It is not easy to organize your business and achieve high profitability. This is especially true in markets where the level of competition is incredibly high. The American market is one of those, but we will try to figure out how to build a business in the USA in 2024: what can and should be done, and what should be avoided.
Business immigration to the USA
America is one of the countries with a developed economy, which makes it very attractive both for ordinary citizens who plan to move or look for work, and for investors. But you need to understand that working in an American company is more likely your goal, but business investment in the USA is a completely different matter: in this case, interest is present not only from your side.
However, there is one circumstance that unites potential employees and entrepreneurs who want to do business in the US. Both of them need to get business visas. The main categories of visas issued for the indicated purposes are L1, EB1C, E2, EB5.
L1 visas are issued for foreign managerial employees who are transferred to work in the company’s office located in the United States. Top managers who have worked in this organization for at least one year during the last three years can count on such a visa.
A specialist can go to a new place of work together with his family (husband/wife and unmarried/unmarried children under the age of 21). But family members need to issue an L2 visa, which is issued for the same period as the L1 visa, and gives the right to work in the US.
Business immigration to the USA for entrepreneurs is gaining more and more popularity. In this case, an entrepreneur is not an employee (even a top manager), but primarily an investor who plans to invest in the country’s economy. There are other types of visas for such purposes.
The EB1C visa is almost the same as L1. It is also intended for foreign top managers who are transferred to work in the USA. But, unlike L1, which gives the right only to official employment , EB1C category visas belong to immigration and legalize not only work, but also permanent residence in the USA.
The E2 visa belongs to the immigrant category and is issued to those who plan to purchase a business in America.
Before applying for the described visa categories, you must complete a Form I-129 petition, submit it to USCIS, and obtain approval.
After that, you can contact the US embassy. Documents to be submitted:
- Application (form DS-160).
- A foreign passport that must be valid for at least 6 more months from the moment of departure from the United States.
- Fee payment receipt. The L visa application fee will be $690 (of which $190 is for processing the application directly, and $500 is the fraud prevention and detection fee). When applying for a category E visa, only the fee for processing the application is paid – 205 USD.
- Photos with photo requirements can be found here .
- Petition I-129.
- I-129 Petition Approval Notice Number.
Another visa category – EB-5 is provided for citizens who plan to invest at least $1,000,000 in the US economy or create/maintain 10 jobs for highly skilled American workers.
Documents for obtaining a visa:
- Application (form DS-260).
- A foreign passport that must be valid for at least 6 more months from the moment of departure from the United States.
- Statements from bank accounts.
- Tax declarations.
- Fee payment receipt. The fee for this visa category is 205 USD.
Forms of business
In the conditions of modern markets, the Internet business, which, on the one hand, is virtual, and on the other hand, is able to bring a solid income, is increasingly gaining momentum. From the consumer’s point of view, this form of business organization is extremely convenient: because you can do so many things literally without leaving your home.
For a business owner, the main thing is not to make a mistake with the type of activity. And before starting active actions, it would be good to find out what Americans buy on the Internet. This will allow you to determine consumer preferences, target segments and conditions of competitors. In the future, based on these conclusions, it will be easier to plan the development of your own enterprise.
However, not every business can be transferred to the Internet format. In the economy of most countries, there are good old forms of business – small, medium and large.
Small and medium-sized businesses in the USA are developing at a fairly high rate. The state supports entrepreneurs by providing loans on favorable terms and giving them the opportunity to strengthen their positions.
Small business criteria under US law:
- annual income does not exceed 2 million US dollars;
- number of jobs – from 10 to 500;
- the value of assets is no more than five million dollars.
In principle, almost any American can create an enterprise. Actually, this is exactly what they are doing, because the share of small businesses in the USA today is more than 90%. This means that the majority of all enterprises in the country are small firms organized by one or two people. It is easy to imagine the level of competition between market participants.
However, Americans are not timid: many decide to start their own business in the hope that someday it will become truly successful. The following types of small businesses in the USA are most popular: health care services (in particular, dentists, psychologists, etc.), consulting services, auto repair shops, catering companies, shops.
Often a small business grows into a medium one. As a rule, this happens due to an increase in turnover, profit and investment.
Medium-sized enterprises enjoy even greater preferences from the state and credit organizations. In addition, from the investor’s point of view, a medium-sized business is a much more interesting object than a small one.
