Building a U.S. sales team
Your product or service is ready to cross the Atlantic. The next step in your business plan is the successful implementation of your sales strategy to set up your brand in the U.S. What factors help make that a success?
- Timing - The right moment to develop internationally is not the same for all businesses, but in general your business should have a product or service which has some track record and is ready to be commercialised, and your business should have the financial resources to go global. Preparation and forward planning are key, including identifying your target customer base, finding the right person(s) to lead the U.S. operation and budgeting for the associated financial, time and travel costs.
- Staffing and Recruitment - Finding a good fit is essential. There are different approaches to building a U.S sales team:
- Directly recruiting a local U.S. team – A U.S. team will have little or no knowledge of your business culture, working methods, or your product or service. They will have to quickly learn and assimilate that knowledge, while being managed from a distance with a time difference of 5+ hours.
- Sending your U.K. Commercial Director to be the lead salesman. This may prove challenging as a U.K. expatriate may not be familiar with the U.S. market, the cultural difference or have the network to successfully target clients in the U.S.
- An alternative scenario is for your U.K. CEO or senior executive to relocate to the U.S. for a couple of years to build a team in the U.S. This allows you to have someone with the business’s strategic vision on the ground as well as to surround your executive with specialised U.S. salesmen to penetrate the market. The CEO’s mission is then to recruit the right individuals to build an effective team.
- Another approach is to join forces with a strategic partner in the U.S. market who could take the lead on product launch and commercialisation in the U.S. However, this approach may dilute your control of the U.S. strategy and operations.
- When recruiting, bear in mind that the U.S. job market is typically more fluid than in the U.K. People tend to change jobs more frequently, employment is at-will and, particularly in the sales world, candidates are usually well prepared for interviews and very persuasive. Employee loyalty can be expensive. If you are unable to offer competitive salaries on the U.S. labour market, consider offering benefits such as U.K. holiday entitlement (which is typically more generous than the U.S.) and a U.S. stock option plan (which may be designed to mirror the U.K. plan).
- Distributor or Reseller – An alternative, less direct, approach to building your own sales team is to appoint U.S. based sales agents, distributors or resellers. This may also be an initial step before employing a team of your own.
- Sales representatives or agents are independent contractors that market, advertise, promote and solicit sales on your business’s behalf.
- Distributors are middlemen that purchase your goods for their own account with the intention of reselling them to others in the supply chain, such as other distributors, resellers such as retailers and end users such as consumers or companies. A reseller typically refers to a business that purchases goods from manufacturers or distributors with the intention of reselling them to end users for consumption or incorporation into another product.
- Physical offices are not a priority in the initial stages of building your U.S. sales team. Rent for office premises can be expensive and you may wish to remain flexible to meet the needs of customers. Home working is common in the U.S., particularly in the more relaxed environment of start-ups and the sales team should expect to travel to meet prospective clients. If offices are a must in the initial stages, serviced offices or co-working spaces which offer meeting rooms are a good option.
- Recognising Cultural Differences
- Marketing materials - Prepare “Americanized” collateral materials such as catalogues and flyers, using local business appropriate vocabulary. Similarly, your website should be up to date and reflect U.S. standards.
- Network - An extensive network is essential to succeed in the U.S. Attend tradeshows and events organized in your industry to improve your business’s reach, update professional social networks and maintain a good brand image.
- Titles - Titles matter in the U.S. Being introduced as a Sales VP will open more doors than being introduced as salesman.
- Compliance – U.S. employment laws differ from those in the U.K., as do other areas such as IP, contract matters and taxes. Taking early advice can streamline operations and help avoid expensive mistakes.
- Risk Management – As your business expands in the U.S., particularly at the stage of taking on employees, you should consider establishing a separate U.S. subsidiary for several reasons – to improve your profile with U.S. customers, for liability protection and to minimise the U.K. company’s tax “foot print” in the U.S. (For more information, see our US Transactions Blogs: https://mbmcommercial.co.uk/US-Transactions-blog/Categories/Us-transactions.html). We regularly advise clients on setting up operations in the U.S. and would be happy to discuss how this may work for your business.
The U.S. offers great opportunities for businesses; it is a large, diverse market. The success of your business in the U.S. may be optimized by careful forward planning and taking advice from those experienced in the market, identifying your U.S. sales strategy and customers, engaging the right team and adapting your business’s marketing materials, products or services for the U.S. market. Good luck!
U.S. and U.K. Corporate Partner
Tel: 0131 226 8232