Immigration Attorney Sophie Alcorn and International Business Advisor Patricia Bottero St-Jean discuss the E2 visa.
For a comprehensive review of the E2 visa, please see article published in our blog below: The Adventure Within an Adventure
Immigration Attorney Sophie Alcorn and International Business Advisor Patricia Bottero St-Jean discuss the E2 visa.
For a comprehensive review of the E2 visa, please see article published in our blog below: The Adventure Within an Adventure
Only half US small business startups survive beyond five years. Many fail due to the owners’ inadequate skills or insufficient capital. And while other owners might have the necessary abilities and funds to succeed, they mistakenly choose or are sold a business that is not in alignment with their strengths and their life’s objectives. This discussion seeks to shed light on what existential questions aspiring small business owners should ask to best position themselves for success, and before they spend significant time, money and energy in starting any business, should it be an independent startup, a turn-key concept, or the acquisition of one that is for sale.
Of the 543,000 new US businesses that open every months, about half are still in business after five years according to the Bureau of Labor Statistics (Entrepreneurship and the US Economy.) To be clear, not all of these businesses failed. Many were consultants who closed their practice to rejoin corporate employment. Still many sources point to inadequate funding and poor cash flow as the main causes of business failures. Others link the flops to the owners’ flaws, misguided decisions, and egos in the way of getting help. Yet, among the half that still exist after the five years, many of their owners beat these dismal statistics and enjoy a great livelihood in spite of their initial limited business background and capital. Conversely, many who fail are business educated and well-funded, which begs the question: beyond owner’s adequate skills and capital, what else might enhance the longevity of new small businesses?
Disconsolate owners commonly lament that they had no idea how hard running a business would be, and that the requirements of their enterprise made their lives miserable. Yet these same “hard to run businesses” are proved to be successful for other entrepreneurs. Misaligned expectations often show that these owners picked the wrong business for who they are and what they want. A case in point, in the franchising industry franchisors who have identified the ideal persona of a successful owner in their system request that franchise candidates take a behavior assessment test to help ascertain that the candidates’ strengths fit the requirements of their business concept. For independent business startups or for acquisitions there is no vetting process to ensure that a new owner is the right fit for the business and vice versa. This discussion seeks to shed light on what existential questions aspiring small business owners should consider to best position themselves for success when making the major decision of starting a business, should it be an independent business, a turn-key concept, or the acquisition of one that is for sale.
I cringe when an aspiring entrepreneur only describes the economic and social merits of a business they want to start. Silently, I wonder: “How does he know this is the right one for him? Does she understand all her other options some of which might be better?” The majority of aspiring small business owners focus on vetting the business: its product or service, its trend, its market, its business plan, and even how the business socially looks on them as if it were a fashion statement. Likewise, business schools teach methods of due diligence, projections of return on investment (ROI) and how to pitch an idea to venture capitalists. Yet, as part of the American dream, the small business world is not just about making money for investors. Beyond producing an income, business ownership is also a vehicle to creating a good life for its owners and family. A greater way to increase your odds of success in business ownership is to take two steps back. First, identify your strengths and weaknesses, and second understand your life’s objectives. Only then should you research viable businesses that are in alignment with both. If you are considering starting a small business of any kind, you might notice that while your index finger points at one business idea or another, there are three fingers pointing right back at you. Thus let’s begin with you.
1 – Who are you?
Self-awareness is difficult for most of us. Buried in your résumé is a gold mine of enlightening clues: the roles you had, what you learned, what you liked and what you disliked about each experience. Think of what tasks you do well while others struggle. What indicators do you have in your teamwork or do you work best solo? How likely are you to influence others with or without an official badge of authority? Beyond your life experience, recognize your personality and typical behavior. Psychometric tests such as DISC, Myers Briggs and others can point to the right business for you based on your personality and behavior traits. How you communicate and how you process information might point you to a sales-oriented business. How you handle changes might direct you towards a project-oriented business. A common example of a poor fit is that of an entrepreneur who doesn’t like to socialize, yet starts a home-based consulting practice that requires her to find customers through business development activities. Lured by low startup costs and overheads, some choose a venture requiring them to overcome weaknesses instead of one that leverages their strengths. Eventually they realize “they had no idea how hard running this business would be” and of its requirements. When it comes to choosing the right business for who you are, the best approach is to focus on your strengths and hire or outsource the rest.
2 – What makes you tick?
