ACTIVE RESEARCH: CULTURAL BRIDGES FOR BUSINESS – EUROPEAN COMPANIES EXPANDING TO THE U.S. – SUCCESS IN THE US
Before we dive deep into this, let’s get clear on what is meant about having an entrepreneurial spirit. Let’s agree that having an entrepreneurial spirit means someone determined to achieve a goal choosing a pathway of uncertainty, someone focused on following their dreams or simply, someone choosing a life of fulfillment over a life of comfort. That’s the kind of spirit that stands a chance of success in the US.
Why do entrepreneurial spirits have a better chance of succeeding in the US? Because the urge to connect with other people, create business opportunities and make money is immense in this portion of the world.
There are hundreds of business clubs and hundreds of public networking events to attend every week, there are business gatherings of all kinds, to a point that you may attend multiple ones in the same evening. In all these events, people are accustomed to introducing themselves to total strangers, initiate a conversation and look for ways to help each other business-wise. Entrepreneurship has always been valued, empowered and supported in the US, allowing the birth of the Google’s, the Apple’s and the Facebook’s of this world, continuing to make of this country the place on earth with the most opportunities and doorways for success.
Let’s get one important thing clear, though… building business relationships IS EASY in the US, closing a deal IS NOT – you can find further discussions and real stories on this topic in my two previous articles in this series, “THERE IS NO RED CARPET WAITING FOR YOU IN THE U.S.” and “WHEN REALITY CHALLENGES YOUR PLANS” and you will understand that coming to the US expecting to become a millionaire overnight is setting yourself up for failure. It will take time, hard work and ability to adjust.
Let’s get one important thing clear,
though… building business relationships IS EASY in the US,
closing a deal IS NOT”
Key finding – Although entrepreneurial spirits have a better chance of succeeding in the US, in my extensive research interviewing European businesses already well established in the US market, I identified 6 important recommendations to any European business wanting to expand to the US:
1. Have clear what you want to achieve in the US market,
2. Do your homework – Research and learn about your options and make educated decisions,
3. Make sure you have enough financial means until you can start making money,
4. Find local contacts in the US that can support you,
5. Pay attention to what the market is asking and be humble to respond exactly to that,
6. Keep an open mind to learn and adjust your plans as needed.
Frank Fabregas & Montse Gella, a Spanish couple from Barcelona and franchise owners in the US since 2015, for a Huntington – Learning Center in East Cobb, Atlanta.
I interviewed Frank and Montse, a couple with extensive expertise and experience in the education and training industries in Europe. Although originally from Spain, they met 25 years ago in New York, during a summer program at Columbia University. Since they got together, the US has been their dream country, making them nurture the idea of establishing there. Frank has a teaching background and 20 years of experience as a business strategy consultant for IBM Spain and CEO for one of the biggest online training companies in Spain and in Europe; Montse with a master’s in computer science, spent the last 10 years of her life as a passionate teacher in one of the best International Schools in Spain. The time came for their dream to come true and in July 2015 they moved to the US to live and build a business, change their lifestyle, do meaningful work and give their children an opportunity to grow and study in the US.
Frank & Montse where very clear on what they wanted by moving to the US:
A business of their own – buy an existing profitable company with a promising future that they could grow in time. They’re search for a business was focused on positive EBITDA (earnings before interest, taxes, depreciations and amortizations), something preferably in their field of knowledge, that could be profitable and allow them to live in the US with no financial problems and preferably in a warm and sunny place. From Spain they started their search of a business, found the 10 best candidates online and signed a confidential agreement with the selected ones to receive their reports. The next step was to come to the US, visit the candidates and interview them to gather more information to support their final decision. They decided for the Huntington Learning Center in East Cobb, Marietta, in the great Atlanta area – a private B2C (business to consumer) tutoring franchise that met all the criteria, representing for them a business to grow, and a starting point in the US.
Do purposeful and meaningful work – like Frank says – “The B2B (business to business) is a very cold environment, something that I lived all my life… so a B2C (business to customer) would be more suitable for the purposeful and meaningful work we wanted to do in help other people”. The Huntington Learning Center seemed to be the perfect match for their goals, allowing them to help the children in their study skills, improve their grades and bring joy and peace of mind to the parents. With Frank’s business and strategy consulting background, his strong understanding of the full supply chain spectrum, combined with Montse’s strong operational and organizational skills, enough money to invest, a clear purpose and strong willpower, they knew they could buy an existing business and improve it – they were confident, knowing they had everything they needed to succeed in the US.
