Starting Up and Marketing
in the U$A
A Guide for Irish Technology Companies
Contents
Section 1 – Background and Overview
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Introduction
Current Situation
Necessary Research and Preparation for Market Entry
Section 2 – Marketing Planning and Strategies
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Introduction
Brand Positioning
Goals
Strategies and Tactics
Product Decisions
Pricing
Designing Promotion and Communication Strategies (including PR)
Channels and Distribution (see section 3 on Selling Strategies)
Promotional Ideas for a Small Budget
Corporate Marketing Communications
Web Marketing
Section 3 – The Sales Team
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Introduction
Recruitment and Selection
Employment and Compensation
Employee Retention
Cultural Factors
The Marketing and Sales Cycle
Selling Strategies
A Guide to Presentations
Effective Networking, Trade Fairs, Conferences
How to Retain Customers
Section 4 – Legal and Financial Issues
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Introduction
Getting Started
Choosing a Legal Entity
Visas and Work Permits
Accountants
Banking in the US
Venture Capital and Financing
Section 5 – Operational Issues
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Introduction
Where to Locate and Why
Finding a Suitable Office Space and Location
Adapting to US Standards
Telephone and Internet Access
Office Furniture, Equipment and Stationery
Enterprise Ireland’s Services in the US
Bibliography
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Background and Overview
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Introduction
Information Relating to the Guide
Current Situation
Necessary Research and Preparation for Market Entry
Introduction
The US is the world’s largest software market and has traditionally been a key target market for
Irish technology companies. In recent years, the US software industry has been characterised by
the entrepreneurial flair of many of the founding companies who became industry leaders. This
characteristic lends itself greatly to growing Irish companies who need to expand quickly and
establish themselves in a new market. The Irish software industry is well recognised in the US
which further enables upcoming Irish technology companies to better position themselves to
target this market. The growth of the Irish software industry here has been exponential - in 1993,
for instance, nine Irish software companies had offices in the US, with that figure rising to 180 by
2003.
Irish technology companies have generally been attracted to three geographic locations: New
York, one of the three “world cities” that control world finance, the Boston / New England area,
with the largest concentration of universities and colleges worldwide, and finally, California, one of
the most concentrated technology clusters in the world.
The US offers an overall market of 290 million people and one of the world’s strongest
economies. However, the marketplace differs from that of Ireland and the UK in many ways.
Large, aggressive, dynamic and multicultural, the US market offers as many challenges as it does
opportunities to Irish technology companies. The most important challenge for an Irish company
entering this market is to find the right marketing approach. Marketing in the US is about
identifying, conceptualising, communicating and satisfying the wants and needs of clients and
partners. It is about having a meaningful understanding of the market and the people within it.
This means not focusing solely on the final consumer, but on all people with whom you interact if
you want to successfully break into, and stay in, the world of opportunity that the US represents.
Entering the US market is an expensive process and is not to be undertaken lightly. It requires
considerable time and focus from senior management as well as careful estimation of the costs
involved, and assumes adequate funds are available.
Information Relating to this Guide
This guide aims to provide a framework for Irish technology companies to assist them in setting
up operations in the US and to think through the marketing issues that need to be considered in
this intensely competitive market. The guide provides insights into every aspect of the process of
starting up and marketing in the US and relates them specifically to the US marketplace. It
provides useful tips on the sales team, marketing planning and strategies, legal and financial
issues (including venture capital) and operations. It includes specific information on Silicon Valley,
the Boston / New England area, and New York. Where possible, references and internet
addresses have been provided to help you further.
Starting Up and Marketing in the USA updates and combines the essence of the two earlier
guides produced by Enterprise Ireland – Starting Up in the USA and Marketing in the USA. Given
its nature, the important elements of each topic can only be discussed in brief. Readers are
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advised, therefore, to seek further input on those topics that are crucial to their success in the
market.
It is hoped that, with the help of this guide, Irish technology companies will be able to enter the
US market knowledgeably, confidently and, most importantly, successfully.
The Role of Enterprise Ireland
Enterprise Ireland provides many services to help Irish technology companies assess their sector
in the US market, plan for market entry, network, gain customers, set up an office, provide office
space, and recruit staff. The appendix gives contact details for the US offices of Enterprise
Ireland and lists the services that Enterprise Ireland offers in the US market.
While care has been taken in the writing of this document, Enterprise Ireland accepts no
responsibility for any errors or omissions. Enterprise Ireland cannot vouch for the credentials or
character of all the contacts and/or company names provided.
Current Situation
The US economy experienced rapid growth throughout the 1990s. By 2000, the economic
downturn had begun, and by early 2002, the economy had effectively stalled. Spending levels in
many sectors, such as telecommunications and finance, have plummeted. However, the US
economy is very resilient and the indications are that it will show steady growth in the years
ahead.
In fact, in Silicon Valley, industry analysts believe that the current economic downturn has
spurred a new wave of innovation. An increasing amount of resources are being invested in R&D
projects that are more likely to succeed in the marketplace. Companies are now, more than ever,
seeking technologies that reduce time and resources in the production process, driving the
demand for effective hardware and software to meet their needs.
This has in turn created a demand for faster and more efficient technologies with Silicon Valley
leading the drive. "In 2003, the hangover will be largely irrelevant; the economy will be
paramount. Recent discussion with influential IT buyers led to an inescapable conclusion: while IT
spending is low, IT user needs are high. If the economy improves in 2003, no segment is likely to
experience a more profound recovery than technology" (Arnie Berman, Chief Technology
Strategist at the Sound-View Technology Group).
Given the current state of the economy and the low spending levels in many sectors, US high
tech companies have become highly cost conscious. This has created an opportunity for Irish
companies seeking to establish themselves in the marketplace to leverage their cost
competitiveness and value in order to gain market share.
It is true to say that venture capital investment also took a big hit in the same period. In the late
1990s, entrepreneurs could secure hundred million dollar valuations for their companies based on
little more than a business plan. After the burst of the dot.com bubble, venture capital companies
went back to basics. They now have concerns regarding the front-end and back-end of the deals
they are evaluating. On the front-end, they are concerned that young companies are going to
have difficulty gaining traction in terms of customers and revenues, due to the lower levels of
technology spending. On the back-end, they are concerned about low valuations and lack of
liquidity.
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“Neither the venture capitalists nor the entrepreneurs are impervious to business cycles or the
public markets”, says Tracy Lefteroff, of the venture capital practice at PricewaterhouseCoopers,
“entrepreneurs must recognise the fact that only the most fundamentally sound deals get done.”
Sectors that currently hold the promise of growth include biotechnology, nanotechnology, mobile
and broadband communications, and productivity improvement software.
For the most current information on the US economy and venture capital investment go to
www.pwcmoneytree.com.
Necessary Research and Preparation for Market Entry
The US market is highly competitive and does not allow for second chances. Therefore, thorough
research, analysis, planning and preparation are needed before entering the market to sell your
product or service. The following is a checklist of key areas to research and address prior to
market entry:
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Target Market.
Market Drivers.
Industry Revenue Patterns.
Size of the Market Opportunity.
Analysis of Competitors.
The Company’s Strengths and Weaknesses.
Analysis of the Opportunities and Threats.
Legal Structure.
Financing Requirements.
Resources Needed.
Management Team.
Compensation.
Geographic Location.
Visa Requirements.
Home and Personal Issues.
Have you consulted with Enterprise Ireland to discuss your plans and find out
how they can assist you?
Carrying out the above analysis and preparation will give you the best chance for success.
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Marketing Planning and Strategies
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Introduction
Brand Positioning
Goals
Strategies and Tactics
Product Decisions
Pricing
Designing Promotion and Communication Strategies (including PR)
Channels and Distribution (see section 3 on Selling Strategies)
Promotional Ideas for a Small Budget
Corporate Marketing Communications
- Effective Marketing Materials
- Elevator Pitch and Speeches
- Implementation
- Evaluating Results
Web Marketing
- Rules for your Website
- Increasing the Visibility of your Site
Introduction
It is recommended that marketing planning be carefully formulated in Ireland before arriving in the
US. Nonetheless, note that situations are likely to arise that were overlooked or that you will find
aspects of your plan are not viable in a US context. The important thing to keep in mind is that
strategy emerges from the network of employees, customers and partners you put in place.
Customers help drive strategy so the earlier and more often you engage with them, the sooner
you will develop an effective marketing plan. The greater the amount of uncertainty in the
environment, the greater the need to pay attention to changes in the market and to act on vital
information.
The following are the key aspects of your marketing efforts that we suggest you look at before
your arrival and re-examine on a regular basis to ensure you remain informed and competitive.
Brand Positioning
Positioning is the core marketing element. It provides the focus for your sales team, and for your
partners. It tells your potential customers what differentiates you from your competition. Your
company has a de facto position and brand, whether you intend it or not. Therefore you need to
do all you can to develop it and articulate it the way you want it to be.
A Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis will already have been
completed in the planning process prior to expanding into the US. The answers to the following
questions will help you clearly position your brand for market entry.
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Who are you primarily selling to? Target Audience
How do you want your business/brand to be perceived? Brand Identity
What are the products or services you offer to meet the client’s needs?
Description
What is the key unique benefit/advantage you offer that is different and
meaningful to your customers? Value Proposition
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Articulating the value proposition is key to getting the interest of your prospects.
The Value Proposition
Note that your key advantage is a benefit that is unique to your company. It is something that:
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Your prospects want.
They can't get elsewhere.
It distinguishes you from your competition.
It is the cornerstone for all of your marketing activities and will meet four criteria:
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It is a positive benefit, being something your prospects need.
Nobody else offers it. The more unique and hard to copy, the better.
It can be stated simply.
It can be communicated verbally and visually.
Remember that your offering is more than just your product or service. For more information on
product offering, refer to “Effective Marketing Materials” and “Elevator Pitch and Speeches” in
Section 2 under Corporate Marketing Communications.
Goals
It is worthwhile having specific goals for each market that are attainable.
Attainable goals are SMART:
Specific
Measurable
Attainable
Realistic
Time based
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How much business do you have now (number of new clients, revenue,
market share)?
What is the specific goal (number of new clients, revenue, market share)?
How will the goal be measured?
How believable and attainable is each goal?
How realistic are your goals based on the resources and time you have?
What is the timeline for accomplishing the goals?
Strategies and Tactics
A good way to start formulating strategy is by reviewing the past year’s strategy and
performance. Some areas to look at include:
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What worked and what did not work?
What were your goals at the beginning or throughout the year?
What 20% of your Irish customers generated 80% of your business and
does that relate to the US market?
Which were the most profitable?
How did people find you?
What customer needs did you satisfy?
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What marketing efforts produced little or no results?
Marketing strategies that work in Ireland may not necessarily work in the US but this is a
good starting point. Pick the two or three strategies that were most cost-effective and gave
you the best results. Focus your efforts here and make any adjustments needed to adapt to
the US market.
For established companies, a rule of thumb says that 30% of the marketing budget goes to
prospects, 10% goes to your general market or region, and 60% goes to existing customers.
However, at market entry this may look very different and 60% of your budget may target
qualified prospects.
The marketing strategy concept differs from the selling concept, primarily by focusing on the
needs of the buyer as opposed to the seller. The issues to consider include:
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Carefully defining your target market.
Customer orientation – where your customers’ needs are identified, from
their perspective, and then met, creating customer satisfaction.
How is this done? By coordinating marketing activities, including working with
your sales team on pricing, trades shows, public relations etc.
The key goal is to make a profit and effective marketing can do this best by
satisfying and even exceeding customer needs – above and beyond what
your competitors are doing.
Product Decisions
In preparing your product or service for export, here are some questions that are useful to
answer:
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Does the product or service need to be localised and, if so, how?
What labelling and packaging changes, if applicable, need to be made?
Who will be installing the product?
What kind of warranties are on offer?
Who will provide a follow-up service?
What documentation is required to support the product or service?
Is the documentation localised for the US market?
Do we have a product demonstration to show prospective clients?
How will the product be distributed? (see Selling Strategies, under Sales and
Marketing in Section 3)
How will the product be priced and what is our pricing policy?
What is the product life cycle and update strategy?
Pricing
Pricing is one of the most important determinants of market share and profitability. Carefully
planning pricing strategies is critical therefore, especially when entering a new geographic
market. It is a major factor for your potential buyer and will also be the only element of your
marketing efforts to generate revenues rather than costs.
Some Common Pricing Pitfalls to Avoid
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Too cost oriented /focused.
Not revised sufficiently to adapt to market changes.
Not flexible enough to accommodate different customer or market segments.
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Not part of the positioning strategy.
Your company should determine where to position its product or service in relation to two key
factors – quality and pricing. For example, if your product quality is high and your price is low,
your strategy is described as “great-value”. Conversely, if you have a high quality product and
your price is also high, you are adopting a premium pricing strategy.
The following is a guideline to help you develop your pricing policy.
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Pricing objective – in relation to your marketing objectives.
Determining demand – in new sectors look at uniqueness and benefit to
customers.
Estimating costs – both fixed and variable.
Analysing competitor prices/offers – match like for like.
Selecting a pricing method – mark-ups, market price, perceived value, target
return.
Selecting a price - weighing all the factors and making a decision.
Designing Promotion and Communication Strategies
The type/s of product or service will determine the importance of your promotional strategy.
For business-to-business products the strategy differs from that of consumer goods. Typically, a
push strategy is used where the sales force is primarily concerned with reaching the end user
either directly and/or indirectly using channel intermediaries. It is wise to assess the promotional
activities of direct and indirect competitors. Quality is a hallmark of most US promotional
strategies and materials so be prepared to at least match, if not exceed, their efforts.
Survey results and interviews with successful Irish client companies in the US indicate that the
following are the most important promotional tools for industrial goods.
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Personal Selling
Sales Promotion and Incentives
Trade Shows
Lead Generation and Direct Marketing
Public Relations
Enterprise Ireland can help with lead generation, trade shows and public relations.
Personal Selling
This is the most effective tool when the buyer is in the process of evaluating alternatives to
your product or service and building a preference for what you are selling. You can address
the customer needs specifically and provide information required in the decision-making
process. It also starts building customer relationships that may yield greater rewards over the
long term.
Sales Promotion & Incentives
The most cost-effective promotional tools for your sales team include a presentation, a
brochure and a website. Driving prospective clients to your website should give them more
detailed information including your work approach, clients, white papers and case studies.
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Some incentive may be extended to the prospect or client in order to win the sale. Many
companies initially offer their product or service to a client at a deeply discounted rate, both to
establish a relationship with them and to acquire some performance results from a reputable
name that can be leveraged for future sales.
Trade Shows (also see Section 2)
Respondents to our survey indicated that this was one of the most effective strategies for
them in the US. It is important to plan well in advance to attend a trade show, not only to take
care of the logistics but also to strategise how you want to work the show.
Two very important practical areas to prepare before the show are:
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Getting very comfortable with your 30-second elevator pitch, 5-minute lobby
speech and 15-minute latte speech.
Organising a lead generation system at the booth.
Lead Generation and Direct Marketing
A typical lead generation system looks like this:
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The lead generator learns about the company and their objectives.
A profile of preferred customers is gathered including market segment,
company size, location, target person.
Raw data is gathered on companies that match this profile.
The results are evaluated and matched to the clients’ specifications.
A list of targeted companies is developed.
The right person to target is found.
The lead is followed-up on to assess level of interest. The company may
express current interest, no interest or future interest.
This feedback is then shared to determine the next steps to market directly to
these qualified companies.
Enterprise Ireland, in its overseas locations, is heavily focused on lead generation activity for its
clients, covering all of the steps described above. Clients contribute toward the cost of
undertaking this work. To initiate a project, contact either your Enterprise Ireland Development
Adviser or the Marketing Adviser in your chosen markets.
Public Relations
It is tempting in difficult times to do without a public relations agent or agency. Companies often
tend to view public relations as an after thought, or do not even consider it in their marketing
efforts. However, public relations agents and firms provide many marketing roles beyond
managing media relations so it is wise to not overlook their importance.
Hiring a public relations consultant that has strong industry experience in your sector can prove to
be invaluable in several ways. He or she can help:
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Develop good and steady relationships with your trade media.
Provide media training to key executives that act as spokespeople.
Complement and create synergies with your other marketing activities.
Provide an outside perspective on your activities and results.
Deliver bad news to the press.
Mitigate bad news and help in crisis management.
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However, if you cannot afford a public relations consultant or firm, there are some activities, such
as sending press releases, that you can manage yourself. These can also be posted on your
website and e-mailed to prospective and current clients.
When developing and implementing your own public relations programmes, bear in mind to:
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Narrow your focus and target the print, radio and TV media in your market
segment only.
Use a template to format your press releases. If you don’t already have one,
you can find one easily on the web. One good source is the Microsoft
Template Gallery for Small Businesses where you can download all types of
templates from this address:
http://officeupdate.microsoft.com/templategallery/
Follow up to see if the press release was received and inquire who the right
contact person to speak with is.
Stay in touch with your contact editors or reporters and when you have new
or time sensitive information that pertains to you or your field, share it with
them to build the relationship and credibility.
Promotional Ideas for a Small Budget
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Create and distribute case studies and white papers. Co-present at a trade
show seminar by supporting a speaker with a good case study.
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Undertake an e-mail promotion using e-mail addresses from so-called "optin" lists and gathered from qualified prospects that visited your website.