Do you gravitate towards owning a business because you like learning new skills? Business can do that. Do you enjoy the game of competing? Business can do that. Do you like freedom? Business can do that. Do you like developing others? Business can do that. Are you fed up with glass ceilings and excuses for a pay that is incommensurate to your amazing performance? Your business will pay you what you deserve. Think of the owner’s job description for the businesses you are considering. However, to each of the pros there is a contra that you might need to embrace. Consider the following psychological demands of ownership of the particular business you are considering:
|The PROS you might like||Come with these CONS|
|Learning new skills.||Making mistakes.|
|Game of competing.||Wasting time and money.|
|Freedom of decision.||Making difficult or unpopular decisions.|
|Developing and managing others.||They may leave for your competition or become your competition.|
|Being in charge of one’s destiny and income.||Must be comfortable with ambiguity and uncertainty.|
Certainly, any of the above traits can be developed. Another advantage of business ownership is personal growth, and as your business grows so will you as long as you are willing to step outside your comfort zone.
3 – What is the right format for you?
Consider the pros and cons of several format in business ownership: a startup, an acquisition, a franchise or a franchise resale. Each has a long list of unique features and benefits matched by an opposite that you need to prioritize. Aspiring entrepreneurs who soberly and thoroughly examined the pros and cons of each business format, before jumping in, gain tremendous education and avoid strategic errors in identifying the best business for them.
In a startup you have complete creative freedom to develop your idea, each decisions is yours but the venture entails greater risks since it is unproven and it may take years of expenses and opportunity costs before you figure out the right formula, the right market and the right systems. As with investing in the stock market, at 20-30 years old you have plenty of years to recover from the ebbs and flows of the economy and from your mistakes as business owner. Although riskier but potentially more creativity and equity rewarding, a startup might still be a good fit for you at any age depending on your comfort with risks and your business ownership experience. Your vision for your brilliant idea could be to scale it and become a franchisor someday since most franchised businesses began as independent businesses that grew and scaled.
If you are new to business ownership, or you feel uncertain in your current abilities to operate a business you might consider beginning your business ownership career with a new franchise concept and, in exchange of franchise fee and royalties, leverage the systems, training, and support provided by the franchisor. To many entrepreneurs franchise ownership offers the comfort of a proven concept and the opportunity to develop business skills, often in an industry that is new to them. New graduates who do not have a technical or business degree to land a well-paid corporate job might appreciate how a franchise can provide a foundational education to a lifetime career in business. Graduate school applicants might even compare the ROI in a franchise business versus an MBA or other graduate degree. It is also true that many successful independent business owners had first been franchisees who sold their successful franchise unit to eventually launch their innovative startups after they cut their business teeth through franchising.
Or, if immediate cash flow is your top priority, you could acquire an existing business that is already profitable. Here you will have an opportunity to examine its historical performance and make your own projections. However you will have less creative freedom in the short term and less potential to build additional equity from your initial investment. Initial cost of your investment will typically be greater since it will account for the equity accrued by the seller if the business is positive cash flow. If for example you are nearing retirement or are at any age but prefer a plug-and-play concept, you might consider the acquisition of a profitable independent business or the resale of a developed franchise location. At the lower end of the risk taking spectrum, a franchise resale can provide you both existing cash-flow, proven concept and location, all with the support of a franchisor.
Again, none of these business platforms are intrinsically more guaranteed to succeed than any other. What makes each ideal depends on how aligned they are with you, your strengths, your objectives and your life vision.
4 – Do you want to own a business or be owned by one?
Solely aligning your affinities for cars, clothes, beauty, food, or cool apps with your business choice is unwise. Perhaps you are excellent at fixing cars, selling clothes, providing beauty services, making food or developing apps. However, running a business consists of spending most of your time on strategizing, systemizing, networking and growing it. Being the key producer is precarious. If you bootstrap your business and need to both run it and provide its services and products, growth will be slower. Consider the opportunity cost of time spent doing everything especially if there are overheads such as rent and other fixed costs. Ultimately your vision should be to wean your enterprise from you as a producer, otherwise you just bought yourself an expensive job. Eventually you will resent the exhaustion of doing it all and will be unlikely to build any equity since revenues will mostly depend on your individual contribution. You also run the risk of driving yourself and your business to the ground. Another key element to consider before choosing a business is the equity you want to build and your exit strategy, a rare thought in the mind of most first time owners. Are you seeking to cash in your hard work in some years and sell it for multiples of its net income? If so, you will need to ensure you are not the main individual contributor but a team leader making the conscious decision of growing an optimized business machine.
5- What life do you want?
