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  Why do you need to carefully plan your spending when starting operations in the U.S.?

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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