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Write articles for newspapers, local business magazines, trade publications,
and print and electronic newsletters.
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Alert customers, prospects, analysts and qualified leads when you post a
new case study or white paper on your website.
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Find public speaking opportunities where you know you will have a qualified
audience.
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Include your company name and contact information in your e-mail signature.
If you have just launched a new product and have a demo on your site,
include a line about that too. Keep your signature current and relevant to
events in your business.
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Get links to your website placed on trade association, local Chamber of
Commerce, trade show, networking and other relevant websites.
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Invest in high quality marketing materials to get started – business cards, a
brochure and stationery.
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Use relatively low-cost software such as SitePromoter (www.sitepromoter.com)
or services such as Submitit (www.submitit.com), which will let you
automatically submit your website to search engines and directories and will
also check your ranking with them. But keep in mind that traffic will come from
the larger search engines such as Google, Yahoo, etc.
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Develop referral partnerships that offer non-competitive services or products
to your target audience and get reciprocal links to each others websites.
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Gather strong testimonials from clients and include them on your website and
brochure.
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Issue press releases on new products or services but make sure that your
news is relevant and has a hook to catch the attention of the press.
Corporate Marketing Communications
Effective Marketing Materials
Knowing what your brand positioning is and creating your messaging are essential for developing
effective marketing materials (see section 2 on Brand Positioning). Marketing material
incorporates and communicates your positioning, and requires constant evaluation of the
effectiveness of your message. From there, you will develop your elevator pitch and other speech
materials. It is helpful to gather competitors’ materials to learn how they position themselves and
see the quality standards that they uphold in their materials. US companies tend to be very good
at brand positioning.
Creating your Positioning
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What are the pain points or problems your audience needs addressing?
What is different about what you do – what are your strengths?
What solutions/benefits do you provide to solve the above problems?
Communicating your Positioning
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What are the most important and meaningful differences to promote?
What information does your reader need and at what level of detail?
What is the most clear and concise way to communicate a single message in
a distinctive way?
Do you have the necessary logo, business cards, brochures, fact sheets and
website to support the sales team?
Evaluating your Message
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Evaluate the message based on desirability (inform), exclusiveness
(persuade), believability (reminds).
Does the headline and graphic (if used) summarise the value proposition?
Do you have strong endorsements or testimonials?
Are the tone, manner and image consistent with what you want to create?
How can you better differentiate your company’s services?
How can you better describe the benefits and motivate the buyer to make a
choice?
Your materials are most effective when they address the following areas:
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Your clients’ problems.
How your products and services address those problems and provide
satisfactory results.
How your approach/solution/results/experience is the best choice – your
unique value.
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Testimonials and case studies that illustrate the solution you provided and
the results that ensued. If you can benchmark these against industry
standards, all the better.
Background information on your business including relevant projects, clients
and philosophy.
Your work process so that they are comfortable with how you start working
and the steps involved.
Elevator Pitch and Speeches
In the US, opportunities to talk about your company are abundant because business is commonly
talked about outside of the workplace. Be ready to clearly and concisely communicate why
someone should do business with your company. It is important to develop three distinct pitches
and speeches to fit with the various opportunities to speak with prospective clients:
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The 30-second elevator pitch.
The 5-minute lobby speech.
The 15-minute latte speech.
Here is a template for developing a 30-second elevator pitch:
I work with…
Who want, or are ready to…
So that…
Because…
Target audience
Solution or desired end result
Value proposition – positive benefit
Situation or problem
And an example could be…
I work with e-commerce companies
who want high performance e-security systems
so that their customers no longer have to wait on line before being able to access their
products and services securely
because right now the customer experience is unsatisfactory
Implementation
Implementation is about turning the plan into action to achieve the stated objectives: who does
what, when and how?
Some of the questions that need to be answered include:
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What support do you need to implement a plan?
What resources do you need relating to time, money, people?
Who does what?
When should it be completed?
How will it get done?
Who and how will the plan be managed?
What team members need to be informed?
What action items will be delegated to them?
What can you do to motivate and reward the team for a successful job?
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There are four key skills for effective implementation of marketing programmes:
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Allocating skills – budgeting time and financial resources (for example, how
much to spend on an advertisement).
Monitoring skills – evaluating the results of the marketing actions.
Organising skills – developing an effective working team.
Interacting skills – ability to get things done by influencing people.
When evaluating results and performance here are some of the questions that help in fine tuning
the process:
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What were the client’s expectations?
Where these met, not met or exceeded?
If not met, did you overspin your pitch?
What would you do differently?
What are some ways that you can keep in touch with old clients and get
referrals?
If met and exceeded, how can you continue to improve your service and
performance?
Are the needs of your clients changing?
How many leads did you get from your site and what adjustments might you need
to make to improve the numbers?
Web Marketing
In the US market, a heavy emphasis is put on the quality of your website and much use is made
of it. Some useful guides for your website include:
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Focus your home page on your target audience and their needs. Focus your
site on the US market. This includes using US spelling. Also, be aware that
many people in the US may not understand common Irish business sayings.
You may want to touch base with an Irish contact working in the US to get
some advice.
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Indicate that you understand what’s important to your target audience and
that you offer what they need. Clearly state your solutions to their problem.
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Make sure the tone of your site is friendly, credible and represents your
company accurately.
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Demonstrate your expertise in some compelling way with the likes of
testimonials, key clients, case studies, white papers, and the backgrounds of
top management.
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Get the visitor to take one action. Guide EVERY visitor to take at least one
step towards learning more about your company and wanting to contact you.
Some ways to do this include:
- White papers in PDF format
- Capturing e-mail addresses for lead generation
- Offer a free consultation
- Make a specific offer and provide a US phone number.
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Be consistent in look and feel. All your marketing materials need to be
consistent in image and consistently communicate the same message. Be
sure the site reflects how you want to be perceived by your clients.
Increasing the Visibility of your Site
What do you need to do to show up in search engines? It is both a complex and simple issue. It
is complex because search engines often change the criteria that will ensure your site gets a high
listing in the results of the major engines. It can also be simple if you pay attention to a few key
fundamentals about keywords and search engines.
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Keywords
Know what keywords are used to find companies like yours. Take a look at the Keyword
Suggestion Tool to find out: http://inventory.overture.com/d/searchinventory/suggestion/. This site
lets you know what keywords are searched for most often and will help you draw up your list of
keywords for submitting to search engines.
Where to put keywords on your website is equally important. The four most important areas to
place keywords are:
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The Title Tag.
Description Meta Tag – Include a sentence here that contains both the
keywords and a phrase such as your value proposition. For example, a good
marketing phrase is, "A process improvement consultant can dramatically
decrease the cycle time in manufacturing."
Keywords Meta Tag – Include a few keywords like your business name and
US address.
Body Copy – be sure to include your main keywords in the first few
paragraphs in particular.
Get Listed in the Leading Search Engines
After you have found the best keywords and put them in your website, the next step is to get
listed in the top search engines. These are:
Google
All the web
Yahoo
Search MSN
Lycos
Ask Jeeves
LookSmart
www.google.com
www.alltheweb.com
www.yahoo.com
http://search.msn.com
www.lycos.com
www.askjeeves.com
www.looksmart.com
Some of the above search engines impose a fee to be listed. The key thing is to pay close
attention to their submission processes and the information that is required.
15
The Sales Team
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Introduction
Recruitment and Selection
Employment and Compensation
Employee Retention
Cultural Factors
The Marketing and Sales Cycle
Selling Strategies
A Guide to Presentations
Effective Networking, Trade Fairs, Conferences
How to Retain Customers
Introduction
Setting up an office and recruiting a sales team in the US requires a considerable investment of
time and money. Many Enterprise Ireland client companies who have been effective in setting up
business in the US carefully selected one of their own Irish executives to re-locate and manage
the process. It is imperative that this person should be briefed on US legislation concerning
recruitment practices. Expect compensation for Irish employees re-locating to the US to be
higher than the Irish equivalent, although US compensation packages are no longer as high as in
previous years.
The downturn in the US economy has heavily impacted the sales cycle and the strategies to win
new business. As a result, detailed and continual analysis of customers and a focus on problem
solving is more important that ever. The key selling strategies are outlined in this section – Selling
Directly, Selling Indirectly, or Using a Mixed Strategy. The most cost-effective methods, as
experienced by our survey respondents and interviewees, currently used to grow sales are also
referenced.
Recruitment and Selection
When establishing a presence in the US, client companies have used an Irish executive in the
initial stage, or someone with experience of Ireland, who closely matches the following profile:
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A strong vested interest in the company.
10-15 years industry experience.
Hiring experience in building a diverse team and the ability to hire his/her
replacement.
Culturally sensitive and preferably previous US work experience.
A strong spokesperson and presenter for the company who can clearly
articulate the company’s vision and what differentiates it from competitors.
