Ever dream of expanding your business to the United States? We had that same dream, and after spending nearly two decades in Bucharest providing remote software development services across the globe, we finally decided to take the plunge.
4 Things to Consider When Choosing a U.S. City
- Tech ecosystem, including talent, incubators and support organizations
- Affordability of office space and employee housing
- Cultural diversity and acceptance of immigrants
- A client base for your product and services
Although around 70 percent of our projects are developed for U.S. clients, our desire to be closer to them and to communicate more easily with them led us to take this step.
Landing in a new country and flourishing in one’s city of choice as a foreign company has its challenges. We learned crucial lessons that we want to share with you.
Choose the Right City
Considering the vast and diverse landscape of the United States, the first critical decision to make is exactly where in the country you should set up shop.
Each city offers a unique blend of talent, resources and business climate. Major tech hubs like San Francisco, Seattle, Austin and New York City boast a dense concentration of skilled developers, investors, and client base but be prepared for higher competition and living costs.
For us, a perfect fit would be a city that offers a strong tech ecosystem but is still affordable and has a culture that matches our values. While Silicon Valley initially grabbed our interest, its notorious high cost of living did not align with our long-term vision. We’d rather invest our resources in our team and technology to ensure overall business sustainability.
We had heard about Chicago’s thriving tech scene from four key clients based in the area. As we dug deeper, we found a lot of things to like, but what resonated with us most was its cultural diversity. With more than 1,200 minority-owned startups, Chicago ranks as the most immigrant-friendly out of the 100 largest U.S. cities.
Chicago is home to more than 245,000 tech professionals and 78 incubators and accelerators, making it an ideal choice for a team like ours, which is always on the lookout for collaboration. It did not take us long to realize that Chicago offered the perfect springboard for our U.S. expansion.
With our Chicago-based clients and an old friend already in the area, the city also offered a familiar base to build upon and opening our first office here felt natural. Chicago felt like a community we could truly belong to, a place where we could build meaningful partnerships and grow a business.
Takeaway: The best city for your business depends on your unique needs and priorities. Consider infrastructure, access to the talent pool and the local tech scene and prepare accordingly. Carefully review all available options and make a note of affordability and overall culture.
Understand the Market
The foundation of any expansion strategy is market research. If you want to be local, it’s important to assess the demand dynamics before taking any action.
Our journey wouldn’t have been the same without Claudia Ecobici, a market strategy expert who has been running a business consulting office in Chicago for years. Her deep understanding of the local business landscape and marketing strategies proved invaluable. She created an entire market penetration strategy that allowed us to identify our strengths, stand out from competitors, and breathe life into our marketing campaigns to resonate best with the Chicago audience.
Unlike the fiercely competitive atmosphere of the major tech hubs, we found a strong sense of collaboration in the Chicago community. To resonate with this collaborative spirit, we used our agile methodologies and people-first approach to build genuine partnerships instead of engaging in cutthroat competition.
We discovered that Chicago’s rich immigrant history and diverse communities valued authenticity and genuine connections. Claudia advised highlighting our homegrown talent and showcasing our commitment to building with the local community for the long term.
Takeaway: Every city has its own cultural quirks and preferences. Conducting comprehensive research by hiring a local business consulting company can provide priceless insights into a target city’s customer preferences and market gaps. Partnering with local experts also helps reveals a city’s cultural soul and helps you tailor your approach to foster deeper and more meaningful connections.
Prioritize Compliance
After finding the perfect office space, we prioritized navigating through business registration, tax implications and other regulatory requirements specific to Illinois and Chicago, for instance payroll, insurance and taxes.
We were fortunate to have found and enlisted the invaluable help of Vincent Petrescu, a local CPA who became our trusted advisor throughout the process.
We started by choosing the right legal and financial framework for HyperSense Software U.S. to navigate some specific restrictions the United States has for businesses with foreign ownership (non-U.S. citizens cannot own shares/membership into a pass-thru entity). Vincent assisted us in carefully evaluating various options for our legal entity, banking partners and accounting system. We also decided to hire members of our Chicago team locally; this team will collaborate remotely with our Bucharest HQ and international teams.
Takeaway: Save your business from potential legal issues, fines or penalties by connecting with local experts who have in-depth knowledge of the regulatory landscape, nuances of local laws and potential compliance pitfalls specific to the region. Consider having a local advisor on retainer to keep your business stay abreast of any changes or updates to regulations.
Establish a Presence
Our business philosophy has always been based on trust, which is something that you have to work for. To gain the trust of our potential clients, we established an honest and transparent channel of communication by revamping our website and social media channels. Our CTO, Andrei Neacsu, also pens think pieces on Forbes as a member of the Forbes Business Council.
We publish regularly on our blog page, providing readers with information about our company, our expertise and our previous successful projects. Reviews from former clients have helped, too.
We localized our marketing efforts by building relationships with local businesses, industry groups such as 1871 and professionals who could provide referrals or introductions to potential clients. We also attended networking events, seminars and conferences to increase visibility and establish credibility within the community.
We connected with nonprofit organizations such as the World Business Chicago and Schaumburg Business Association, which helped a lot in getting us settled in. We were also fortunate to collaborate with leading accelerators in the area, setting us on the right path for entering the local business ecosystem.
Takeaway: Gaining supporters in a new city helps hasten the acceptance and expansion of your company. Local alliances offer a powerful support network, helping you comprehend customer behavior in the area, making suggestions, or even putting you in touch with community members.
Anticipate Challenges
Thriving in a highly competitive market such as the United States is far from easy. Avoid the misconception of immediate success and be prepared for challenges.
One thing we learned was that while Chicago costs are lower than some major tech hubs, office space and talent costs are still higher than what we have been used to. This is why, when we set our company’s budget for this expansion, we made sure to factor in employee salary adjustments and other potential costs.
We also realized early on that cultural nuances significantly impact employee and client behavior. While our European incentive programs, work procedures and motivating techniques have been successful, we had to rethink our approach to align with local expectations and preferences.
Because Chicagoans possess a deep sense of local pride and community spirit, we reached out to local businesses to offer a free workshop to show our commitment to becoming a valued member of the Chicago ecosystem. Locals also generally favor direct and honest communication style in professional and personal settings, which slightly contrasts with our more reserved European approach. Since our move, we have adapted our communication style to be more upfront and clear.
Takeaways: Tapping the vast potential of the U.S. market comes hand-in-hand with significant challenges. Be flexible to adapt your approach to local expectations and preferences. One can’t be too prepared to face them head-on, so use every relevant resource available.