There are no reasons to approach business ownership like a corporate job that dictates much of its employees’ lives. Yet, most first time owners are so programmed to making their life fit their job that they continue to live that way even when in business for themselves. Two of the key reasons to own a small business are the freedom and flexibility that it can offer if you choose the right concept for you. I have met entrepreneurs who did not first consider the activity cycles of their business and became increasingly dispirited when they discovered what they had signed up for. A business to consumer type (B2C) typically is busy when its customers are not working, which means you the owner are working evenings and weekends. Your family life might suffer when you open a pizza joint that stays open until 10:00PM. What about Holidays? I owned a spa for many years and all Holidays including Mother’s Day were the busiest times which intruded with my new priorities once I became a mother and before I could hire a manager. Examine the ideal schedule of your days, weeks, and months and contrast it with the activities of the business you are considering. Conversely, if you are passionate about golfing, skiing, or surfing or you have other day time responsibilities, a B2C might be perfect, but a business to business (B2B) might not be as the bulk of your activities will be during typical business hours. Equally, if your goal is to only work a few hours per week so that you can focus on your other priorities or to keep your corporate career while owning a business, you might research businesses that can be operated part-time or even absentee. Part-time ownership (15-20 hours weekly) becomes a possibility when you hire a full time manager. Absentee models that require 5 hours per week of your time or less are usually simpler models with fewer moving parts and such as laundry services, vending businesses or some retail shops. Ultimately, if a business fits your life according to whom and to what is important to you, your journey to success will be rewarding and sustainable in the long run.
Many aspiring main street entrepreneurs are so dazzled by the prospect of striking it on their own that they focus most of their research and planning on how to make the business work instead of first identifying a business that will work best for them. These entrepreneurs fall into, and often fail in a business, because they focus on finding the “hot” idea, concept or trend, or are sold one. Soon they discover that their business dream is a nightmare. Yet, when choosing the right venture for you, small business ownership can be an exhilarating career that gives you the freedom to craft a life of your design. For greater success and happiness, be self-aware of your strengths and limitations, and have clarity on the life you want. Then objectively align yourself with a business that can do all that.
“Entrepreneurship and the U.S. Economy.” U.S. Bureau of Labor Statistics, U.S. Bureau of Labor Statistics, 28 Apr. 2016, http://www.bls.gov/bdm/entrepreneurship/entrepreneurship.htm.
The 4th of July is my favorite Holiday. It colors my love for this country. Not just because when I was 24 years old, I spent the night of a 4th of July sleeping uncomfortably on a row of seats at a New York City airport awaiting my delayed connection to San Francisco. I didn’t mind because this time I was flying to America to start a business and build a new life. The 4th of July is my favorite Holiday also because independence is my favorite word.
Independence Day is a remembrance of our founding fathers who had the courage, the grit and the vision to build something bigger than themselves at great risks for their lives: a fight for freedom and for the independence of this wild, undeveloped and promising land. It also brings visions of the multitudes from the world-over, of the “huddled masses yearning to breath free” who over the past centuries took dire risks in leaving their native lands and in pursuit of the sort of happiness that demands a new start from less than nothing.
Where else in the world can we find a population of mixed and matched humans from every countries, who have been since the dawn of this nation and still are today mesmerized by the giant legends constructing it? What leaps of faith have these fearless men and women taken! I bow to their humbling greatness. Did they seek comfort and the certainty of an easier life? Certainly not. Their paths were risky but they were free, and they were willing to be uncomfortable for a better tomorrow. A question: “Are you still free today?” You, us, the children of our forefathers who by choice or by chance have been given the gift of this great nation and the God given right to call it home? Is your life one that you have actually chosen, one that you have created by design? Or are you just going with the ebbs and flows of whatever forces push you to where you are now?
In the spirit of independence allow me to share the other reason I love this word. Independence is the modus vivendi of the aspiring entrepreneurs that I serve today and who all dream of owning a business in the USA. My amazing luck is to have found my calling in a career where I get to admire and respect my clients every single everyday! How fortunate I am to share a small leg of their journey. These entrepreneurs may be currently working for a company, and on someone else’s dream, but they yearn to start a business, and to claim their freedom and flexibility to either stay in or quit their current employment. They might be a parent who paused a career for family and is now ready for a new chapter. Or they are moms or dads who have put family first with a business that is just the vehicle to let them decide who merits priority of their time. They may be foreign nationals willing to risks losing what is familiar for the faith of a better life in the United States of America. They may be veterans who know too well the meaning of sacrifice and courage and are returning to civilian life in disciplined fearlessness and who become the warriors of their entrepreneurial careers. These same entrepreneurs may be the bright eyes, and the bright minds of young and inspired new graduates who are bent on making a mark on this world. These entrepreneurs might also be you, whose flame to seek self-sufficiency and create a life of your own design burns deep while you are on the edge of making the jump.
Whatever your backgrounds, you are men and women who share a spirit of independence who seek to cross frontiers and push boundaries toward the unknown. It is no accident that America and Entrepreneurship are two of the same: Independence is their elixir of life. Independence is American.
Happy Independence Day and God Bless America!