Allows strategy to be driven by the people closest to the action at the
business level.
Prepared to work hard and have patience in winning a gold client to establish
credibility in the local market.
The ability to simultaneously address (a) where you want to go and (b) how
are you going to get there in a rapidly changing environment.
16
Recruiting Methods in the US
Our client companies have found US recruiting methods to be primarily network driven. The
various approaches to recruitment these companies engaged in are outlined below. Many of
these are highly cost effective and time efficient methods.
All client companies emphasised the importance of using your entire network of contacts when
recruiting. Many positions were filled by referrals from customer contacts, employees, business
partners, and inexpensive community job board postings on websites such as www.craigslist.org
and www.monster.com. Venture capital investors proved useful in providing suitable candidates.
Recruiting star performers from your competitors was another rewarding recruitment method.
Recruitment agencies, although costly, were also used.
When selecting a prospective executive, many client companies highlighted the importance of
hiring the right person in the first instance. Their experiences also iterated several points to bear
in mind when selecting the executive:
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The executive should be clear about the responsibilities and expectations of
the position and the scope of the role. Senior management should be very
visible and lead strongly.
The importance of communicating to the prospective executive that your
company is committed to, and has a permanent office presence in, the US.
This helped add to the company’s credibility.
Undertake a thorough background check on candidates and follow up
diligently on references.
Employment and Compensation
Legal Employment Practices
Before recruiting new staff in the US, you should be aware of the relevant employment legislation,
paying and filing tax returns for federal and state employment taxes, social security taxes and the
company’s obligation to withhold income tax from employees’ salaries. Although your legal and
accounting advisers will do the detailed work, it is helpful to know the important aspects of these
issues to ensure that things go well from the start. Mistakes made at this point can be time
consuming and expensive to correct at a later stage.
Relevant employment legislation includes:
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Employment-at-Will Doctrine.
Title VII – Civil Rights Act, 1964, as amended in 1991.
The Pregnancy Discrimination Act, 1978.
Family and Medical Leave Act (FMLA), 1993.
The Age Discrimination in Employment Act (ADEA, 1967, as amended in
1978).
Immigration Reform Control Act, 1986.
Fair Labour Standards Act, 1938.
Americans with Disabilities Act (ADA), 1990.
17
Compensation
Salaries for re-locating Irish employees to the US and employing staff locally in the US have
dropped from the highs of the early 2000s when compensation packages were at a peak. Typical
salaries for experienced sales people with industry experience are 1.5 to 2 times those in Ireland.
Generally speaking, salaries vary widely depending on location and required experience. A senior
sales manager can expect to earn a base of US$85K to US$150k (with an aggressive
commission structure). Recently, stock options are not proving as attractive as previously due to
the very low level of IPOs.
When hiring sales staff it is important to be very clear on the issues surrounding the sales
commission that they will earn. Even though the finer details will be written into their contract, it is
worthwhile discussing these issues so that there is no ambiguity involved. This will avoid disputes
and bad feeling later on. The key issues that should be addressed include:
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When commission is earned.
How commission is earned.
What defines the revenue on which the commission is based.
The commission amounts.
Typical components of US employee packages that differ to those in Ireland include:
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Health insurance – levels of service for medical, vision and dental coverage
can be offered at different costs, by different companies in different locations,
and can be an expensive, but necessary, addition to the compensation
package.
Employee Share Option Scheme – this was a popular component when
share prices were rising rapidly. However, during a downturn phase in the
economy they are less popular but should be thought through in advance of
being offered.
401(K) Plan – retirement savings that are funded by pre-tax contributions by
the employee and sometimes partial or matching contributions from the
employer.
Employee Retention
Being pro-active on certain issues can minimise turnover and keep hiring costs low. The following
are a number of practices that can help you retain key employees.
Good Hiring Practices
Make a good hire in the first place. This requires clear job descriptions, careful
screening, an expert interviewing approach, a robust decision-making process,
and diligent reference checks.
Mentoring and Coaching
A good fit will be an employee who also shares the company values. Coaching
employees to develop core leadership competencies will help them acquire the
skills they need to succeed and improve performance.
18
Competitive Compensation
In today’s economic climate, employees are far less attracted to stock options. A
good base salary and comprehensive benefits package is important to attract
and retain top talent.
Managing Change
To adapt to a changing environment, a company and its employees must be
innovative and remain open to change so that they can be constantly looking for
new opportunities.
Career Management
Provide employees with challenging opportunities for on-going learning and
growth that will help develop their careers.
Flexitime and Telecommuting
Provide flexible work hours and the opportunity to work from home to create a
work/life balance for employees.
Cultural Factors
Key Observations on US Business Style and Culture
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Punctuality is paramount. If you are delayed or unable to make a meeting, it
is vital to call ahead and advise.
Business meetings occur in almost any context, so be prepared to talk
business at parties, in bars etc.
You will encounter many multicultural environments so being open to cultural
differences is crucial.
The formalities of meetings such as agendas and non-disclosure agreements
are considered important.
Immediate follow-up is expected and failure to follow through on a
commitment is likely to affect subsequent actions.
If discussions progress well, US companies typically introduce legalities at an
earlier stage than their Irish counterparts.
Pricing is discussed early and in detail, so be prepared to negotiate on
pricing earlier than you might typically expect.
Business attire is formal on the east coast and tends to be smart casual on
the west coast. It is probably better to dress formally until you know your
client.
The business culture in the US is open and innovative, and requires an equally open and
culturally sensitive sales approach. Many US business people have a direct, informal, optimistic,
vocal and sometimes even confrontational style. They are quick to voice opinion. It is advisable to
aim to quickly find the core issues they need addressed and to identify a basis for future
discussion. Typically meetings end with next steps to be taken by all the parties involved.
Your prospective clients will be self-assured with a high level of confidence. Do not be put off by
this or by their many questions. This is typical due diligence on your company, product or service.
Business tends to be formal and structured when you are selling into more established financial
services and manufacturing market sectors, especially on the east coast. The approach to
business in Silicon Valley tends to be more relaxed and informal.
19
The Marketing and Sales Cycle
The intensely competitive business climate currently being experienced and likely to continue for
the foreseeable future means smaller contracts and deeper discounts. Cash strapped top
executives, once removed from the decision-making process, are becoming more involved in the
sales process and are pushing for cost breaks.
Getting a highly respected reference client in the US is an important step to take early in the
process. Using beta testing or free product can be a lure that works in this market. Targets may
come from contacts previously established through US multinationals based in Ireland.
Upon entering the US market, the focus will more than likely be at the beginning of the sales
cycle. It is wise to begin with putting your effort and resources towards developing good
prospects.
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Filling the pipeline – have enough prospects to call.
Following up – call all existing contacts.
Getting meetings – explore prospects’ key needs and offer value added
service.
Closing sales – negotiate, acquire and retain a new client.
Do not expect quick sales. With the economic slowdown sales cycles are now longer. This
means that you must also account for higher cost of sales. It takes time to establish a presence
and it may be a year before you achieve any significant sales, so budget accordingly.
Market study visits, trade shows, speaking at conferences, your professional advisers, venture
capital companies, membership of interest groups, and trade associations are all useful sources
of prospects as well as basic research.
Many Irish companies have found prospecting in the US to be easier than in other markets, as
US business people are generally more receptive to new ideas, products and services. US
companies are prepared to listen in order to make an informed decision as to whether or not a
product or service is of interest to them.
Start prospecting from Ireland before you set up your US office. Talk to as many people as you
can about your US operation and use these conversations to establish new contacts and to get
advice on targeting your chosen market region.
Selling Strategies
The overriding question you face is whether to sell directly, indirectly or by using a mixed sales
strategy. Although it requires more time and money, selling to larger clients and end users can
prove very beneficial. A win can mean a big name client behind you that will help establish your
credibility in the market. It may also provide referrals and make you more attractive to indirect
sellers.
In addition, you may want to address channel partners who typically sell into small to mediumsized companies. Sometimes the best strategy is to use a combination of direct and indirect
channels. When you create a partnership, you must be clear about expectations on both sides.
Indirect Selling
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Distributor – obtains your product and sells/licenses it to dealers or retailers
who in turn deliver and license to end-users.
20
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VAR (Value-Added Reseller) – can add value to your product by customising
it, or by providing consultation.
Application Service Provider (ASP) – ASPs integrate technology into a
solution provided to horizontal or vertical markets. This is a less used
strategy today, after the dot-com implosion. Many companies now license
required technology.
Manufacturer’s Representatives/Sales Agents – agents or small firms that
act as a sales representative for your company, usually within your
geographic region.
OEM (Original Equipment Manufacturers) – incorporate your company’s
product or service into their own products.
When recruiting a distributor or indirect seller, there are several areas that are important to
address, including the following:
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Does your product or service fill a gap in the seller’s portfolio?
