Boiling the Ocean with a Candle

Posted February 24, 2010 - 1:32pm by Jim Worrell

OceanEach week I speak with dozens of foreign company CEOs, and almost all of them tell me the same story, “USA companies are just waiting to buy our products”. That’s some story, but there’s more! Most foreign CEOs also tell me how few competitors they have in the USA.   It's as if the streets in the USA are paved with gold, and the CEO is going to fly over here and start picking it up! How hard can it be?

 
Unfortunately, few foreign companies understand that they must make a significant investment and have lots of patience when entering the USA market.

Being successful in this market is similar to being successful in any other market... it takes a solid strategy, good execution, and time. And, oh yes, money. No one in America works for free, and when it comes to salespeople, you usually get exactly what you pay for. In the case of commission-only representatives, they cost nothing and they usually deliver exactly that.... nothing.

Some CEOs tell me that they will hire an American sales guy for $5,000 per month. That’s a start, but their budget includes no travel money, no promotion, no trade shows, no mailers, etc. To that I say: "no, no, no".

Things are expensive in America. One week on the road visiting clients will cost an average of $1,500 - $2,000. Distances are large, and salaries are expensive. Office space is expensive. Taxes, insurance, and benefits are expensive.

If you are serious about penetrating the US market, you should expect to spend a minimum of $200,000 per year getting into the market, building relationship, building brand awareness and brand preference. More than likely, $125,000 - $150,000 will go just for the salary of a good business development professional.

Sure, you can do it for less. But you will be throwing your money away because you will never get enough traction to justify the investment. If you are like most CEOs I meet, you will hire a junior sales person (or worse, a commission-only sales person) who talks a lot but delivers nothing. After a year or so, you'll give up and once again focus on your local market.

If you want to develop the US market, make a firm commitment to do so. Dedicate the time, resources, and money to do it right. If you have the patience and the staying power, it will pay large dividends, but it takes time. Don't quit too soon, and don't try to boil the ocean with a candle. You'll end up buying lots of candles, and eventually run out of both money and patience.