Patricia Bottero St-Jean
Foreign entrepreneurs who seek to build a new life in the United States all have this trait in common: a thirst for the ultimate adventure of all adventures, a dream to build a new business in a new world. Theirs is a burning desire to not only cross a nation’s borders, but also to push one’s personal boundaries with business ownership as vehicle to building a new life in a new country. And what better country to build an enterprise than the seductive United States of America? Forever pragmatic in its commerce and industry the USA has entered in a reciprocity treaty with 80 other countries permitting entrepreneurial investors to reside and create a business in America. The vehicle to this exchange is called the non-immigrant E2 Treaty Investor Visa which is vetted by consular officers either in the United States or at an embassy in the investor’s country of origin. The E2 visa is an often overlooked way to reside and work in the US but has recently become increasingly attractive as a result of the current administration’s anti-immigration policies.
Foreign nationals who bring foreign investment capital to the US while creating jobs for US workers through an enterprise can be granted the right to reside in the US with their spouse and children. The spouse of an E2 visa holder is not required to work in the business and is allowed to apply for a work permit and seek work with other companies. This article gives an overview of the E2 visa requirements and recommends strategies to succeed both in visa approval and in business. We discuss the monetary and non-monetary requirements to be granted an E2 investor visa in the US. In disclosure, I am not an attorney and this article doesn’t provide any legal advice. I strongly recommend you hire an immigration attorney to navigate the visa application process with the United States Citizenship & Immigration Services (USCIS), and to increase your chances of visa approval.
To be a foreign national from a treaty country:
The E-2 Treaty Investor visa allows foreign nationals from 80 countries that have a friendly treaty of commerce and navigation with the United States, and who are able to make a financial investment to reside in the US while they successfully operate their business. These 80 countries include Japan, Germany, France, The United Kingdom, Canada, Mexico, South Korea, Spain, Italy and Argentina, which received most E2 visas in recent years. The most notable exclusion are Brazil, China (except for Taiwan), Israel and Russia. Appendix A is a comprehensive list of treaty countries in alphabetical order.
To have money to invest:
As its name indicates it requires an investment; one that ensures that your business will be able to generate the financial means to support yourself, your spouse and your unmarried children under the age of 21, while creating jobs for several US workers. In short, entrepreneurs from treaty countries seeking the E2 visa need to bring foreign capital to start a business here, and in exchange of creating jobs, they are granted the right to live and work in the US, renewable every few years for the life of their business. Although there is no minimum investment required, it needs to be sufficient for the business to generate enough revenues. Some claim that an investment as low as $10,000 is possible under certain circumstances. Realistically, consular officials realize that any business that aims to be profitable in the United States will most likely require a significantly larger investment. A credible investment would be around $100,000 to $150,000 and have greater chance to be approved for an E2 visa.
For larger investments, the E2 visa recipient is able to be a partial investor but must in all cases be in a controlling position of the business and actively operate it. The applicant needs to invest personal funds in the company:
Beyond the USCIS requirements, keep in mind that the cost of living in the US varies greatly by state, thus it generally will cost more to invest and live in New York City or in most cities in California than many other regions. As you create your business plan, be sure to have a realistic perspective of the cost of living in your chosen region so that your financial projections reflect reality as closely as possible and you have enough working capital set aside to meet your needs during the ramp up stage of your venture.
The investment needs to be a commercial risk:
The investment must be irrevocably assigned to a real operating commercial venture with risk of loosing all or a significant portion of the investment. A paper or speculative investment or passive real estate investment, or merely money sitting idle in a bank will not qualify. A Canadian client had his first visa application rejected because his investment was not “at risk.” On his second attempt, we found him a turn-key concept, a franchise, that was easily understood by the consular officer and met the requirements of the USCIS.
The investment must come from a legitimate source:
The investor must explain and demonstrate with documentation translated in English that the source of the funds is from a legitimate non-criminal source and was obtain through lawful means either savings, inheritance, a gift, a bank loan, or a promissory note in the country of origin. If a personal loan or a gift, the consular office will also require documentation proving the legitimacy of the funds from the lender or gifter.
The business needs to be viable and non-marginal:
The business must have an impact on the US economy and create jobs. To demonstrate the viability of the business the investor will be required to produce a 5 year business plan showing how the business will make money, operate, grow and contribute to the American Economy. The E2 visa could be used to start a business from the ground up, or to purchase an existing business or a franchise resale, or to invest in a new franchise. Depending on your experience in business, and command of the English language, each will present its own set of challenges and advantages. Some business models will also be easier to operate than others. Appendix B, gives you a visual representation of key factors and costs to consider when choosing between starting an independent business, the acquisition of an independent business, the startup of a new franchise unit, and the acquisition of a franchise resale. To illustrate our point we use a simple example that could generally be applied to a brick and mortar location of about 1,000 square feet of either a boutique, retail, small salon or coffee shop, all of which represent business to consumer (B2C) types of models. Naturally, the startup costs will differ for technological businesses, and business to business types (B2C) and home based businesses.
