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Why
do you need to carefully plan your spending when starting operations
in the U.S.?
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Large numbers of recent bankruptcies in the Internet market
have proven that the "think big from day one" model of doing
business is not always the best way to succeed. At IT-Startup,
we strongly suggest that you set reasonable targets, and plan
to spend money accordingly. Our analysis is based on three
main points:
1- You are never sure that your product line or existing sales
process will be appropriate for the U.S. market, until you
run up against competition. You may need to make some changes
that require engineering, or other adjustments, which will
postpone your first sales.
2- Brand recognition takes time. You will not be able to start
an efficient mass marketing campaign without at least 3 to
5 strong testimonials from satisfied customers, that you can
use as references when needed. Getting testimonials takes
time.
3- Recruiting a team in the U.S. is a tough and a long process.
After hiring employees, you will need time to train them before
they are able to sell your product. You have to plan for at
least 4 to 6 months without revenue.
If the software / service you would like to sell on the U.S.
market is in an average price range of $10K to $20K, targeting
a $200K revenue for the first year is reasonable.
Expecting to spend half a million dollars is also a sound
goal.
Each company and product line is different. We cannot make
a general rule from a few successful examples alone. We can
strongly recommend, however, that you define a target based
on quality of references, instead of revenue, and that you
avoid spending mass marketing dollars before being sure that
the whole sales process is fine-tuned.
This is the best way to succeed in the U.S. market.
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Questions? |
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