International Business Incubator (IBI)Operational Services for U.S. Subsidiaries
MI’s International Business Incubator (IBI) helps companies enter the U.S. market quicker, with fewer risks, and lower costs. The IBI provides a comprehensive range of business development support services that lower the cost and risk associated with opening a foreign subsidiary while at the same time accelerating the entry process into the U.S. market.
The IBI program allows your company’s management to focus on growing its U.S. subsidiary and penetrating the U.S. market, while MI fractionally staffs and manages the back-office operations. The tasks MI handles are important for successfully operating a company in the U.S., but are not part of your company’s core competencies (i.e. your products or services).
For over 20 years, we’ve excelled at helping small to mid-sized companies establish in the U.S., so we know the needs of foreign and foreign-owned companies. Our staff gives 360-degree support to help your company succeed.
How the IBI Works
Your employees (here or abroad) can focus on their core capabilities while our IBI provides operational support in the form of:
- Fractional staffing and daily management for all back-office work
- Advice to avoid common (and costly) entry mistakes
- Strategies to streamline processes and grow the company
- A physical address in the U.S., warehouse space if needed, and dedicated office space if available
- A dedicated phone line & receptionist
Who the IBI is For
- Small to medium-sized companies looking to enter the U.S. market with marketing and sales offices
- Existing foreign-owned or led companies looking to strengthen their current U.S. presence
- Larger companies who want to be operational while their manufacturing or warehousing facilities are being built
Entry Method 1
The foreign company sends one person who does it all – accounting, sales, marketing, etc.
Taxing on the individual, who cannot focus on sales and growth. Also, they are not experts in doing business in the U.S.
Entry Method 2
The foreign company hires a complete staff for its U.S. operations.
Large financial investment at the start without enough work. Need staff with “start-up” mentalities.
MI’s IBI Solution
Our IBI team handles all back-office operational needs, acting as fractional employees of the new company.
Lower cost with maximum effectiveness. Plus, our managers oversee the work, relieving your team of HR responsibilities.
Using the IBI, your U.S. subsidiary would look like this:
Back-office Functions Covered Under the IBI
Warehouse & Logistics Integration
Warehouse & Logistics Integration
MI can help track imports and interface with U.S. customs. If products need to be stored in the U.S., MI offers IBI clients the option to use our warehouse in Spartanburg, S.C. Otherwise, we will manage the relationship with a 3PL to ensure inventory is correct and shipments go out on time.
Order Processing & Vendor Relations
Order Processing & Vendor Relations
Bookkeeping & Accounting
Bookkeeping & Accounting
MI will reconcile accounts, and deposit and create payments. We provide monthly P&L and balance sheet reports and can create cash flows, yearly forecasting, and more for analysis, plus coordinate with the CPA for tax reporting and compliance.
Marketing & Sales Support
Marketing & Sales Support
Training & Software Implementation
Training & Software Implementation
MI can provide training in QuickBooks, help with accounting software implementations and conversions, help implement EDI software, demonstrate CRMs, and provide training with marketing tools.
Don’t see what you need above? No problem! In addition to the services we provide through the International Business Incubator, we work with immigration attorneys, corporate attorneys, certified public accountants (CPAs), human resource (HR) professionals, insurance agents, and more to offer a seamless service to you. And if that still does not cover it, we will work to find the information or service that you need.
Key IBI Advantages
Value staffing solution
You remain in charge
Benefit from our years of experience
Flexibility in location
Avoid common entry mistakes
Local inventory stock and management
Frequently Asked Questions
Your initial investment is low. However, there is no fixed rate for the IBI. Services are billed hourly depending on the task and level of expertise needed to execute them. To join the program, you must pay a base retainer of $4,500.00 per month for 1 year.
With this, you have access to all of MI’s personnel and services when and as needed. Our staff is diverse, multilingual, full-time, and experienced at working with multiple companies at the same time. This makes the IBI a great initial staffing solution for your U.S. company.