Start-up of a new business:
When starting a business from an idea the challenge is to create a detailed and viable business plan with 5 year projections demonstrating that the business will be able to support not only the investor and his/her family but also to create new jobs and contribute to the American economy. Writing a business plan is necessary both to help you solidify your idea and to ensure that the consular officer has a clear view of your venture. The more difficult it is for the officers of the USCIS to comprehend the viability of your business idea, the greater risks of your visa application to be turned down. If you find the task daunting, as many entrepreneurs do, you might consider hiring a professional business advisor to produce a well-written, and concise plan. This will increase your odds of success both in visa approval and in the longevity of your business. For the most entrepreneurial and less risk adverse individuals, a startup can be a thrilling path to the American dream. Launching a business from the ground up has great benefits such as the ability to create and decide absolutely everything in your business and exactly as you envision it while selecting your preferred location. If creative freedom is a non-negotiable priority to you, then a startup is good choice. However if it is always risky endeavor for anyone to ramp up any business (startup, franchise or acquisition) to a profitable and sustainable level, launching an unproven new business can be even more formidable endeavor. When first moving to a new nation with a new culture and often a new language it will take time for the entrepreneur to understand the country’s infrastructure, its rules, its regulations, its customs, and to build supportive social networks. Depending on the business experience and English fluency of the E2 visa applicant, and how many resources and time they have reserved for ramp-up, this learning curve can fatefully delay the breakeven point and profitability of the enterprise. There are two other alternatives that in many cases can be less precarious for first time expatriates: purchasing an existing business (acquisition), or investing in a new franchise unit.
Purchase an existing business:
Finding a business that is for sale is relatively easy. Finding one that is for sale and profitable is much more difficult. Again the new owner will be tasked with demonstrating how they plan to expand and grow the business, and the chosen business will hopefully have well-built systems, a stable staff and resources that are already set up in addition to an existing clientele. In a best case scenario the business is cash flow positive and the previous owner will be willing to spend time training the new owner. However an existing business will also have its own set of challenges. For instance the location and the market, especially if it is a brick and mortar business, is already determined. In this case the odds of identifying a business that is not only profitable (unless you are willing to turn one around) and in a location that you desire will require a certain amount of luck, patience and persistence. Other matters to consider, are the risks of legacy issues. Once you become owner of this business, you assume responsibility for its entire history, positive or negative. So if, for example, a lawsuit that is silently brewing, suddenly reveals itself after your purchase, then you the new owner will be responsible. Of course steps should always be taken to minimize the impact of any lawsuit, such as a liability insurance and setting up the appropriate business entity. Another example of a legacy issue could be that a major customer has been increasingly dissatisfied with the product or service and decides to now buy from the competition, thus unexpectedly diminishing your revenues. In some cases, key employees might resent the new ownership and decides to suddenly quit. A client of mine spent almost $750,000 in a business and found that the previous owner insidiously sabotaged her credibility to the staff members and made the ownership transition very stressful. Still, an existing business that is set up and profitable can be an attractive choice to a foreign investor especially if the previous owner is willing to spend enough time transitioning and supporting with the new owner. Another option to consider is to acquire an already established franchise unit (resale) which gives you the advantages of a new franchise model but of an already established and cash-flow positive location/unit. See appendix B for an illustration of cost comparison between new franchise and franchise resale.
Invest in a new franchise:
For many E2 visa candidates, a franchised business can be a safer choice. The first advantage is that the franchise will likely be a brand that the consular officers will recognize. They will know without even reviewing the business plan, although they will review it, that the business model is succeeding somewhere in the country and in some cases throughout the world. A franchise is a turn-key concept that has a systems, a brand and that licenses its methodology. Someone, usually an independent business owner, has already made all the mistakes, spent significant money, energy and often years to figure out what works and what doesn’t. Once they have demonstrated that their independent business model is sustainable, duplicable and scalable, they chose franchising as a method of expansion.
Above and beyond the cost of equipment, furniture, and leasehold improvements that you will need in any business regardless of whether you choose an independent business or a franchise, in a franchise you also pay for the franchise fee and on-going royalties (see appendix B.) The cost of the one time franchise fee will vary but typically ranges between $20,000 and $50,000 and gives you access to the systems, the know-how, and established resources. The monthly royalties vary too, typically between 6% to 12% of gross revenues, but in exchange you receive on-going support and training, research and development, and a brand identity. In essence, royalties are how franchises support themselves and how they support you the business owner. In effect, you are paying money with the franchise fee and royalties to license a system created by the franchisor because you will be saving yourself significant money, time and energy to reduce your risk of failure. In a franchise, the more successful you are, the better for the brand’s income and its ability to attract and retain quality franchisees. “In business for yourself not by yourself” is the oft repeated motto in the franchising world.