Does the seller’s business and customer base relate to and fit your needs?
Is the seller an established player with a sales force?
Who are your competitors working with and with what channels? Can you
offer more to the seller? If so, what?
In the process of recruiting a seller, you will also need to strongly communicate the value of
working with you. This could include highlighting the ability of the seller to offer a more complete
offering to their customers, or to increase their revenue by offering integrated services.
The more complex the product or service, the more important it is to be included in the sales
cycle. A successful partnership is one where there is a team-based approach to selling your
product and you are engaged in all processes with the client. This is an important element to
have written into the agreement with the indirect seller. To the extent of the complexity of your
offer, indirect selling may require the hiring of a partner or channel manager.
Direct Selling
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Hire an experienced sales team to sell directly to target companies without
using channel partners.
This is the most expensive way to target a market segment, but it provides
the greatest return.
Direct selling means that you will provide direct contact with the company –
which may assure the purchaser that they will receive the best price and
service.
Combined Indirect and Direct Selling
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A combination of both direct and indirect selling channels means that you
may use partners in regions where you do not have any local support or in
segments where your contacts are limited.
Approaching the marketplace directly and/or indirectly will be determined by
the nature of your product or service and customer demands.
This combined approach is most suited to high value products and services
where relying on an indirect strategy alone is unwise.
Regardless of the approaches you select, it is imperative that you stay close to business level
when formulating the sales strategy. Bear in mind that your strategies will continually evolve over
time to meet market demands and the changing environment.
21
Some Selling Basics to Keep in Mind
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Know your clients’ specific problems and focus on creating solutions.
Have selling pitches for each level within the organisation.
Know where the client is in the decision-making process, if, for example, they
are evaluating alternatives. Provide them with enough compelling evidence
to help them decide that you are the best choice.
Be mindful about discussing ROI (return on investment) with lower rank
contacts. This is often best discussed with the financial team or senior
executive decision makers.
Expect unanticipated situations, a delay in decision-making, for example, and
provide information and support to reduce the risk for the client.
A Guide to Presentations
The following proven template will help you prepare a presentation for the US market:
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Client Problems
Solutions and Results
Why Our Company?
Short Case Studies
Testimonials
About Us
Working with Us
Client Problems
What are the key problems your clients are experiencing? List the various
problems in some detail in order of priority.
Solutions and Results
How do the products or services you provide address the problems listed? Again,
list them one by one in detail and be specific in your discussion of these
problems. Let them know exactly how your product or service addresses their
issues and how they result in solutions that mean something to them.
Why Our Company?
Your prospective client has many choices in solving their problems. So let them
know why your approach/solution/results/experience makes you the best choice.
Do you guarantee results? Is it your industry specialisation? Let them know your
unique competitive advantage.
Short Case Studies
Think through the many times you have provided similar solutions to past clients.
Let the prospective client know the problem with which your client was faced, the
solution you provided and the results that ensued. These might be successfully
conveyed within a paragraph or two.
22
Testimonials
If you don’t already have testimonial letters from recent clients, then request
them. Extract the best nuggets of information that address the key benefits your
business offers.
About Us
Provide background material on your business. List anything relevant regarding
your ability to provide solutions to your clients – including recent projects –
anything that illustrates you being the qualified organisation for the job.
Working with Us
Finally, let your prospective client know exactly how you work. What is the
process? When you do start work, what do you typically do first? What are the
payment terms?
Generally, the first meeting with a prospect affords you the opportunity to listen to them and
understand their problems and issues. This then enables you to prepare a very targeted
presentation for them.
Effective Networking, Trade Fairs and Conferences
The US is noted for the quality of the networking that is normally undertaken for successful
companies and individuals. Below are some tips for emulating them.
Networking
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Developing a Strategy for Effective Networking
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Find out what industry associations and business groups are in your region.
Learn what groups and events your competitors are attending.
Attend as many and as often as possible in the beginning.
Shortlist the groups that are most suitable and that meet your needs.
Make a consistent effort to attend network events several times a month.
Networking extends beyond face-to-face meetings to sharing materials or sending something to
leads. Some tactics include:
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Invitations – send invites to presentations you give.
Leads – connect them with a potential lead for their company.
Event Calendar – share events that you may be hosting.
News Release – e-mail press releases.
Inside Information – share useful industry information.
Time-Sensitive Information - share information that could help in decisionmaking.
Business in the US is all about networks. Your target industry sector will be made up of a select
group of companies in certain regions, their senior executives and your competitors. Your
success will depend on your ability to penetrate these networks, identify the key players and
convince them of your key value proposition.
23
Once you have made some contacts in the market, it is wise to find the key networking groups
and associations for your business. Find out from these attendees what networking groups they
find effective. Some areas to start with are the local Chamber of Commerce and other industry
forums such as the Silicon Valley acclaimed Churchill Club - www.churchillclub.com, the New
York Software Industries Association (NYSIA – www.nysia.org), and the New York New Media
Association (NYNMA - www.nynma.org), amongst others.
Over 150 Irish technology companies already have offices in the US and have built up a wealth of
knowledge. Many of them are open to sharing their experience and some best practices. Spend
time with some of these companies before your move. Enterprise Ireland is happy to provide you
with introductions to these companies.
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Cultural Differences and Networking
In the US, networking is acceptable and expected. US professionals find it natural to make
contacts whereas assumptions about networking often prohibit Irish business people from making
the most of networking opportunities. Networking is not about using people. In the US, it is a
strategy for developing relationships among those who may have access to leads, either directly
or indirectly, about getting the most current information and advice from those that know best.
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Some Networking Suggestions
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Do some research on what you need to find out.
Be prepared to share information or leads that could potentially help others.
Prepare things to talk about in advance of social and business situations.
Have your elevator pitch well rehearsed.
Put your sales hat on and be ready to present the ROI on your product or
service.
Have a list of questions or topics to discuss that are relevant to your sales
environment.
Cultural differences do influence communication but to be successful at networking, you don't
have to change your personality. The intention is to project a confident, articulate and
professional manner. If you prepare your elevator pitch and you know what’s important to your
company, you should be able to better project confidence and professionalism in your own
comfortable approach.
Trade Fairs and Conferences
Trade fairs and conferences offer a great opportunity to build a base of prospects and build your
brand identity.
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Preparation
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Booking space requires a lead-time of six months to a year.
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Be sure to get the exhibit floor layout and book the best space available that
you can afford.
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Plan before you leave the office and learn about the attendees.
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Set up appointments with clients or prospects.
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Identify seminar speakers and explore how you might co-present or
piggyback on their presentation with, for example, case studies.
24
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Establish goals for:
- The number of prospects you want to secure
- Learning more about your customers
- Competitors you want to learn more about
- What’s new in your space?
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Polish your 30-second elevator pitch, 5-minute lobby speech and 15-minute
latte speech.
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Organise a lead generation system, for example, the infrared beaming
feature allows owners of Palm® handhelds to share business card
information with another Palm handheld user.
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Stay in the hosting hotel and attend the hospitality suite and after-hours
parties.
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Ensure that your exhibit materials are delivered on time and that you have
made local arrangements for construction and dismantling. Be clear about
your specific connectivity requirements.
Trade shows can be a huge investment and choosing the right ones to attend and exhibit at is allimportant. It is advisable to develop a strategy, identify the key shows that hold the most
possibility and interest and allocate a budget for attendance and/or exhibition. The trade press for
your sector will advertise the trade shows and conferences. You can also get advance notice on
shows at www.tsnn.com.
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Working the Show
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Set time aside to meet with customers.
Get to know your customers needs better and their “big picture”.
Assess what your competitors are doing and look for emerging trends in your
segment.
Identify areas of opportunity that are not being served.
Ensure that you have experienced, professional staff to manage the booth
and that they are quickly able to qualify leads.
To get leads and make sales, apply the four rules:
- Establish rapport
- Establish need
- Establish interest
- Establish next action (call, e-mail, appointment etc.).
How to Retain Customers
As always, retaining good customers is more profitable than having to find new ones. Here are
some of the issues relevant to retaining customers in the US market:
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Execute excellently - on time and within budget.
Be willing to measure performance against an outside benchmark or
standard.
Deliver a satisfactory return on investment.
Establish regular communications using various channels – phone, meetings
and e-mails.
Ensure that client expectations are met. If not, find out why and take
corrective actions.
25
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Learn what you could do differently to fulfil and exceed expectations in the
future.
How can you continue to improve your product and/or service and
execution?
Find out if the needs of your client are changing.
Are there new opportunities to explore or changes you need to make?
Delivering value to customers is made up of two aspects : Customer Value – service, product,
personnel, image; and Customer Price – monetary cost, time cost, energy cost.
Focusing on maximising delivery and performance in these key areas will demonstrate your value
to clients.
