen. So I’m not selling my own country. But, credit where credit is due, the United Kingdom does have a lot of advantages for starting new businesses or international expansion. Also, if you’ve really got your eyes set on the USA, you may find an easier and better route by starting in the UK first and expanding from there.
Reasons why it is better to start your expansion in the UK
Firstly, it’s a physically small country with a big population – 66 million people packed in a country the size of the US state of Oregon. The USA has 5 times the population – but in a land mass 40 times as large.
Why does that matter?
Simply, if you’re starting a US business, you have to decide where to be based. It’s really not as simple as saying “we’re an IT company, we need to be in Silicon Valley” or “we’re in financial services, we need to be in New York”. There are some significant issues here.
For a start, every state has its own laws and its own taxes. At the point of start up, perhaps those matters aren’t so significant, but when your business grows and is successful, they will be – and it may not be easy then to relocate.
Costs are very different
Even if you plan to sell cloud-based services, you’ll need a physical base and US employees to be successful. Salaries and rents are very different from place to place – that’s true of any country, but perhaps more so in the USA. Costs in Silicon Valley or New York or Miami could be double or triple those of relatively deprived places in southern states.
Communication is important
Not telecommunication, I mean physically getting from one place to another. To sell and negotiate deals you’ll need to move around, as the customers and investors are unlikely to all be in the same city as you are. And the country is big; travel is time-consuming and costly.
Contrast all this with the UK
Generally speaking, the laws and taxes are the same everywhere (true, there are some minor variations for Scotland and Northern Ireland, but they’re unlikely to trouble a new company). Assuming you base in London, it’s likely that 75% of the people you need to meet will be in the same city, and you can get to anywhere else and back the same day. Salaries and rents are lower than in the USA.
It’s also an easy country to get to; unlike the USA, visitors from South American countries and many others don’t need visas for short stays, and immigration lines aren’t usually too long. If you want to relocate both your business and yourself, there are attractive and easy to manage longer term visa schemes; an investment is required, but it’s more reasonable than many countries.
Certainly if you base yourself in London, you won’t miss your own people or food too much – it’s the world in one city, and whichever country you come from, you’re unlikely to be more than a few metres from a fellow countryman (or woman), and the restaurants and food shops cover every nationality.
The best thing about the UK from a business perspective is its lack of bureaucracy
Sure, you’ll find business people complaining about the amount of red tape, but there’s really very little – and far, far less than any other country I’ve set up a business in. Everything that’s needed can be done online – and that includes setting up your company in the first place.
You can also get a lot of help for free when you’re first setting up. The UK government Department for International Trade (DIT) has a mission to get companies to set up in the country, and London & Partners helps businesses coming to London; they’re civil servants or contractors, so the quality is a little variable, but you can get a lot of help for nothing. Just be cautious about any commercial advisors that they introduce you to – many are very good, but there are a lot of vultures out there!
If you’re looking for investment into your business, the UK also has advantages over the USA. There’s a lot of Angel investors and Venture Capital firms that are always looking for new and exciting opportunities. They’re encouraged by very generous tax savings that are given to investors in small businesses that qualify for the Enterprise Investment schemes (EIS and SEIS); you’ll need to create a UK company to be able to apply for that, but it’s all relatively straightforward.
Whether you’re selling software, services or hardware, you’re likely to need to get your websites, marketing and support material all translated into English, and it might need some other cultural adaptation too in order to maximise your sales opportunities. You may need to meet new regulatory requirements too. All of this is relatively easy to get done in the UK. The cost will be lower than having it done in the USA, and most regulatory approvals will work for Europe too. Written material – and that could just be headlines – will be accessible to a wider English-speaking audience too; most countries use English English, and people in the USA and Canada seem universally happy with English spelling and accents, whilst the reverse is not always true.
Once you’re set up in the UK, it’s a relatively easy step to set up in the USA or elsewhere
You’ll have gained the experience of expanding internationally in one of the easiest and most useful countries, and Americans are very welcoming of British business. Even businesses that just stay in the UK will have high visibility from Americans looking for merger and acquisition opportunities – it’s usually the first place they look.
VINX Digital have partnered with International Corporate Creations (ICC) to create special packages of services for South American businesses looking to expand to the UK and take advantage of all the opportunities we’ve started to explore in this article. ICC have long practical experience of everything to do with UK business and getting companies set up and operating successfully, and VINX specialises in getting the most from digital marketing to successfully launch and grow businesses transitioning from other countries to the UK, including adapting existing content in other languages where appropriate. Both VINX and ICC have extensive knowledge and many contacts across many South American countries, as well as fluency in Portuguese and Spanish to make the whole process easier.