The last form – big business in the USA – is nothing but companies with a world name and a large number of representative offices in other countries. The annual turnover and profit of these business giants is calculated in billions of US dollars, and the number of employees reaches several hundred thousand.
Types of American companies
There are four types of businesses in the US:
- Sole proprietorship. The enterprise is created and managed by one person. However, this does not mean that the business owner works for five, trying to grasp the immeasurable. He has the right to hire staff and distribute responsibilities among employees. In essence, this form of business organization is analogous to a sole proprietorship in the United States.
- Partnership with full responsibility. Each member of the partnership bears unlimited liability for the obligations of the organization. An agreement is concluded between the partners, which highlights the rights, duties and powers, the procedure for the distribution of profits, etc. In the event of the death of one of the partners or his exit from the partnership, the organization ceases to exist.
- Partnership with limited liability. An analogue of the Ukrainian LLC. It differs from the previous type of partnership in that each participant is responsible for the obligations of the organization strictly within the limits of their contribution to the authorized capital.
- Corporation. The authorized capital of the corporation is divided into shares. Each owner of stock is entitled to a share of the corporation’s property equal to that owner’s share of the total number of shares issued. The owner is responsible for the obligations of the corporation only within the limits of his contribution.
Business in the USA: is it easy to organize?
It is customary to believe that it is easy to establish a business in the United States. However, this is a big mistake: it is difficult to organize an enterprise in any country of the world. It is not enough to register a company in the USA or buy a ready-made business, you need to have business skills, intelligence, and the ability to negotiate. Otherwise, you risk going bankrupt in the shortest possible time.
How to create a profitable enterprise
First of all, decide on the field of activity. It is best to do some research and study the needs of the state and city in which you plan to do business. For example, if there are already a million stores selling clothes in this area, then the first million point is unlikely to cause a storm of excitement among the population.
You can try to organize your business in a field that interests you personally. It was not for nothing that Confucius said: “Find an occupation to your heart’s content, and you will never have to work a day in your life.” History knows examples when a hobby became a profitable and successful business.
Specifics of case management
When planning to promote your business, it would be good to take into account some features of doing business in the USA. First of all, they are related to the fact that the country has a large number of programs aimed at supporting entrepreneurs. Their conditions vary from state to state, but this does not change the essence: the state encourages the development of small and medium-sized businesses in every possible way.
The second feature concerns the absolute transparency of American business. This means that there is no question of bribery or tax evasion.
American tax law is quite complex to understand, so many entrepreneurs use the help of tax agents. In this case, the best way out is to hire a competent agent who can correctly calculate, withhold and transfer tax amounts to the budget.
Another point worth paying attention to is the mentality of local residents. Americans are quite friendly and sociable people, so you need to speak the same language with them . They are ready to part with money , but must know for sure that they will receive a really high-quality product or service. Communicate with potential customers and be accountable for what you do for them.
How to open a business in the USA
There are three ways to start a business in America. The first consists in the independent organization of one’s business from scratch, the second – in the purchase of an already established and established business, and the third – in obtaining the rights to use a well-known brand (so-called franchising).
This option is suitable for those for whom “their” business is really their own from beginning to end. In this case, both the development of business plans, and registration, and further development of the enterprise fall on the shoulders of the newly minted entrepreneur.
Independent business registration
The standard business registration in the USA of a business schematically looks like this:
- Obtaining a visa and crossing the US border. In order to be able to develop your business in any country, you first need to enter its territory.
- Provision of premises. The American authorities do not care in which premises – your own or rented – the enterprise will be located. The main thing is the availability of documents confirming the legality of using this real estate.
- Opening an account in an American bank.
- Insurance is a prerequisite for opening a business. As a rule, the main risks are financial losses and liability to third parties. However, insurers can also offer special programs that are designed for a certain type of activity.
- Search and recruitment of personnel.
- Searching for a competent lawyer who will help understand the intricacies of American law. The requirements for clear reasons are higher for non-residents than for local residents, and it will be difficult to understand them without the help of a legal expert.
- Payment of duty and registration.
It can be said that opening a company in the USA is no more difficult for a citizen of Ukraine than for another foreigner, because the registration procedure is the same for everyone, but the costs may be different. You can reduce the costs of opening a business by, for example, renting (by renting a relatively inexpensive premises) or insurance (by choosing the simplest risk protection program).
Opening of a branch of the company in the USA
Many companies strive to enter the international market. First, you need to find foreign partners and establish cooperation.