26
Legal and Financial Issues
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Introduction
Getting Started
Choosing a Legal Entity
Visas and Work Permits
Accountants
Banking in the US
Venture Capital and Financing
Introduction
The legal aspects for setting up your business vary from state to state. All necessary information
is easily accessible online so the process can begin as soon as you decide to expand operations
to the US. With the assistance of your attorney, you will need to choose a business entity and
make the appropriate filings. In addition, an attorney or a visa agent can facilitate the process of
getting visas for your management.
Whether your company uses a firm in the US or your accountant in Ireland, you will need to seek
advice on tax-related issues and other financial policies. Banking in the US can pose a challenge
so some guidelines to overcome these are suggested. Finally, the US venture capital process
and an overview of the current financing situation are presented.
You are strongly advised to seek expert legal advice from a qualified source on the legal and
financial aspects of starting a company in the US. Enterprise Ireland accepts no responsibility for
any errors or omissions.
Getting Started
Work with your legal and financial contacts in Ireland or ask for referrals before you begin. Most
Irish companies moving to the US find this the most convenient and effective way to get started.
Enterprise Ireland representatives in the US can also suggest professional services companies.
However, they cannot vouch for their character or business credentials. Be sure to review and
work with an attorney to meet the applicable and necessary requirements.
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New York City and State
www.tax.state.ny.us/sbc/starting_business.htm
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Greater Boston area and State of Massachusetts
www.mass.gov/portal/index.jsp?pageID=cluster&c=doingbusiness
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Silicon Valley, San Francisco and the State of California
www.ccsfo.com/index.html
To give an example of the legal process involved, the following is a step-by-step guide for the
general regulatory process of setting up a business in the city and county of San Francisco. Other
cities and states will differ so refer specifically to the city in which your operation will be based.
27
A General Checklist for City and County of San Francisco
Local Requirements
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Register – with the Treasurer and Tax Collector to receive a Business Tax
Registration Certificate.
Register – your business name in the City Hall.
Zoning – before finalising your business location, check with the Zoning
Centre to determine that the business is permissible in that area.
Licenses – check whether your type of business requires a city license or
permit.
Permit – secure a building permit when applicable.
California State Requirements
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Seller's Permit – if you intend to sell or lease goods.
Licenses – check if your business requires a state license.
Workers' Compensation Insurance – secure a policy if you employ others.
Taxes – check on state requirements for taxes and insurance regarding
employees.
Federal Requirements
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Contact the IRS for information and instructions.
Choosing a Legal Entity
There are three options for the legal status of your US office:
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US Corporation
Limited Liability Company
Branch Office
US Corporation
A corporation is similar to a limited liability company in Ireland. It is an “artificial entity” which is
owned by the shareholders. To establish a corporation, you must file Articles of Incorporation with
the local Secretary of State and pay an annual franchise tax. Legal fees cost at least $2,000 for a
filing and incorporation. Many Irish companies recommend filing in Delaware because it is the
cheapest state in the US to incorporate from a tax perspective but check with your advisers in
relation to your specific business and your objectives as a company for the future.
Limited Liability Company (LLC)
This entity limits its members’ liability. To form an LLC in the US, one or more persons (not
necessarily members of the LLC) must file Articles of Organisation with the Secretary of State.
There is a nominal fee for filing articles. For tax purposes, an LLC may be treated as a
partnership. However, its Operation Agreement must be carefully framed in order to achieve this.
Branch Office
This approach does not involve the formal creation of a US entity. It entails setting up a sub-office
of your company in the US with close links to the parent company. A “waters’ edge agreement” is
necessary to ensure that only profits earned on sales generated in the US are eligible for tax in
the US. Explore the US corporate codes on this so that you comply with the requirements.
28
Each legal entity has different tax implications. Your accountant will advise you on the short and
long-term tax implications of each entity. Engage the services of an attorney to advise on the
legal entity, to actually set up the entity in the US and to deal with the administration and
processing. Your attorney can also advise you on matters such as employment regulations,
employment contracts, taxation and immigration issues.
Visas and Work Permits
The law relating to aliens working in the US has become even more rigid in recent years. Anyone
employed in the US must be legally entitled to work and live there. You can avoid immigration
procedures by employing a US national or a person with a valid Green Card.
Initially, it may be easier to staff your US office with employees from Ireland. However, be aware
that there are different kinds of visas that depend on the legal status of your organisation, as well
as the persons for whom you are seeking a work permit. You can avail of visa agents in Ireland to
advise and assist you with this. It is prudent to apply for visas as soon as you decide to set up
business in the US.
Types of Visas
Non-Immigrant Visas
There are over 60 types of non-immigrant visas for entry into the US. The B, H, L
and E visa categories are the most common for international business personnel.
A visa agent can provide you with the details of each and which is most suitable
in your case.
Immigrant/Green Card Visas
These are the most easily obtained business-related immigrant/Green Card
options available to managers and executives of companies with US operations,
although processing can be slow and may take up to a year. The long processing
times for Green Card applications mean that it is normally expedient to obtain a
non-immigrant (temporary) visa first.
Visa Waiver Programme
If you have opened your office in the US but have not been incorporated and/or
do not have the relevant visa, you can enter the US under the Visa Waiver
programme. This entitles Irish citizens to stay in the US for a period of up to three
months or 90 days, without the possibility of extension or change of status.
Reference: www.workpermit.com.
Finally, bear in mind that visa and work permit processes and applications
change from time to time. It is advisable to stay abreast of recent developments
on US immigration because these changes may impact your organisation and
personnel.
Reference: www.workpermit.com/us/us.htm.
29
Accountants
Accountants will be able to assist and advise you on:
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Company Entity Matters.
Tax-Related Issues.
Company Financial Processing.
Investments.
Other Financial Issues, such as Transfer Pricing.
Some Irish companies use their accounting firms in Ireland. Others seek these services from
specialist firms in the US. Enterprise Ireland can help you find an accountant or accounting firm.
Recently, the IRS is particularly interested in reviewing accounts of foreign corporations to ensure
that they are declaring all profits. Many non-US companies have been under investigation by the
IRS for incorrect accounting policies in US generated business. A portion of profits generated on
products developed in the US and sold to clients outside the US may be eligible for tax. The IRS
must be advised of this if this arises. In this regard, the establishment of an “arm’s length”
agreement is important.
Banking in the US
One of the biggest obstacles Irish companies confront when starting up in the US is establishing
a bank account. Irish companies have typically faced difficulties because they have no credit
history in the US.
It is good practice to contact each of the larger, well-known banks to find out their specific
requirements so that you have the required paperwork prior to making the application. All of the
major US banks offer online banking, allowing you to access your account from your PC
anywhere in the world.
As the process can be lengthy and cumbersome, be sure to plan well in advance of operations.
To prepare you and give you a guideline for opening an account in the US, the following are
some general requirements:
General Account Opening Requirements
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Notarised copies of official identification, such as a passport and driver’s
license, for each authorised signer.
A letter on your company's letterhead requesting account opening and
specifying authorised signatories.
A letter from your attorney stating there are no legal restrictions preventing
you from opening an account.
Notarised corporate documents in the name of the account being opened
(i.e. usually a copy of the Memorandum and Articles of Association, and a
Certification of Incorporation).
Mailing street address and other contact information in the US.
Completed bank applications.
The minimum deposit.
30
Some Major Banks:

California
Bank of America
Wells Fargo
www.bankofamerica.com
www.wellsfargo.com

Boston
FleetBoston
www.fleet.com

New York
Chase
Citibank
www.chase.com
www.citibank.com
Venture Capital and Financing
The process of acquiring venture capital funding can be broken down into the following six steps:
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Initial Contact.
Presentation.
Due Diligence.
Negotiations.
Closing.
Possible Future Investment.
Once prospective venture capitalists have indicated interest, it is recommended that you begin to
devote considerable time to developing a business plan, if you haven’t already done so. Unless
you are well connected, direct contact with venture capitalists is unlikely to achieve much
success. Find parties such as Enterprise Ireland, US attorneys or bankers who can assist with
introductions to attractive investors.
Your Business Plan
The business plan should cover the following areas:
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Executive Summary.
Company Mission and Business Goals.
Market Needs and Opportunity.
Background on your Product/Service.
Operations Plan.
Management Team and Board of Directors.
Financial Plan.
As well as a business plan, a good verbal presentation by key members of the management team
will be needed. As you may only get one shot at this it is worth spending considerable time
perfecting the presentation and its delivery. US companies take this stage very seriously and
often get advice and coaching from professionals who are used to the requirements of venture
capital companies. A strong focus on the market and its needs is usually better than too much
time spent on the technology. Venture capital firms will check out the technology in detail later.
The management team is viewed as the most important indicator of success of the company,
regardless of how good the company or product is. The companies who succeed in securing
venture capital have an experienced management team with a great track record.
