The US is a varied place with significant economic differences between states, so it’s worth researching the business opportunities offered by different parts of the country. To help you get started, here are some of the top things to consider, including costs and location. 

Weigh up the pros and cons

The sheer size of the US can make it both a pro and a con. On the pro side you’ve got a huge potential audience as well as a varied choice of cities to base your business in. There are also great road, rail and air networks linking the country. 

The scale of the US does, however, mean you could be hit by transport costs and times. If you’re planning on having an east and west coast office will you need staff to travel between them and do you have the budget for this? Do you need to visit clients across the country and will this travel eat into your profit margins? Do you need to ship products? If so, check how long it will take to get them from your factory or warehouse to your end market as there’s a lot of terrain to cover. 

The process and rules for starting a business can vary from state to state. This might not be an issue if you can be flexible about where you base your business, for example you could choose a state that has low or no state corporate income tax. If you need to be in a particular area or to be based in multiple states then you’ll need to look into the legislation for these states in detail to make sure there aren’t any costs or restrictions that would be prohibitive for your business. 

Consider the costs

As well as the AUD to USD exchange rate there are a number of costs to consider when deciding if expanding to the US will be profitable for your business. 

As previously mentioned, taxes and legislation vary from state to state so to conduct a thorough cost analysis you’ll need to look into state as well as national rules for businesses. For example, only South Dakota and Wyoming don’t charge a state corporate tax, with charges for other states ranging from 2.5% in North Carolina to 11.5% in New Jersey. 

One positive factor is the federal corporate tax, which is 21% in the US, making it slightly lower than the 30% in Australia.  

The US has a large commercial real estate market so you’ll have a great choice of locations if you need a US office, factory or warehouse. As you might expect, prices vary between states. In terms of price per square foot for offices, New York is the most expensive, with LA being significantly cheaper. Cheaper still are Boston, Philadelphia, Chicago and Atlanta with Dallas having some of the most affordable office space. 

Research your sector 

To help you decide if it’s worth branching out into the US market, it’s worth noting how your sector performs. This can provide an indication of whether there’s strong demand for your sector or a potential gap in the market if your sector isn’t already well represented.

Considering there’s no Medicare service in the US, it may come as no surprise that health-related businesses are some of the top performers. The healthcare sector is one of the biggest in the country, with pharmaceuticals, health and medical insurance and hospitals all major sub-sectors. 

Finance and insurance is also a top performer. The US is famous for Wall Street in New York and major finance companies like JP Morgan Chase and Morgan Stanley. As well as health insurance, life insurance is a major sector, as are retirement and pension plans.

Manufacturing is a significant industry in the US. Non-durable manufacturing is a major industry and covers products with a lifespan of a few years or less like clothes, drinks, oil and gas. Durable manufacturing is also big and includes the creation of long-lasting items like cars and household appliances.