Expanding your business into the US is exciting, but the costs can be daunting. One of the biggest challenges in international expansion is budgeting the costs to start your business in the US. These startup costs can add up very quickly. This article will outline the costs to expanding your business into the US, specifically in Miami. It will also suggest some ways you can save money in the process.
Business Registration and Visa
One of the most important costs to start your business in the US is the cost of your business registration and visa. Depending on the type of company you form and the type of visas you require, these costs can add up to over $15,000 for the legal advice and applications alone. If you are applying for an E2 visa, as an investor, the cost can skyrocket to over $150,000. This large cost comes from the investment requirement and other applicable regulations.
Office Space/Physical Location
For your business to have credibility, you will need a physical presence, such as an office space or storefront. Real estate in Miami can cost a pretty penny. In this case, you have a few options:
- Buy Office Space: Stand-alone commercial space in Miami can cost over $300/sq ft. Thus, a 1,000 sq ft office (enough space for 3-4 office suites, a conference room and reception area) can cost $300,000.
- Lease Office Space: You can also lease office space, which can cost just as much, if not more than buying. Office space in Downtown Miami or Brickell can start at $25/sq ft. Many of these offices require a 1-year lease minimum. Thus, a 1,000 sq ft office can cost about $2,500 per month, not including furniture, equipment and Internet/phone contracts.
- Lease Coworking Space: If you are only starting your US operations with a few employees, you may want to consider leasing at a coworking space. Coworking workspaces offer private offices or individual desks, which you can lease based on your needs. Shared workspace in Miami will save you money, and you will have the same amenities as your own office, if not more. Coworking offices at Starthub cost around $1,000 per month, and individual desks cost around $400 per desk per month.
Trade Shows and Conferences
When starting in the US market, it is important to get to know your competitors and your market. So, you will also need to attend trade shows and conferences. The costs to exhibit at a couple of shows per year can be up to $40,000. Although costly, these events can be a very simple way to network with important people in your industry. Networking in this way can bring a lot of value to the growth of your US business.
Travelling may be one of the most frequent costs to start your business in the US. You may need to travel to your home country or different US cities to meet potential clients or investors. The costs for flights and accommodations can be very expensive. One round-trip flight and hotel expenses per month can add up to around $20,000 per year.
Marketing + Communications
Additionally, you will need to market your product to your US customers by hiring a marketing/communications manager. A full-time, mid-level marketing manager in Miami will cost an average of $90,000 per year in salary.
Call Center / Customer Service
Another of the costs to start your business in the US related to labor is customer service. You will need to hire someone to answer phone calls efficiently and manage relations with your customers. They should also speak English fluently and have experience working with customers. The average salary for an experienced customer service professional in Miami is about $40,000.
Finally, you will need a business development manager to identify and develop strategic relationships with partners or potential customers. This is a very important role in your team. You should hire someone who not only knows and understands your market but also takes the time to understand the full value of your product. A reliable, talented employee for this role will cost at least $100,000 per year in salary.
As you can see, the costs to start your business in the US can add up very quickly. Based on these estimations, the total cost for the first year is between $335,000 and $740,000. This process is complicated and expensive. However, spending lots of money on these costs is not the only way to expand your business into the US. One cost effective way to launch into the US without a full financial commitment is with a soft landing.
A soft landing, or soft launch, allows your company to test your offering on the US market. A soft landing solution, which we offer at Starthub, will deliver all of the services listed above, and more. Also, it will be a fraction of the cost. We will serve as your ultimate US development partner. We will co-manage your US subsidiary with you and lead operations alongside your main company. A soft landing solution will save money on hiring full-time employees and other start-up costs. Additionally, it will give you access to resources, office space in Downtown Miami and a team that is already connected to the Miami business ecosystem.
In conclusion, expanding your business into the US can be costly and confusing. However, you could save hundreds of thousands of dollars in start-up costs with a soft landing solution, like the one offered at Starthub. And just remember that despite the costs, you will be entering one of the most successful markets in the world.