31
Investments by Industry Sector
Different industries and sectors are in favour at different times in the economic cycle. Knowing if
your industry sector is one that is of major or minor interest to venture capital firms will enable you
to fine tune your presentation and business plan effectively. For the most current information, visit
PricewaterhouseCoopers’ Money Tree Survey at www.pwcmoneytree.com.
This site also shows what stages of company development are of greatest interest to venture
capitalists. For example, in the late 1990s start-up companies attracted the greatest share of the
market, while in the early 2000s expansion stage companies became more attractive as the
bubble burst for start-ups.
Interestingly, levels of investment can vary by location with Silicon Valley and the New England
area being favoured during the economic downturn.
32
Operational Issues
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Introduction
Where to Locate and Why
Finding a Suitable Office Space and Location
Adapting to US Standards
Telephone and Internet Access
Office Furniture, Equipment and Stationery
Introduction
Deciding on a geographic location to establish a business presence is a decision that requires
thorough research and it may be a lengthy process. An overview of three attractive and primary
areas to locate is given, to assist with your decision-making. Once the location has been decided
upon, options for finding office space are explored. One option not to be overlooked is the full
service provider. They handle the majority, if not all, of operational issues and can minimise your
set-up time, therefore outweighing the additional expense.
It is common practice for Americans to work remotely. As the Irish are less familiar with this mode
of work, this needs to be taken into account so that effective and cohesive teams are created.
The importance of establishing a central office location is therefore just one aspect of doing
business in the US.
Where to Locate and Why
The most important factor in choosing where to set up operations falls back to that old reliable –
location, location, location. Being close and accessible to your clients is crucial. We focus on
three key regions that have been identified as offering the most opportunity for Irish companies
setting up in the US:
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Silicon Valley.
New York Metropolitan Area.
Boston / New England Area.
An important factor in selecting a location is that you focus on the area with a long-term
perspective. The process of selecting a location can be a big investment. Choosing the right
location in the initial stages can help you avoid the cost of relocation in the future.
Here are some factors that you may want to consider in making your location decision:
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Proximity to Customers.
Location of Competitors.
Suitability of Location for Future Expansion.
Wage Scales in the Locality.
Proximity to Major Airports.
Cost of Real Estate.
Taxes.
33
Why Silicon Valley?
Silicon Valley is a 35 by 10-mile strip of land south of San Francisco in Santa Clara County. For
Irish companies targeting the high technology sectors, Silicon Valley is a strategic market
location, with many leading US technology firms in the area. Some of its attributes include:
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Its emergence as the high-tech epicentre of the world. Silicon Valley is home
to more than 10% of the US’s largest and fastest growing technology
companies, including HP, Xerox, Intel, Oracle, Yahoo, Canon, Cisco, 3 Com,
Netscape, and Silicon Graphics.
Its closeness to technology developments and advancements helps ensure
that your products remain leading edge and innovative.
California’s economy is the world’s fifth largest economy and is based on a
broad spectrum of industries including software, telecommunications,
aerospace, computer hardware, electronics, biotechnology and
pharmaceuticals.
An open and welcoming business culture enables you to expand your client
base and increase exports.
The area is high in innovation, risk and entrepreneurial spirit.
A highly educated workforce is locally available.
Stanford and University of California Berkeley are located in the area.
One of the highest concentrations of venture capital firms in the US can be
found here – the availability of venture capital funding and mentoring has
enabled small companies to grow aggressively.
For up to date information on investments in the region, check out www.pwcmoneytree.com.
Why New England – Greater Boston Area?
Boston is a popular market entry point for Irish companies, with over 60 companies established in
the region. The diversification of industry demonstrates the region’s innovative economy.
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The Boston/New England economy consists of nine key industry clusters –
financial services, post-secondary education, computers and
communications hardware, diversified industrial support, defense (military),
healthcare technology, innovation services, software and communication
services, and textiles and apparel.
The Interstate Route 128 Technology Corridor in Boston has over 700
technology companies who are potential customers, partners and VARs.
The university powerhouses of Harvard and MIT (Massachusetts Institute of
Technology) are located in Boston. These universities, along with the many
other third level institutions in the area, have contributed substantially to the
region’s innovative economy.
55 of the fastest growing US high- tech companies (second after California)
are located in New England.
Multi-dimensional high technology industries, including software and
hardware, telecommunications, instrumentation and biotechnology are
established in Boston.
Over 2,700 companies in Massachusetts produce software and networking
products and services.
The area has the highest per-capita federally funded R&D expenditures
($303) with the next closest being California at $146 per-capita.
The region has the highest concentration of colleges and universities – 68 in
total, including Harvard and MIT, in the US.
According to the National Venture Capital Association (2001), Massachusetts
was ranked number one for venture funding, capturing US $1.35 billion.
34

New England’s location mid-point between Ireland and the western US, with a
reasonable time overlap with Irish headquarters, has made it a favoured location.
For up to date information on investment in the region, check out www.pwcmoneytree.com.
New York Metropolitan Area
New York State is the world’s 10th largest economy and home to 65 Fortune 500 companies – the
highest number in the US.
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New York is a strategic market location for companies targeting the financial,
publishing and information and media industries.
It is the financial capital of the world. The NYSE is the largest stock market in
the world, the NASDAQ is second, and both are headquartered in New York.
Together they hold a market share of almost US $13 trillion (as of Sept
2002), accounting for about half the total value of stocks worldwide.
New York is a national leader in technology with almost 400,000 employed in
high-tech companies.
New York has a diverse economy with concentrations of employment in
many industries, including financial services, information and media services,
fashion, apparel and textiles, optics and imaging, information technology
hardware and software, bio-sciences, industrial machinery and systems,
transportation equipment and distribution services.
It is the largest city in the US with a population of over 8 million.
It is one of the three “world cities” (along with London and Tokyo) that control
world finance.
Nearby Connecticut has a high-tech corridor.
Connecticut can offer cost-savings because it is a major suburban area and
has thousands of commuters that commute to New York.
With direct access and an overlapping workday with Ireland, New York
provides an excellent base for Irish companies entering the US market.
For up to date information on investment in the region, check out: www.pwcmoneytree.com
Finding a Suitable Office Space and Location
The location you choose may not only need to meet your business needs, but also take into
account your personal needs. For instance, frequent travel may be required back and forth to
Ireland and the US east coast may be a more convenient location from which to travel.
Office space options include:
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Enterprise Ireland incubator space.
An executive office space provider.
Leasing your own office.
Virtual office.
Here are some other issues to keep in mind while finding your space:


What functions does the space need to provide? Some companies just want
a US address, or a meeting place for clients, while some require more - a
central office for sales, service and engineering operations.
Do you need an interim space that is capable of serving both your present
and projected needs?
35

Talk to Enterprise Ireland about their business incubators, which provide not
only office space, but can also offer supportive services.
Enterprise Ireland Incubator Space
Enterprise Ireland provides serviced offices (Incubator Offices) for client companies to lease on a
short-term basis, while the company is establishing a market presence. The advantages of
leasing an incubator space include:
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


Proximity to Enterprise Ireland’s offices where valuable hands-on support
and advice is available to help you deal with the practical issues in setting up
your new US office.
A low cost way for you to secure office space as competitive rents have been
negotiated for the unit and can be passed on to you.
The flexibility of working short term from the centre (minimum of 6 months)
while looking for a larger space.
The networking benefit of working amongst other Irish companies in a similar
situation. This is particularly relevant to staff that have been relocated from
Ireland and have few social and business contacts.
Enterprise Ireland can offer additional cost-effective support services to companies availing of an
incubator space, such as lead generation, promotion and advice relating to taxation, legal or
regulatory issues.
Incubator Offices are available in three US offices – in New York (6 offices), Silicon Valley (3
offices) and Boston (4 offices).
The above points are also supported by an Enterprise Ireland client testimonial:
“Going into the incubator unit allowed us to quickly establish ourselves in the US market, without
having to deal with all the red tape. It also gave us a number of different location options and
minimal upfront set-up costs.”
Willy Connor, AEP Systems
Executive Office Space
Executive centres or business incubators offer complete turnkey working environments, with a full
range of professional services, which offer the advantage of an easy start-up process in the US.
They are designed specifically to help start-up firms. These centres, such as Regus, offer
administrative support, telephone answering service, installed phone lines, conference rooms,
office equipment (photocopiers, fax) and sometimes video-conferencing and visitor parking. They
can provide flexible leases and meet your changing space requirements. Using an executive
office space can be expensive. However, this expense can be offset by the convenience factor of
having these services in place when you move in.
36
Leasing a Space
To lease space for your business, here are some steps to help you get a favourable lease
agreement:
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
Give yourself plenty of time to conduct thorough research for prospective
spaces and avail of leasing agents to get rates and terms.