From the perspective of a foreign national investing in the US, a franchise gives new expatriates the opportunity to learn and adapt to a new country under the guidance and support of the franchisor. Not only will the franchisors support you, as they have a vested interest in your success (in the form of royalties), but so will the franchisees. I have participated in a franchise network where a significant portion of the support and encouragement I received came from franchisees who had no monetary interest in helping me. As cliché as it might be, a good franchise system is like a family of franchisees where each is co-dependent on the others’ success.
Another perk, is that the franchisor will usually provide you with access to a real estate team to help you identify and negotiate the best physical location for your business. They will look for a space that has the best traffic and demographics to support the business concept.
At last, and not least and especially for the E2 visa applicant, a franchise will already have written documentation of the systems, and a business plan in place. It is a plug-in and play concept that is designed to remove the guess work of business and focus on the monetary results.
Although there over 3,000 franchise concepts in the US, keep in mind that not all franchisors are willing to consider the candidacy of foreign investors. Furthermore, many concepts require outstanding communication, and a superior command of the English language is a prerequisite to succeed in some franchises. This narrows down the options for some foreign nationals whose English is not their first language. To many franchisors it can be cumbersome, and costly to accommodate varying time zones and to communicate with foreign investors. In addition, the visa approval, which comes after the foreign franchise candidate has been approved into the franchise and has invested, creates additional delays and uncertainties. An experienced business advisor will understands the E2 visa application process while assisting you with the business side of your endeavor and have access to franchisors that are willing and accustomed to engaging with E2 visa applicants.
Building your E2 Investor’s Visa Team:
In the case of the E2 visa applicant, building a team of experts for support in the pre-planning stages and research is critical. Once the business is created or chosen, entrepreneurs begin to build a team of employees and business associates. And yet, the biggest hurdle for all business owners is in the early research stage that many misguidedly never manage to comprehensively undertake, thus making poor initial decisions that create problems later. An experienced business advisor will understands the E2 visa process, and as needed will assist you with business plans, feasibility studies for either creating a startup, investing in an acquisition or helping you validate the most ideal franchise for you. Consider the resource of time and money that you will lose in the case of a rejected E2 visa, as you will need to invest in non-refundable moneys before applying for the visa. An even worse scenario, you have receive the E2 visa approval, have moved yourself and family to the US, yet your business idea fails. Perhaps you selected an inadequate real estate location for the business, or you simply picked the wrong business for your needs and your skills. It is hard enough for anyone to succeed in business, but for foreign investors and new expatriates, the challenges are incommensurable. A more effective approach is to begin by selecting a business expert who will be your go to US advisor for your business research, and your connector to other experts such as immigration attorneys, accountants, real estate agents, insurance agents, and others that you will need when the business has been launched. Both your business advisor and your immigration attorney can respectively help you navigate the many choices in E2 visa adequate business models and walk you through the requirements for a successful USCIS stamp of approval.
It is no coincidence that over half of all small businesses in the US are owned by immigrants (NYT) and 43% of America’s most valuable Fortune 500 companies, were founded or co-founded by an immigrant or the child of an immigrant (CFAE.) In spite of its flaws, America is still perceived as the place to shed one’s limiting beliefs and create a new life. It is after all, the land of opportunities where the pursuit of happiness is mandated. Much of that pursuit fuels the entrepreneurial spirit that one must have to make it in crossing any real or self-imagined frontiers. By self-selection and since the dawn of this great nation, the modus vivendi of immigrant entrepreneurs is embedded in the DNA of the American way of life. Thus my great respect for entrepreneurs in America drives me relentlessly. I admire the fire in the belly of those, born citizens or expats, who yearn for the promises of a self-sufficient life. For the E2 visa applicants who have access to liquid capital and who are lucky enough to be citizens of one of the 80 countries engaged in a reciprocity treaty with the US, starting a business and making a life in the land of opportunities is a reachable and worthy dream. For others from non-treaty countries, the EB5 visa, although requiring a larger investment, is another possibility that we will examine in future discussions.
80 Countries with Investor Visa Treaty Reciprocity with the US:
Bosnia and Herzegovina
Trinidad & Tobago
Source: U.S. Department of State, travel.state.gov/content/travel/en/us-visas/visa-information-resources/fees/treaty.html.