The IBI starts at $4,500.00 a month, which equates to $54,000 a year. To put this in perspective, a single, full-time $41,000 employee will cost a company roughly $53,300 a year (this includes company taxes and benefits). Currently, in the U.S. labor market, a company would be hard-pressed to find an order processing staff member for this salary. However, with roughly the same amount, you will have access to a full team of MI employees who specialize in all areas of the business. In addition, you will not have to deal with any HR hassles pertaining to MI’s staff. The team reports to an MI Account Manager, who then handles any issues and ensures that your company’s U.S. entity continues to operate smoothly.
Bear in mind that this does not equate to 40 hours of work per week. The number of hours you can use against the $4,500.00 monthly retainer depends on the tasks handled by the back office. The more hours worked, the higher the final bill per month.
- Up to $4,500.00 worth of IBI hourly services
- 20% discount on any IBI hours worked over $4,500.00 per month
- 20+ years of expertise in starting and running U.S. subsidiaries for foreign companies
- A U.S. business address – you can use MI’s NC or SC address for your company headquarters
- Use of MI’s Conference Room in NC when needed
- Access to temporary office workspace when visiting MI’s NC or SC locations (If you need dedicated office space, and there is availability, we can do this under a separate lease agreement)
- Access to the internet when on site
- Use of MI’s fax line
- Monthly reports:
- List of services used
- Financial Report, which includes the P&L, Balance Sheet, and Cash Flow Statement
- Additional Hours – any hourly services that exceed the monthly $4,500.00 retainer. But remember, you will receive a 20% discount on these “overage” hours.
- Phone line expense – We will create a dedicated phone line to be answered by MI staff as your company. We use a VoIP system and a flat fee is charged to your company for this service.
- VoIP Dedicated Extensions – If you need to have any dedicated phone extensions on our plan for any on-site or remote employees, an additional charge per dedicated phone extension will be billed. This does not include the equipment charge from the VoIP provider.
- Additional Software – Unless otherwise agreed, we set up IBI clients on QuickBooks Online (QBO) for your U.S. accounting software, and SOS Inventory if you have physical product in the U.S. We get better rates than if you purchased the software on your own. We bill this monthly at cost with no additional mark-up.
- Your Vendor Bills – If any vendors bill MI instead of your company directly, we will bill you back for the expense.
- Out of Pocket Expenses – Any out-of-pocket expenses by MI staff are billed separately.
- Dedicated Office Rental – If you need dedicated office space, and we have room in our NC or SC locations, a lease agreement for the space will be billed separately.
- Warehouse Storage – If you use our IBI Warehouse to store any goods, a separate Warehouse storage agreement will be necessary. (Any hours worked by the warehouse staff can be billed against the IBI retainer).
- Management Services – If you need MI’s senior managers to serve in an interim management position for your company (CEO, CFO, Board Member, etc.), this would be billed under a separate Management contract.
Again, we have a monthly retainer that starts at $4,500.00 per month with a one-year contract. Like other professionals, MI charges by the hour. We have tasks divided by skill level and all employees track their time. You will receive a monthly report of the hours and can add and retract services as needed.
Any hours worked over the retainer are billed at a 20% discount and only billed every quarter. That way, if you go over budget one month, you can adjust the next. This also means that while we offer a full range of services under the IBI, you only pay for exactly what you use. Only need 10 hours of marketing this month? No problem. Sold more than expected and need extra hours for order processing than the month before? We’ve got you covered.
MI reconciles IBI client hours every quarter. As an example, if your company uses only $4,000.00 worth of services in January, but then needs $500.00 extra in February, then everything will be even. However, if at the end of Q1 you haven’t used all of your hours, they will be lost and the accounting will begin anew in April for Q2.
We sometimes get asked this. A U.S. subsidiary is a separate legal entity from the parent company, which is different from having a branch office in the U.S. (some people use the terminology interchangeably, but they are not). Having a subsidiary makes doing business in the U.S. much easier.
For example, if you want a U.S. bank account for customers to pay into, if you want to send employees from the parent company to work in the U.S., or you want U.S.-based insurance, you will certainly need a U.S. subsidiary. These are just a few examples, and we are happy to discuss more with you!
