May 25, 2020  
 
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Buying a Business in the USA

 

Is Buying An American Company Right for You?

Maybe you have a successful company in Europe or a growing business in Asia. But does it make sense to buy an American company to gain a foothold in the U.S. market? Maybe -- but here are some of the things to consider before you start shopping for U.S. companies.

For many international entrepreneurs, the idea of owning a U.S. business is attractive and appealing.
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But the fact that you have succeeded in Europe or Asia doesn't automatically mean that you will succeed in the U.S. The question you really have to ask is whether it makes sense for your business to buy an American company.

In some cases, it clearly makes sense for a foreign entrepreneur to buy an American company. But other times, the decision isn't nearly so obvious. If you're on the fence about whether buying an American company is the right move for you and your company, here are a few questions to consider.

Why do you want to buy an American company?

There are good reasons and not so good reasons for wanting to buy an American company. Market expansion, access to technology, and similar benefits can make buying a U.S. business a smart decision. However, buying a U.S. business because you are infatuated with the American economy or American culture is the first step on the road to business ruin.

Are you prepared to do business in the U.S.?

Buying a U.S. business might seem like a good idea now, but eventually you are going to have to operate it as an ongoing business concern. Before you move too quickly, conduct an honest assessment of your readiness to compete with American companies on their home turf. If you lack the infrastructure, connections, and experience to be successful, you should either recruit people who are experienced in American business or delay your acquisition until you can get up to speed.

Do you have the buying power you think you do?

Even a slight fluctuation in the currency market can make a big difference in the effective purchase price of an American business. Although you know how much purchasing capital you have today, do you have enough of a bumper to compensate for currency fluctuations between now and the actual purchase?

Have you considered post-acquisition details?

Before you go ahead with your decision to buy an American business, think about post-acquisition details related to how your company functions and how it is perceived by American consumers. Make sure you and your team have carefully considered the short- and long-term ramifications of an acquisition long before you close the deal.

Related Articles

Want to learn more about this topic? If so, you will enjoy these articles:

Hiring U.S. M&A Firms
Advice for Foreign Buyers Purchasing U.S. Businesses


Conversation Board

Are you considering buying a U.S. company? What are your biggest concerns? We welcome your comments, questions and tips regarding when it makes sense to buy an American company.


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