Gautam co-founded Josh Software in 2007 with an aim to bring industrial disruptions for their customers. Through Josh, his mission is to develop in-depth sustainable and scalable solutions for companies across sectors. He is an entrepreneur who not only drives the growth of his organization but lives his passion for coding till date! A strong believer & promoter of Open Source, he constantly encourages its adoption within his organization. He is an active contributor within the Open Source community. With his dedication and efforts, he has been able to build this expertise and culture within Josh.
The idea of setting up a new business can be daunting, but is equally exciting at the same time. We are living in the age of the fourth industrial revolution, one driven by exciting new changes in technology, entrepreneurship and disruption, and as industries take on this new decade, novel opportunities are opening up.
The position of the United States as the world’s superpowers still lies true. And for good reason. It stands at the forefront of development and growth in the western world and is a place that is first and foremost, driven by the power of thought and ideas. Ever since the late 1970s, entrepreneurship has been at the centre of the USA economy. Sure, the 2008 crisis saw some decline in these propositions, but today’s numbers say more about the place as a place of business than words ever can! This is what makes it a fantastic place to set up new businesses.
In the last 18 months alone, the U.S. has experienced a sudden resurgence of new businesses, reignited by the realities of the pandemic and subsequent economic crisis. Despite the rapid spread of the Omicron variant, the U.S. economy ended 2021 in strong shape. Holiday spending rose by 8.5 per cent compared with last year, according to a recent survey. The Federal Reserve Bank of Atlanta estimates G.D.P. growth of 7.6 per cent in the final quarter of the year, up from 2.3 per cent in the third quarter, when the Delta variant held back spending. The Conference Board, a business research group, reckons that over the whole of 2021 G.D.P. rose by 5.6 per cent, which would be the highest rate since 1984.
This is testament to the fact that opportunities can rise in the face of adversities, and if well managed, lead to great success as well. There are some industries that have definitely fared better in the last two years, since the ongoing pandemic. International airlines, media and streaming, hospitality and travel seem to be at the top of the list as the masses embrace this new normal, one day at a time. They all have one thing in common: the pivotal role that tech has played in stabilizing uncertainties. Most progressions state that coupled with automation, process flow systems and digitally enabled services, 2022 is sure to be the year where industries move out of the slump created in 2020.
Setting up a new business, thus, can be equally challenging and exciting at the same time. This is true for USA residents as well as non residents. Here are a few steps that can ensure a smooth, seamless process for you:
Market research: This may seem like the most basic thing to do, but the lack of proper market research is the biggest reason for businesses to flounder. The first step is to identify whether setting up an office in the USA will lead to added business benefits. This decision can be attributed to a clear understanding of how much business you want to generate against how much you may be already generating in the US. If the financial projections are more profitable, only then consider building a physical presence in the States. One also needs to be certain about the potential time investment that can lead to desirable business results. This worked in our favor, as we had identified specific growth opportunities before setting up base in America.
Having a local Director: When setting up shop in the USA, it is highly recommended to have a local Director who has an SSN. This is critical not just for the formation of the company but also post formation for smooth bank account set-up & operations. Additionally, the person should also have a reliable credit history for easy application of credit card. Last but not the least, if the local Director is not just a namesake in company formation formalities but is also trustworthy enough to run operations with you full time, that’s icing on the cake.
Forming the entity: Once decided about setting up, one of the most critical business decisions to take is to understand whether you want the US entity to be a 100% wholly owned subsidiary of your existing set-up or vice-versa. This drives virtually all business decisions going ahead. During this process, we were sure about setting up an Indian entity expanding to the USA and not the other way round.
Finding the right region: Different states also have different state and federal laws, so pick the one that suits your market best. Be very sure of the business terms as well – the locations you will run it in, the taxes that you are accountable for and the operational details at every step. Tight scrutiny should be maintained always. Hiring an expert CPA and CS will be critical to ensure smooth business functioning within the state as well as cross regions.
Licensing and permits: In terms of legal structures and settings, licensing and permits go hand in hand with setting up the business structure, naming it and making it an official identity. Ensure all your terms in your arrangement are very clear – the regions that you will be operating in along with the origin. These things are extremely critical especially for taxation and statutory laws in the US, to avoid any legal hassles.
Local vs outsourced hiring: This can be confusing, and even overwhelming, but it does not have to be difficult. The local USA markets are diverse and even in terms of states, very different from one another. While certain operational hurdles can be mitigated through outsourcing, it is always a good idea to have a local salesperson on board – someone who knows the lay of the land and are a part of the ecosystem, who can help close outbound leads while keeping the local context in mind, especially if sales is the major focus. This goes a long way in ensuring long term scalability.
Keep focus at all times; do not let it dwindle. It will be important to realize how much and which domains to foray into, especially for traditional businesses who have borne the most brunt of deflating economies. Lastly, it is also important to have a sound understanding of payroll, the state taxes, federal taxes, company formation, transfer pricing laws (moving money from US entity to India entity). These are crucial for sustainable functioning of your business adhering to the key requirements of the chosen region.
Having an in house or external tech team who understands specific business objectives and challenges can work wonders. Technology solutions are as much about the talent that drives them as much as the technicalities themselves. Pick the right partners who make this approach easier, and it will definitely bring a positive disruption to the business’s top and bottom line alike!