Founders usually underestimate the cost of US entry by half, because they budget the visible line items (a US entity, a flight, a trade show) and miss the ones that dominate the total: the fully loaded cost of a US hire, cross-border tax and accounting, and the cost of a year spent executing a plan that wasn't ready. Here is a realistic year-1 budget for a serious US move, and why a failed entry so easily passes US$500,000.
These are the ones every founder budgets. They are real and they are small:
US entity setup: US$2,000 to US$5,000, plus US$100 to US$300 per year for a registered agent.
Cross-border legal and accounting: US$5,000 to US$15,000 in year 1. Higher if you do an entity flip or have complex tax exposure.
Trademark and IP protection in the US: US$1,500 to US$5,000.
Travel: US$20,000 to US$50,000 for regular founder trips across a year.
Subtotal: roughly US$30,000 to US$75,000. If this were the real cost, US entry would be easy. It isn't.
The single largest line is almost always your first US hire. A mid-level US Account Executive costs US$200,000 to US$300,000 fully loaded (base, commission, benefits, payroll tax, and EOR fees). A US sales leader costs more. Even one senior US hire can be larger than every other line item combined.
If you hire two people, or a leader plus a rep, US labour alone can run US$400,000 to US$600,000 in year 1.
US customer acquisition: US marketing and demand generation cost far more than NZ. Budget realistically for the market you're actually in.
Health insurance and benefits: US employer health cover is a significant per-employee cost with no NZ equivalent.
State-by-state compliance: sales tax registration and payroll tax in multiple states adds administrative cost.
Product and support localisation: US customers expect US-hours support and US-specific features.
For a serious, staffed US entry, a realistic year-1 budget is US$300,000 to US$700,000, and most of that is committed in the first two quarters before meaningful revenue arrives.
That is why a failed US entry can easily cost more than US$500,000. The money is rarely lost on the entity or the trademark. It is lost on premature hiring, wrong pricing, weak channel choice, and poor customer acquisition economics, each of which is recoverable alone and unrecoverable together, compounded over a year of runway.
The least expensive dollars in a US entry are the ones spent deciding whether and how to enter before the big costs commit. Twelve months executing the wrong plan is far harder to recover from than the cost of resolving the plan first. That is the entire logic of starting with a Diagnostic.
FREQUENTLY ASKED
How much does it cost a New Zealand company to enter the US market?
A serious, staffed year-1 entry realistically runs US$300,000 to US$700,000. The largest cost is usually the first US hire, at US$200,000 to US$300,000 fully loaded, not the entity or legal setup.
Why do founders underestimate US entry cost?
They budget the visible costs (entity, travel, trademark) and miss the dominant ones: fully loaded US salaries, US customer acquisition, cross-border tax, and the cost of a year spent on a plan that wasn't ready.
How can I reduce the risk of a costly US entry?
Resolve pricing, first buyer, channel, and unit economics before committing the large costs. The expensive failures come from executing the wrong plan, not from the setup line items.
US ENTRY COST · FOR NEW ZEALAND COMPANIES
The US Market Entry Diagnostic is the smallest line in a US entry budget and the one that protects the rest. It identifies the issue most likely to cost you six figures, and gives you a direct answer on whether to go, delay, or redesign, before the US$500,000 is committed.
Start the conversation