Key factors and costs to consider between the startup of an independent business, an investment in a new franchise unit, the acquisition of an independent business resale, and a franchise resale.
|Example (1): Boutique, Retail, Small Salon or Coffee Shop Comparison – in US$|
|COMPARING BUSINESS MODELS ©||New Startup Business||New Franchise||Business Acquisition- Resale (3)||Franchise Acquisition – Resale (3)|
|Leasehold Improvements (2)||$250,000||$250,000||included in acquisition price|
|$50,000||$50,000||included in acquisition price|
|Inventory (2)||$20,000||$20,000||included in acquisition price|
|Acquisition w/ Equity / Goodwill (3)||$500,000||$500,000|
|Attorney/ Visa fees/Entity Setup/CPA (4)||$15,000||$15,000||$15,000||$15,000|
|Franchise Fee/transfer fee (average)||no||$30,000||no||$15,000|
|Business Advisor: Business Research & Plan (4)||$3,000||$3,000||$3,000||$3,000|
|Total Business Investment||$338,000||$368,000||$518,000||$533,000|
|Royalties & marketing fund||0||6% – 12%||0||6% – 12%|
|Economies of scale||no||yes||no||yes|
|Easier E2 visa Application Approval||no||yes||maybe||yes|
|Staff in place||no||no||yes||yes|
|(1) Typical brick and mortar location – business to consumer type (B2C) boutique, retail, small salon, coffee shop – cost of equipment and leasehold improvements vary per geographic location and per business type.|
|(2) Estimate for space of 1,000 square feet, ~ 93 square meters|
|(3) Assume acquisition of profitable business with $200K/year net profit before taxes – Seller’s Discretionary Earning (SDE) of $250K and multiplier of 2.5.|
|(4) Estimate: consulting fees commensurate to scope of service provided.|
|Copyright, Open For Business, LLC 2018-2019|
“Immigrant Founders of the 2017 Fortune 500.” Center for American Entrepreneurship, startupsusa.org/fortune500/.
“Opinion | Immigrants and Small Business.” The New York Times, The New York Times, 30 June 2012, www.nytimes.com/2012/07/01/opinion/sunday/immigrants-and-small- business.html.
U.S. Department of State, U.S. Department of State, travel.state.gov/content/travel/en/us- visas/visa-information-resources/fees/treaty.html.
Was it your nth- layoff from yet another company where again you had poured your heart and soul into a mission, a vision, a project that, if successful, would bring glory, promotion and a forever needed raise? You followed the rules, met and exceeded unattainable standards of work ethics and dedication. Busy bee, you even missed a few or too many of your kids’ events, and even special anniversaries. Most evenings you arrived home too exhausted to care about your spouse’s predictably similar day or to hear your kids announce the latest school drama. Instead, you sat in absent torpor in front of an agitated screen, still worrying about that latest deadline, just to rest enough so that tomorrow you’ll successfully beat another horrendous commute to the corporate beehive. Perhaps you even held in your hand a daily well-deserved beer, a glass of wine or straight whisky to numb the buzz of that annoying question whispering in the depth of your soul: What if? What if there was another way? Today the kids are grown and gone. Chances are your spouse has moved on too with part of the assets you both worked so hard to build. Those moments of simple family bliss and happy chaos are forever gone supplanted by all the days at the office that you didn’t missed but can’t even remember.
At the end of days, weeks, months, years of too many hours working, diligently answering texts and emails during your vacation, working or traveling unpaid extra hours just remain “competitive”, it hits you in the face more painfully than usual that corporate loyalty is a one way street. They said upon hiring that your loyalty was expected, yet your company had to let you go because of outsourcing, right-sizing, mergers, or a latest CEO’s new fangled strategic plan that will make the shareholders happier and richer. Here is how it goes: you’re expected unbounded loyalty to the company, the company is expected loyalty to its shareholders. Its C-suite executives who are also shareholders happily comply. No one is loyal to you worker bee, and from the looks of it, you are not even loyal to yourself. No offense meant here, you were misled that the American Dream could be built out of enough W2 forms.
On this rosy pink Friday your income slipped from 100% income to a terrifying 0. Granted, in 20 +/- years, you have experienced a few of these, survived and sometimes even got a better job in the end. Still, these layoffs are increasingly frightening. Maybe you are in your 40s and 50s and becoming dispirited as you watch another generation of corporate veterans, almost of your generation, join the 12% unemployed amongst that age categories of 55+. One of your former colleagues of that age was laid off 2 years ago and is still looking for work notwithstanding the vagrant emptiness in his eyes, and rumors that his marriage is in trouble.
This morning, the mom and pop business around the street corner takes a new halo of interest in your mind. That small business, the one you have patronized over the years with your barely hidden self-satisfied smugness of one who is unto much greater missions, visions and resources. You deeply believed all that time that corporate provided more security to you and your family than the unpredictable small business world of Main Street America. Maybe this was true when your parents or grand-parents graduated from high school or college, got an entry-level job from a solid company and moved up the ladder to retire comfortably with a nice pension and a paid-off white picked fence. After all, in your mind, only a select elite of those educated, interviewed, groomed, trained and bent to the right shape, are hired to join the corporate masses of lucky ones who join a “family” of glorious slaves. Others less fortunate, opened a dry-cleaning business to clean the suits of corporations. Sadly, over decades of changes in corporate America, you and million others haven’t noticed that gradually, as the power of workers’ unions erodes, as the world opens access to free trade and cheaper labor routes, as corporations take on the persona of real human voters to cast and buy votes in our Government, income security for you and your family is not longer found in corporate America. Like a slow-moving tectonic plate, it just begins to sink in that maybe, just maybe, there has got to be a better way to live; that this senseless rat-wheel is leading to nowhere but to your exhaustion.