Understand exactly what the lease document says and ensure that it
includes a bail-out clause so that you have a safety net.
Negotiate on price but be sure to reach a mutually acceptable deal for both
parties. The longer negotiations take, the more potential there is for things to
go wrong.
Be clear on what rent does and does not include, such as utilities or
insurance.
Find out if security and maintenance facilities are included.
Speak with other tenants to get their perspective and feedback on the space.
Make certain the person signing the lease is authorised to commit to the term
of the lease.
Know your space and parking needs.
Virtual Office
In the early stages of your move to the US, you may decide to use a virtual office, whereby a
service marketing company provides a telephone number and postal address. The phone is
answered on your company’s behalf and messages passed through to voicemail. This creates the
impression that your organisation has an office. Virtual offices only work as a short-term solution,
as regular contacts will learn about the set-up of your operation and may question your long-term
commitment to the market.
Adapting to US Standards
Acting like a US company and appreciating the local business culture is important to integrating
into the business environment. This involves many different facets, but two practical areas are
your web address and developing US business cards.
Establishing a Dot-com Address
US companies do not identify with a “.ie” website or e-mail address. Establish a .com website and
e-mail address as soon as you decide to set up operations. Having a US dot-com address
confirms your presence and commitment to the US market. When creating your address, it is best
to use one short word and avoid using hyphens. For example, instead of www.johndoe-inc.com,
use www.johndoeinc.com.
US Business Cards
Titles and positions in US organisations are different from those in Ireland. Titles in the US are
typified by the use of President, Chief Executive Officer (CEO), Chief Technology Officer (CTO),
Vice President (VP) and Senior Director.
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The following chart details equivalent US and Irish titles.
US Titles
President/Chief Executive Officer (CEO)
Chief Information Officer (CIO)
Chief Technology Officer (CTO)
Chief Operations Officer (COO)
Chief Marketing Officer (CMO)
Vice President Sales
Director of Sales
Equivalent Irish Titles
Managing Director
Senior VP of Information
Senior VP of Technology
Senior VP of Operations
Senior VP of Marketing
Director of Sales
Manager of Sales
Note that a director in the US is more junior to a director in Ireland. The comparative position to a
director in Ireland is a VP in the US.
When printing your US business cards, ensure that you use a title and position with which your
US counterparts can identify. Note that US cards are generally smaller in size – the standard
being 3.5 x 2 inches.
Telephone and Internet Access
The office complex may have phone lines, phones and telephone numbers already set up upon
your arrival. Check in advance with the management how installations are controlled. Sometimes,
the management service provides the right to carry out all the line installations for local and longdistance calls – meaning your bill comes from the office administration, not directly from the
telephone company. Check around the different carriers for the best rates and services for long
distance calls.
Without personal or company credit history in the US, you may find it difficult to obtain a mobile
phone. It is possible to get a mobile phone by presenting a letter from your company
guaranteeing payment of bills. Some agents to contact include Sprint, Verizon, T Mobile and
Cingular. If you do fail to get a mobile phone in the US, a more expensive option is to get a trimode/band phone from Ireland, on which you can do international calling.
Office Furniture, Equipment and Stationery
Before making investments in furniture and equipment in particular, check out the comparison
shopping sites on the web where you can compare prices and selections. Among these are
www.mysimon.com and www.dealtime.com.
Furniture
Office furniture can be bought or leased, depending on your budget and future plans. You can
lease furniture from many companies listed in the Yellow Pages. Given the cost of leasing, it is
advisable to invest in furniture right away. Sources include Office Max, Office Depot, Staples and
Costco and warehouse auctions for second hand office furniture.
38
Equipment
Some of the best value equipment can be found at CompUSA and Costco. Ensure that you have
a service contract so that if something goes wrong you can have a replacement while your
equipment is being fixed.
Stationery
The largest and most price competitive shops where you can purchase office stationery include
Staples, Office Max or Office Depot. Ordering can be done online with purchases delivered
directly to your premises.
39
Enterprise Ireland’s Services in the US
The range of Enterprise Ireland services has steadily broadened to reflect client demand and
market dynamics. It includes:
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Lead generation work on behalf of Enterprise Ireland clients.
Assistance with establishing offices in the market.
Researching the individual niche market segment requirements of clients in
the US market.
Assistance in identifying partners and forming strategic alliances.
Providing a paid-for US marketing consultancy service.
Advice in preparing forward marketing plans.
Regular one-to-one review meetings with the company’s US marketing team.
Preparation of US export capability/opportunity audits.
Proactively identifying scope for assisting companies to strengthen their US
market potential.
In-depth support for US-based market personnel of client companies.
Undertaking paid specialist marketing assignments in conjunction with
outside consultants.
Provision of serviced offices (Incubator Offices) for client companies.
Lead generation has become one of the key activities for Enterprise Ireland, with clients
contributing to the cost of the work undertaken.
This customised support structure is augmented, where appropriate, by initiatives for groups of
companies. These initiatives can be sector or geographically based. They include trade shows,
market missions, buyer conventions, market studies and other programmes that provide
opportunities to:
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
Market and sell products.
Meet buyers.
Research market opportunities.
Establish a foothold in new sectors.
Sell into new market area.
Sell more into established sectors.
Enterprise Ireland has incubation facilities attached to its offices in New York, Boston and Silicon
Valley. Within these centres are private, furnished offices with telephone and high-speed data
services. The advantages of taking an office within these trade and technology centres include:
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

Reasonable rent and good facilities, such as conference room space
Enterprise Ireland representatives close by to assist with the establishment of
the office and advise on marketing strategies, new business development
and accessing networks.
Central locations.
Shared experiences, assistance and support from other Irish businesses
opening an office.
40
Bibliography
About.com, Economics
Bizsites.com
C.J. Hayden; “Get Clients Now!”
CCH Business Owners Toolkit
Daft; “Organization Theory and Design”
DeLuca, M. J.: “How to Get a Job in 90 Days or Less”, 1995
Drake Beam Morin; “Boosting Employee Retention Rates,” 2002
Enterprise Ireland, “Marketing in the U$A, A Guide to Irish Technology Companies”, 2000
PricewaterhouseCoopers, www.pwcmoneytree.com
Philip Kotler; “Marketing Management”
Robert Middleton; “Action Plan Marketing”
Sfgov.org, “Getting a Business Started”
Shona L. Brown and Kathleen Eisenbardt; “Competing on the Edge: Strategy as Structured
Chaos”
SiliconValley.com, Oct 13, 2002
41
“Explore where investment is being made in the US. Understand the growth
areas and trends in your space. With a strong competitive analysis, map out the
players. Consider Gartner and Yankee Group analyst reports”
Gerard Sheridan, Openet Telecom
“It takes a senior level executive to make (expansion into the US) work and
(ideally) is a founder or director with a vested stake in the company”
David English, Technology Sales Leads
From opening page to Section 1, Background and Overview
“Focus on your target market and nail down your pitch. It’s important to have (a senior level
management) person who is charismatic and can communicate the technical differentiators (of
your product or service). He / she also needs to be able to pitch analysts and give an interesting
perspective on their industry space and market technology, showing they have good domain
knowledge and are a credible player.”
Gerard Sheridan, Openet Telecom.
“The quality of service on the first client project helps generate repeat business. Effective
customer retention also includes regular calls, e-mails and on-site meetings.”
Hitesh Taylor, Emergesmart
From bottom of page 16 in Section 2, Marketing Planning and Strategies / Web Marketing, at
the end of Get listed in Leading Search Engines paragraph
“Actively look for and identify early adopters (in an opportunity area). Focus on quality not
quantity and the company’s unique selling proposition (to communicate how you differ from the
competition and why they should buy from you)."
Hitesh Taylor, Emergesmart.
“Recruiting from outside your space is not advisable. (It’s important that the sales team) has
direct experience.”
Gerard Sheridan, Openet Telecom.
From bottom of page 27, Section 3, The Sales Team / How to Retain Customers
“Apply for visas as soon as you decide to set up business in the US. Use agents in Ireland that
specialise in processing visa applications.”
Willie Connor, AEP Systems
“Set up bank accounts with American banks. Shop around and be prepared (that it will take time)
to build up a credit history. Have all your corporate legal forms ready to present to them.”
42
Willie Connor, AEP Systems
From bottom of page 33, Legal and Financial Issues / Venture Capital and Funding
“Full service office providers (are a great way to set up operations). They provide all the facilities,
furniture and resources (you need to get started) and have lease flexibility.”
Gerard Sheridan, Openet Telecom
“Keep your sale team close to the business by setting up a centralised office. This facilitates
learning and makes sure that the team is not too far removed from the business.”
Hitesh Taylor, Emergesmart
Taken from bottom of page 40, Operational Issues / Office Furniture, Equipment and
Stationery.
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