Starting a business in the USA

1

• Starting a business in the USA
• NAF Breakfast

2
Introduction

• Marcel Birkhoff 38yr, married and a daughter
• Business/Marketing technical background,MBA
  Marketing management
• 13 years with Hyva on international business
  development pioneering new markets
• Moved in 2005 to USA Since 2005 managing
  director of Hyva Corporation

3
Contents

• Company History activities
• Our move to the USA
• Main prerequisites
• Main obstacles
• Cultural differences!
• Long term lt-gt short term
• Surprises
• Main tax implications
• Main Lessons conclusions
• Questions

4
The Hyva Group

• From a tiny spot on the map in 1979

5
to a world leading company in 2008
Hyva moves your world!
6
Companies everywhere in the world
7
In 29 years Hyva reached

• Export to more than 130 countries
• 28 fully owned subsidiaries
• 2000 employees
• Sales of 135.000 telescopic cylinders (2007)
• Sales of 15.000 tipper bodies per year (India)
• Sales of 2.500 Hyvalift systems (2007)
• Turnover of 475 mio in 2007
• Expected turnover of 600 mio in 2008

8
Hyva is producer of

• Hydraulic telescopic cylinders
• Hydraulic truck kits
• Hyva Lift container (un)loading systems
• Hyva Floor horizontal (un)loading floors
• Truck mounted cranes

9
Hyva on USA dumptrailer
10
Hyva Hydraulics

• hydraulic kits
• super structures
• all necessary components

11
Major drivers of our business

• GDP development of countries
• Infrastructural investments projects
• Mining heavy off road tipping applications
• Environmental developments
• Developments of labour costs
• Sales numbers of trucks trailers

12
Our move to the USA

• Started from Chicago apartment in beginning 2005
• Company founded in end of 2005
• Corporation as legal entity, registered in
  Delaware
• Main office in Chicago, with various satellite
  warehouses
• Usd. 6 mio Estimated sales - 2008
• Market-scope is US and Canada
• Currently serious market decline in USA
• Constant growth increasing market share
• Hyva has far more modern efficient product

13
Prerequisites to enter NA

• Safeguard yourself against currency fluctuations
  risks
• Investigate product liability risk
• Structure the company in such a way that parent
  company can not be touched
• Have patience and full stakeholder support
• Local presence fast product availability
• Product offering must have an competitive edge

14
Main obstacles

• Geographic size regionalism
• Difference in technology market standards
• Different customer expectations
• Not Made in USA
• Liability issues
• Different laws regulations on company and
  employees
• Reluctance to deal with foreign companies
• Dont fall for the transatlantic trap!

15
Transatlantic vicious cycle
16
Cultural differences

• There is a bigger culture difference than most
  people think
• US customer is polite, and does not say no
• Dutch people can be perceived as too direct and
  pushy
• Intercultural training definitely helps!

17
Short termlt-gt Long term

• US is short term focused, NL long term
• This emerges in different areas
• Economy has higher highs lower lows
• Quality technical sophistication is less
  important
• Lower price is more important then lower cost
• Shorter timeframe on ROIs
• More importance on short term shareholder value
• The dollar is paramount!

18
Surprises

• US customers generally perceive European products
  as superior nice!
• Banking system old fashioned and inefficient in
  Dutch view majority payments with checks
• Certain industries very low tech, others very
  high tech
• Lower environmental awareness concerns
• More bureaucracy than you expect
• VISA application process not so easy anymore
• Canadian market presence eases introduction in US

19
Tax issues

• Consider international transfer pricing rules
• Consider federal tax and state tax
• Sales in different states paying tax in
  different states
• You need good local advise and global tax
  strategy

20
Lessons conclusions

• Do not underestimate geographic size
• Setting up takes 3x longer and cost 3x more as in
  business plan!
• Good preparation on all fronts is key
• Cover your self against currency/liability risks
• Focus on long term and be patient
• Sustained local presence is key in breaking the
  transatlantic vicious cycle
• If you succeed the rewards are great!

21

• Thank you for your attention!
• Any questions?