Today you ask the business owner you have known since she was scrubbing the floor of her first budding shop, how her 3rd restaurant is doing. Maybe you observe that your neighbor works as hard as you do but instead of working on someone else’s dream, he is busy growing his empire of multiple franchise units. Yet, he never seems to miss any of his kids events and, unlike you, he takes several family vacations each year. Maybe you asked what this couple is going to do after they retire and cash in on the equity they built over 20 years when they sell their small and thriving manufacturing business. As you were trading your time for dollars, they were trading time for dollars too, but in parallel they work hard at growing the value of their small biz which will translate into a nice exit package when they are ready to retire. You worked hard too but you worked hard on someone else’s equity. Or maybe, you just envy the simple and modest life of this sign–making business owner who goes surfing anytime the wave is good. Perhaps, as you suffer that dreadful commute every morning, you wonder what kind of lives are of those you see on the other side of the freeway and who golf while they “network” among peers. Or possibly, you envy the mom who seems to have it all, time for her three kids’ activities, time for her daily workout that keeps her in amazing shape, and time to pursue her passion in her small business that she operates semi-absentee while a manager handles the day-to-day operation of her downtown store. Yes, she might even hold a Stanford Bachelor’s degree, or even an MBA. And what good it did her, right? Maybe you are dreaming of a business that you can operate from anywhere in the country or even the world, and where you could ski or dive to your heart’s content between calls with your remote clients.
This morning rings your wake-up call from this American nightmare. In my practice as small business advisor to those exploring their options in business ownership, I frequently witness heart-crushing desperation in the eyes of former employees whose self-image was shaped by decades of companies’ corporate values and who suddenly find themselves become irrelevant, obsolete and replaceable by younger albeit less experienced, but more malleable and cheaper versions of their them. It is painful, but let me reassure you: that painful wake-up call might just be what you needed in order to open your mind to another parallel world. A world alongside which you have lived all your life but you have not really seen. One that you never took time to understand. In my next articles, I will reveal a different approach to a fulfilling LIFE, one that you may not have considered. A LIFE, as in Lifestyle, Income, Freedom and Equity that you will consciously design to fit your priorities. I will show you that you really are the CEO of your life, and that your life IS your business. We will discuss how to go about designing this new chapter of yours to a better, happier and more fulfilling existence. We will examine several approaches to business ownership and how you can identify the best one that matches your strengths, talents, and your goals. Business ownership is a tool, a vehicle, and also a machine to human relationship that needs to be managed between you and your business. The best business is unique to you. It is the one that is most in alignment with who you are, and with who and with what is important to you. It all starts with the vision and the mission for your life with you as the author and creator.
To be continued…
“Our mission is to provide practical education, outreach and resources to help small to midsize businesses succeed by collaborating as professionals each in our own field of expertise, by leveraging our combined knowledge, and by networking.”
Open For Business is a business ownership lab founded by Patricia Bottero St-Jean, International Business Advisor, Mentor and Speaker. Our educational environment aims to optimize success in small business ownership to aspiring, to new and to established business owners, and to raise awareness of the opportunities in small to mid-size business either as full-time owners/operators or as absentee/semi-absentee investors.
Individuals considering a transition to business ownership: Before you jump, let us guide you through the landscape of all types of business opportunities. Your most successful business out there, is the one where you will best leverage your talent, your strength and your experience and one that is most in alignment with your goals in Lifestyle, Income, Freedom and Equity (LIFE.)
Business owners: Do you have a business and wish to take it to the next level of growth, profitability or equity building? If so, please join us and attend our workshops and networking events.
Expert professionals serving business owners: Do you have an expertise that helps business owners, succeed, thrive and overcome obstacles?
If so, consider becoming an active member of our Business Ownership Lab, where you can help business owners by sharing your knowledge and by networking with a select group of experts.
As our community grows we are looking for SMB (Small & Midsize Business) experts who are also great presenters and educators: Accountants/Bookkeepers, Attorneys, Business Development Experts, HR Experts, Marketers, Recruiters, SMB Funding Experts, Social Media Pros, Webmasters, Writers etc…
I look forward to growing with you!
Yours in Lifestyle, Income, Freedom, Equity (L.I.F.E.) Success,
Patricia Bottero St-Jean, MBA