{"id":14355,"date":"2015-09-28T13:38:36","date_gmt":"2015-09-28T17:38:36","guid":{"rendered":"http:\/\/www.enxmag.com\/twii\/?p=14355"},"modified":"2015-09-28T13:38:36","modified_gmt":"2015-09-28T17:38:36","slug":"the-challenges-of-selling-to-buyers-outside-the-usa","status":"publish","type":"post","link":"https:\/\/www.enxmag.com\/twii\/exit-strategy\/2015\/09\/the-challenges-of-selling-to-buyers-outside-the-usa\/","title":{"rendered":"The Challenges of Selling to Buyers Outside the USA"},"content":{"rendered":"<p><img loading=\"lazy\" class=\"alignleft size-full wp-image-10738\" src=\"http:\/\/www.enxmag.com\/twii\/wp-content\/uploads\/2014\/12\/exit-strategy-1.jpg\" alt=\"exit strategy 1\" width=\"278\" height=\"126\" \/>As mentioned in last month\u2019s article, we have seen an increase in interest for our seller clients wanting to sell to buyers based outside the USA. We reviewed the characteristics and types of companies foreign buyers would like to acquire in the USA. In this month\u2019s article, we discuss <em>The Challenges of Selling to Buyers Outside the USA<\/em>.<\/p>\n<p>Over the past several years, we at CFA have been very active closing numerous cross-border deals; including assisting Warren Buffett and Berkshire Hathaway complete their first transaction in Europe. \u201cClosing a deal with a buyer or seller in your own country is difficult enough,\u201d said Armand-Louis Weisheimer, Chairman of the International Corporate Finance Group (of which CFA is a founding member), \u201cbut getting a deal done with a buyer or seller from a foreign country who speaks a different language and lives seven time zones away is even more challenging.\u201d<\/p>\n<p>What are the biggest challenges of selling your business to a buyer outside of the USA? The following, non-inclusive list of challenges is based upon our experience working with buyers and sellers on cross-border transactions:<\/p>\n<ul>\n<li><strong>Cultural Differences:<\/strong> Just because it \u201cplays in Peoria\u201d does not mean it \u201cplays in Paris or Prague.\u201d The way we conduct business in the USA is much different than other countries. Many people outside the USA think Americans work too many hours and talk about business too much. A typical business lunch with Europeans involves little discussion of business and usually includes a bottle of wine\u2026or two. Even table manners are quite different\u2014at a lunch meeting with buyers from Europe, our seller clients in the USA were amused as they watched the Europeans eating pizza and tacos with knife &amp; fork.<\/li>\n<li><strong>Negotiating Styles:<\/strong> When it comes to negotiations, Americans tend to say, \u201cLet\u2019s split the difference,\u201d in order to quickly resolve differences. However, negotiations with parties outside the USA do not always move swiftly or easily. When we work on cross-border deals, the party outside the USA has never once said to us, \u201cWe will agree to split the difference.\u201d As one buyer in Germany told me, \u201cYou Americans forget your country is very young and moves very fast. We in Europe have been doing this longer and are much more patient.\u201d When working with a buyer outside the USA, you must be prepared to be very, very patient.<\/li>\n<li><strong>Language Differences:<\/strong> We Americans are spoiled. English has become the language of the business world. We assume everyone around the table speaks English. While many\/most business people outside the USA speak English, they do not always understand <em>American English<\/em> nor are they conversant with most American colloquialisms. In a recent negotiation with our European buyer-client and an American seller, the seller\u2019s attorney said of our offer, \u201cThat dog don\u2019t hunt!\u201d You can only imagine baffled stares on our clients\u2019 faces as they asked me to translate. Never assume those around you completely understand what you are saying when English is not their first language. Even simply financial terms are different outside North America\u2014what we call \u201csales\u201d or \u201crevenues\u201d the rest of the world calls \u201cturnover.\u201d<\/li>\n<li><strong>Human Resources:<\/strong> Buyers from outside the USA are pleasantly surprised by our employment laws and practices; there is no such thing as \u201cat will employment\u201d in Europe. At the same time, foreign buyers are terrified of our \u201clitigation-happy\u201d society and blanch at our maze of regulatory requirements regarding employment. Buyers outside the US can not believe how little vacation time is offered to American employees; 4 weeks annual vacation time plus 15 federal holidays per year is the approximate standard in countries outside the USA.<\/li>\n<li><strong>Accounting Differences:<\/strong> Buyers from outside the USA, especially those in Europe, are dumbstruck by the level of personal expenses many US business owners charge to their businesses. \u201cCharging personal expenses, even if business related, to your company is simply not done in Europe,\u201d said Weisheimer. \u201cAuditors in the various countries search for these things. For example, in France, we are not allowed to turn in expenses for business meetings held on a Sunday because we are prohibited by law from conducting business on Sunday.\u201d Furthermore, buyers outside the USA are often confused by the complexity of federal, state, county, and municipal tax laws, as well as the challenge of dealing with multiple states each with their own, often conflicting, tax regulations. As one buyer from India said to us, \u201cWe never realized the USA was made up of 50 different \u2018countries\u2019 each with their own taxing authority and regulations.\u201d<\/li>\n<\/ul>\n<p>The challenges to getting a cross-border deal are myriad and include more than this list. However, despite the strength of the US dollar vis-\u00e0-vis other currencies, with the globalization of business, the overall strength\/stability of the US economy, and the size of the US market, buyers from outside the USA continue to look to make acquisitions in America. If you are considering a sale to a foreign buyer, remember to mind your manners and be cognizant of the customs of others from different cultures.