In world markets, Americans are known as being extraordinarily friendly and open. They move forward quickly on partnerships and projects. And sometimes Americans skip important steps that more methodical business cultures would not normally miss. For those entrepreneurs in more than one hundred countries who read my blog, this article is for you. I hope this helps you to navigate current and future relationships with American companies.
In American business, the primary reason for a company’s existence is to increase value for the company’s owners. As a company wanting to business in the United States, it is important to know a potential partner or customer’s ownership structure and its associated decision time frame. In the case of private companies, stockowners might be a small group of individuals who want to sell the company in the next seven years. In the case of publicly traded companies, this is stockholders and primarily those holding the largest amounts of the stock. There are few family companies left that are passed down from one generation to the next, so it is rare to have a time horizon for making decisions including capital investments that is greater than a decade. In publicly traded companies, the decision timeframe is often quarterly since this is the frequency of reporting to stockholders. Be prepared with information about the product or project costs, projected financial benefits, and when the benefits will start to exceed the up-front costs. This is the main criteria for making a partnership or purchase decision in an American company.
Justify Extra Time
Based on world standards, Americans tend to rush decision making and frequently skip important fact-finding steps. As a supplier or partner to an American, it will be important for your company to help in this area. But to do this, you may need to justify the extra time needed. I recommend always framing in terms of financial outcomes. For instance, your company may want your American partner to conduct more market research before diving in to a new market segment. You can help to justify the cost and delay that the market research requires by discussing the financial costs of being wrong about the market segment. Missteps are costly and estimating these costs can help an American company understand the need for better upfront planning.
Ask About Issues Early
All working business relationships have issues that must be addressed in order to improve results. When working with Americans, these issues need to be talked about as soon as they arise. Don’t wait for an issue to resolve itself. For Americans, small issues grow into larger ones that undermine trust and eventually will doom a business relationship. Instead, take your most trusted contact aside and ask them if there is something wrong. Then listen to their answer. If they deny that there is a problem, then state the reason why you think there is a problem. Most Americans at this point will have an open conversation with you about the issue. This is important because you cannot solve an issue if no one will discuss it.
For the time being, the American market is still the largest economic market in the world. It holds many opportunities for international entrepreneurs. At the risk of sounding like a Benedict Arnold* to my home culture, I hope that these insights prove useful in your dealings with American businesses. For more information about entering American markets, I invite you to read my posts on American Market Entry.
If you are looking for assistance to enter the American market as a technology or professional services company, please contact The International Entrepreneur.
* Benedict Arnold was an American officer in the Revolutionary War with England in the 1700’s. He betrayed the Americans by giving secrets to the British. Even these many years later, to call someone in the United States a ‘Benedict Arnold’ is to call them a traitor.