The Wrong Advice for Starting a Business in America

An article containing over 20 years of ExportUSA's experience in opening businesses in America

ExportUSA New York, Corp. Followers Linkedin 6,763

With a quick online search, you'll find that today there are numerous sites explaining how to start a business in the United States. Unfortunately, in most cases, the articles are written by people who know little to nothing about the American market or who have never put into practice the advice they provide. We have decided to analyze one of these articles. It's titled "Starting a Business in the USA: 10 Things You Must Know." We will measure the inaccuracy and danger of each suggestion, providing readers with reliable and verified counter-resources from our website www.exportusa.us.
 

1) Without a green card or visa, starting a business is an alternative. After a year, apply for the L1 visa

Inaccuracy: 10
Danger: 10

This information is gravely incorrect. The L1 visa must be applied for before moving and with specific requirements. The claim about the visa after a year is unfounded.

Here you will find everything you need to know about the L1 visa
 

2) Choose the "right" state. Delaware and Nevada are easier for bureaucracy

Inaccuracy: 8
Danger: 3

Opening a company in Nevada is very complex. Delaware is suitable only in specific cases; in other contexts, it can create more problems than benefits.
 

3) Appropriate legal structure: choose between LLC or corporation, based on employees and tax availability

Inaccuracy: 2
Danger: 1

The number of employees does not affect the choice of structure. "Tax availability" is an ambiguous expression.
 

4) Register the legal name. The name corresponds to the owner. You will get a tax ID (EIN)

Inaccuracy: 10
Danger: 8

The company name is distinct from that of the owner! The EIN, however, must be requested from the IRS with a specific procedure. Watch the video or read our in-depth guide
 

5) Choose the business name. Verify its availability with the municipality, the Thomas Register, or the patent office

Inaccuracy: 10
Danger: 5

The name verification is only conducted with the Department of State. Municipalities do not have lists of companies. The choice of name precedes the legal registration.
 

6) Obtain permits. Various permits might be needed. Inquire with the Small Business Administration. Obtain insurance

Inaccuracy: 5
Danger: 2

Specific permits are only needed in certain cases. The most common insurances are General Liability, Workers' Compensation, and Product Liability.
 

7) Additional licenses: necessary for regulated activities (alcohol, tobacco, etc.)

Inaccuracy: 0
Danger: 0

Wine can only be imported by importers with an import license, who can only sell to licensed distributors, who in turn can only sell to retailers, restaurants, or licensed public establishments. 

Everything you need to know about the wine import license in the USA
 

8) Assess costs. Consider initial losses and at least 6-12 months for the first earnings

Inaccuracy: 0
Danger: 0

We believe this is how the idea of entering the American market should be approached: as a project that requires a certain number of years to complete, a certain amount of financial and human resources to implement, and that will eventually begin to generate returns.
 

9) Request funding. Turn to institutions or the Small Business Administration: the federal government does not offer grants.

Inaccuracy: 5
Danger: 10

The Small Business Administration does not grant loans to newly formed companies with foreign owners.
 

10) Acquire a business. Consider purchasing an existing business or franchising. Beware of losses in franchising

Inaccuracy: 2
Danger: 10

Acquiring a pre-existing company carries very high financial and legal risks. We advise against it for those who are new to the USA