<\/p>\n<p>I am happy to answer any of your questions regarding this subject or any previous articles. In my next article, I\u2019ll discuss the subject: Is Now the Time to Sell?<\/p>\n","protected":false},"excerpt":{"rendered":"<p>As mentioned in last month\u2019s article, we have seen an increase in interest for our seller clients wanting to sell to buyers based outside the USA. We reviewed the characteristics and types of companies foreign buyers would like to acquire in the USA. In this month\u2019s article, we discuss The Challenges of Selling to Buyers Outside the USA. Over the past several years, we at CFA have been very active closing numerous cross-border deals; including assisting Warren Buffett and Berkshire Hathaway complete their first transaction in Europe. \u201cClosing a deal with a buyer or seller in your own country is difficult enough,\u201d said Armand-Louis Weisheimer, Chairman of the International Corporate Finance Group (of which CFA is a founding member), \u201cbut getting a deal done with a buyer or seller from a foreign country who speaks a different language and lives seven time zones away is even more challenging.\u201d What are the biggest challenges of selling your business to a buyer outside of the USA? The following, non-inclusive list of challenges is based upon our experience working with buyers and sellers on cross-border transactions: Cultural Differences: Just because it \u201cplays in Peoria\u201d does not mean it \u201cplays in Paris or Prague.\u201d The way we conduct business in the USA is much different than other countries. Many people outside the USA think Americans work too many hours and talk about business too much. A typical business lunch with Europeans involves little discussion of business and usually includes a bottle of wine\u2026or two. Even table manners are quite different\u2014at a lunch meeting with buyers from Europe, our seller clients in the USA were amused as they watched the Europeans eating pizza and tacos with knife &amp; fork. Negotiating Styles: When it comes to negotiations, Americans tend to say, \u201cLet\u2019s split the difference,\u201d in order to quickly resolve differences. However, negotiations with parties outside the USA do not always move swiftly or easily. When we work on cross-border deals, the party outside the USA has never once said to us, \u201cWe will agree to split the difference.\u201d As one buyer in Germany told me, \u201cYou Americans forget your country is very young and moves very fast. We in Europe have been doing this longer and are much more patient.\u201d When working with a buyer outside the USA, you must be prepared to be very, very patient. Language Differences: We Americans are spoiled. English has become the language of the business world. We assume everyone around the table speaks English. While many\/most business people outside the USA speak English, they do not always understand American English nor are they conversant with most American colloquialisms. In a recent negotiation with our European buyer-client and an American seller, the seller\u2019s attorney said of our offer, \u201cThat dog don\u2019t hunt!\u201d You can only imagine baffled stares on our clients\u2019 faces as they asked me to translate. Never assume those around you completely understand what you are saying when English is not their first language. Even simply financial terms are different outside North America\u2014what we call \u201csales\u201d or \u201crevenues\u201d the rest of the world calls \u201cturnover.\u201d Human Resources: Buyers from outside the USA are pleasantly surprised by our employment laws and practices; there is no such thing as \u201cat will employment\u201d in Europe. At the same time, foreign buyers are terrified of our \u201clitigation-happy\u201d society and blanch at our maze of regulatory requirements regarding employment. Buyers outside the US can not believe how little vacation time is offered to American employees; 4 weeks annual vacation time plus 15 federal holidays per year is the approximate standard in countries outside the USA. Accounting Differences: Buyers from outside the USA, especially those in Europe, are dumbstruck by the level of personal expenses many US business owners charge to their businesses. \u201cCharging personal expenses, even if business related, to your company is simply not done in Europe,\u201d said Weisheimer. \u201cAuditors in the various countries search for these things. For example, in France, we are not allowed to turn in expenses for business meetings held on a Sunday because we are prohibited by law from conducting business on Sunday.\u201d Furthermore, buyers outside the USA are often confused by the complexity of federal, state, county, and municipal tax laws, as well as the challenge of dealing with multiple states each with their own, often conflicting, tax regulations. As one buyer from India said to us, \u201cWe never realized the USA was made up of 50 different \u2018countries\u2019 each with their own taxing authority and regulations.\u201d The challenges to getting a cross-border deal are myriad and include more than this list. However, despite the strength of the US dollar vis-\u00e0-vis other currencies, with the globalization of business, the overall strength\/stability of the US economy, and the size of the US market, buyers from outside the USA continue to look to make acquisitions in America. If you are considering a sale to a foreign buyer, remember to mind your manners and be cognizant of the customs of others from different cultures. I am happy to answer any of your questions regarding this subject or any previous articles. In my next article, I\u2019ll discuss the subject: Is Now the Time to Sell?<\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1645],"tags":[2105,1978],"_links":{"self":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/14355"}],"collection":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=14355"}],"version-history":[{"count":1,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/14355\/revisions"}],"predecessor-version":[{"id":14356,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/14355\/revisions\/14356"}],"wp:attachment":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=14355"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=14355"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=14355"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}