Suppose a Ukrainian company plans to promote its services on the American market. She desperately needs partners in the USA, so that with their help it is possible to declare herself and form a certain opinion among potential customers.
If the US market accepts the company, and Americans show interest in its services, it makes sense to think about opening a branch in America. By the way, opening a branch is somewhat easier than organizing a business from scratch:
- First, the authorities are much more willing to give visas to those who really know what business is and how to run it. And if you are the owner of the company, then with a high probability you have the necessary knowledge.
- Secondly, opening a branch is also an investment in the US economy. What country would refuse a possible income? Certainly not America. And the state does not risk practically anything: in the event of failure, you will be the first to suffer, since all financial, time and moral costs will be useless.
Buying a ready-made business
Buying a ready-made business is much easier than initiating the process of registering a new enterprise. Everything is thought out for you: finding premises, hiring staff, setting up business processes – these tasks have already been completed by the current owner.
Suppose you decide to buy a ready-made business in New York. Let it be some small shop or, for example, a bakery.
Perhaps, you should start by studying financial documents, collect something like the statistics of the enterprise. Considering how strict the American law treats entrepreneurs, the owner is unlikely to be able to pass off an unprofitable establishment as a profitable business.
Pay attention to whether taxes were remitted on time, whether wages were remitted to employees late, in which direction the volumes of production / sales / provided services changed, what the results of the enterprise’s activity were as of the last year (profit or loss) and what their dynamics were during the previous years.
If the company was not profitable or, even worse, suffered a loss, it is at least pointless to buy it. If a small but stable increase in profit was observed, then, apparently, the business is developing and justifies the investment of the owner.
How to sell a business
There are two ways to sell a business: independently or with the involvement of an intermediary.
In the first case, the owner of the company is looking for a buyer himself: he posts information on the relevant websites, looks for a buyer among friends/acquaintances/relatives, advertises in newspapers.
If an intermediary is involved in the case, then the solution of all issues related to finding a client and concluding an agreement falls on his shoulders. True, the services of agents and brokers are not free, this should be taken into account when planning the costs of selling a business.
After the buyer is found, the stage of document verification, study of analytical data and performance indicators will begin. If the buyer agrees, the sale will take place and the business will then be re-registered to another person.
Franchise
Another way to organize your business is franchises in the USA. The essence of this phenomenon is that you buy the rights to use a well-known brand, conduct business on its behalf, receive the support of the owners and regularly transfer to them a stipulated percentage of profit.
However, in this case, you have practically no right to freedom of action: you are limited by the internal rules adopted in the main company.
How to make a business successful
Unfortunately, there is no single recipe for success. It also happens that the most brilliant idea fails, and the most ridiculous one brings millions. However, it is probably possible to single out factors that in one way or another affect the development of your business:
- Personnel. “Personnel decides everything” is a well-known phrase that has a deep and correct meaning. Employees are living people, without whom your company will cease to exist (unless, of course, you implement full-scale automation of all operations). Bet on professionalism and hire only qualified employees who are able to perform work well and take responsibility for its results.
- Capital. If you have the opportunity to regularly invest money in business, approach this issue wisely: develop new products, invest in information technology, optimize business processes.
- Loyalty to customers. Creation of a loyalty program, system of discounts and incentives, special programs for certain categories of your target audience. And don’t forget about personal communication: wish a good day, offer an elderly person help with the delivery of purchases. Ordinary human attention and involvement can help retain existing customers and attract new ones.
- Competitiveness. Try to offer customers what others cannot or do not want to offer: new services and options, a more attractive price-quality ratio.
- Taxes. Here there can be only one advice: pay and sleep peacefully. The American tax law does not allow violations, the fines for non-payment of taxes are impressive, and if the company is owned by a foreigner, then deportation with a subsequent ban on entry to the USA is very likely.
It is very difficult to single out the most profitable business in America, since there is no official analytical data on this issue. However, you can refer to the structure of the US GDP, according to which 78% falls on the service sector (with trade being the leader in this sector), 21% on industry and only 1% on agriculture.
The most promising directions for organizing your business are probably the opening of retail outlets, firms providing various services (from household to accounting) or catering enterprises.
Conclusion
All forms of business are represented in the US economy: small, medium and large. The main organizational and legal forms are private entrepreneurship, partnership (general or limited liability) and corporations. Private entrepreneurship is the most popular.
A foreigner can organize a business in several ways: create his business from scratch, buy out an enterprise or use a franchise.