Frank & Montse’s challenges to success in the U.S.
Unexpected personal challenges:
Obtaining a Visa to operate in the US – It was a long and expensive process to get all documentation, registrations and records in order and translated to buy a business in the US. They had the support of an attorney in Florida for their Investor Visa process, while making some attempts to contact the Chamber of Commerce in Miami for support, although with no significant results. Miami was at the time, a possible destination for them and the fact that the people in charge of the Chamber were Spanish speakers was a valuable attribute. Frank and Montse soon realized that their investment of $200.000 was not appealing to the Chamber and kept moving forward, the best they could on their own. With all the paperwork and important decisions to make, they hardly had time to try different contacts. Once they found the Huntington business in East Cobb, they didn’t pursuit further efforts to contact local entities or chambers or even try to make personal contacts and ask for help.
Getting a Bank account and leasing a house – When trying to open a bank account for the business in the US, Frank and Montse had no alternative but to look for a local Spanish Bank’s branch. The fact they had no personal or business credit history in the US, made it impossible for any US bank to open them an account.
Our greatest success in the US has been to make a sell, to
actually be able to close a deal in this country.
They said I couldn’t do it, but I have proven
otherwise”.
Similar problem was felt by them when trying to lease a house to live. Again, the fact they had no credit score or credit history in the US, no one would accept their lease contract. The solution came from the realtor in charge of finding them a house to rent… Frank says, “if it wasn’t for Maribel (a local real estate agent, originally from Venezuela) that paid 2 upfront months of our rent from her own personal account to support our legal contractual process… I don’t know how we would have done it”.
Montse recalls “Everything was so difficult for us, the paperwork, the bank accounts, finding a way to rent a house, even to buy a car you have to have a US driver’s license, wish we didn’t have at the time… we were expecting a modern system, but nothing was easy. Because of liability issues, the US system still relays on fax, checks and all the things we, back in Europe, don’t use anymore” and she continues, “In Europe, we think that the US is Hollywood, but it is not, and it can be very challenging in many ways, for a foreigner wanting to establish here”.
Unexpected business challenges:
Managing their Huntington Learning Center in East Cobb – Frank realized that when he speaks in a foreign language he may sound rude, he uses less vocabulary and may seem too direct and straight forward to the people. “Managing our US employees has been challenging. Not only the language barriers have been an issue for us, but the realization that when facing a mistake, people focus on looking for the fault instead of looking for the solution, has been a big surprise”.
Not having the “required” skills set to sell in the US – “Everyone at the Huntington’s Master Franchise in New York kept telling me I needed to hire a sales team because I wouldn’t be able to make the sell, to close the deal… my English was too poor, and my strong Spanish accent would make it impossible for the parents to understand me or be willing to give me their time trying to understand my service and what I could do for their kids”. At the time this seemed an important obstacle in Frank & Montse’s business plan, they were not prepared for this additional financial commitment.
Frank & Montse’s solution for their US business:
“Our greatest success in the US – says Frank – has been to make a sell, to actually be able to close a deal in this country. They said I couldn’t do it, but I have proven otherwise”.
The Huntington Center in East Cobb ranked number #1 in revenue for the month of January 2018 with more than 55 thousand dollars in sales, showing up as #1 on the TOP 5 rank for enrollment – indeed, Frank Fabregas finished the year of 2017 as the #1 Huntington Learning Center in the whole US for enrollment rate performance.
Frank’s realization is that there is only one reason for his success in the US: the genuine care they have at the East Cobb Center for the children and the parents. Likes Frank says… “we are truly committed to the children in helping them with techniques for a sustainable learning process and that has been recognized by the parents. Every day, we do everything in our power with the children to express that commitment”.
Frank and Montse are already expanding beyond the basic selling, they are partnering with the local schools and finding ways to involve the parents in their kid’s success. Everyone wins, the children, the schools and Huntington.
Frank has been selling more and more programs because of the authenticity of his purpose. Their expertise and experience in the tutoring and training field combined with their strong sense of commitment, has allowed to build trust with their clients and strengthen their brand.
In future articles I will be talking about a series of cultural misconceptions that, once realized, will better allow success to happen.
Cristina da Costa is a Personal & Professional Leadership Developer and Coach based in Atlanta, USA, with expertise in measuring culture in organizations for multinational teams’ productivity and engagement.