From an organizational standpoint, your U.S. subsidiary would still be 100% owned by the parent company (or the individuals who have invested in the new U.S. entity). When MI managers are responsible for supervising an organization (either as a member of the Board, as CEO, or as another member of the management team), they do so just until you are able to replace them with a new hire or an employee from another location. You remain the owner of your company at all times.
We can get you operational in less than a week. Establishing a U.S. entity is fairly quick and painless, and does not require a large financial commitment to open. Using our address and setting up a phone number is also quite painless.
Obtaining your EIN, getting bank accounts established, and putting the correct insurance in place can take a few more weeks. The same for if you need documents reviewed by a corporate lawyer.
But, we can start answering phones and interacting with your customers in no time at all!
No, your customers will not know MI exists. MI’s staff operates as the U.S. subsidiary’s fractional employees. As such, we:
- Communicate via the U.S. subsidiary’s emails
- Answer and call from the U.S. subsidiary’s phone number
- Hand out U.S. subsidiary business cards
With MI’s staff acting as your employees, the U.S. operation will be bigger – there are more people and departments for the company’s customers to interact with. This gives the market a deeper sense of commitment, which can itself help drive sales. And best of all, it’s real – MI does all the functions a direct employee would do.
Your CEO or assigned manager remains in charge and we report to them. They will benefit from our years of experience working with other companies entering the U.S. market.
However, if you have limited resources and would like interim management, either while your manager applies for a visa, or you look to hire the right person, we can fill that gap for an additional charge. See our Management Services section.
We pride ourselves on building long-term partnerships with our clients, so we do require at least a one-year contract. We have clients that stay with us for 12 to 18 months and others that stay with us for years. We are focused on helping you grow, so we celebrate when you are big enough to leave the program and help train your new employees for a smooth transition. After all, the purpose of the program is to assist companies in achieving a level of self-sufficiency that will allow them to successfully compete in the North American market.
Each company is different and we can help mitigate risks in multiple ways. Some of the more frequent are:
- Using the IBI to run your U.S. subsidiary, as a clearly distinct legal entity, helps you avoid piercing the corporate veil. This is important from a litigation and taxation point of view.
- Providing outside analytical process review by:
- Suggesting improvements focused on growing the company
- Implementing U.S. best practices in multiple areas
- Ensuring margins exceed operating costs
- Offering marketing and sales strategies to break into the U.S. market
- Helping you implement proper procedures to safely use U.S. bank accounts to process and receive payments.
Yes, MI’s staff would support any direct employees the U.S. subsidiary hires, such as sales and technical service personnel, as well as train direct employees to replace our team as your company grows.
Working with your employees (here or abroad) is essential to ensuring the U.S. subsidiary runs smoothly. Our Value Chain details which tasks MI’s employees can handle on their own, which need to be in coordination with you, and which are not covered (but supported) through the IBI.
We have found that to exceed in the U.S. market, you need a salesperson with experience and connections in your industry. We have worked in a lot of industries, and know how to establish procedures and instill best business practices across industries, but we do not have the connections to jump-start sales. An industry expert is the best person for this job. Plus, you want a salesperson who is 100% dedicated to your business to help ensure success!
The same goes with technical service. You are the experts. We help support, but take a back-seat to let you do what you do best.
Yes! Our IBI clients have the option to store inventory at our warehouse in Spartanburg, S.C. Our knowledgeable staff will handle inventory management, pick-and-pack, and returns processing, among others. You can learn more about this option here.
The accounting department of the IBI acts exactly as an in-house accounting team for your business. We provide a full-service approach, with bookkeeping services as well as providing financial statements and higher-end financial analysis. We have a close visual of the details that make up your financials and can readily respond to noted fluctuations that can impact your company’s performance.
Certified Public Accounts (CPAs), on the other hand, are utilized to file your company’s taxes, render opinions on audits, help with transfer pricing, and represent you in case of an IRS (Internal Revenue Service) tax dispute.
Because of the 360-degree services we provide as an IBI, and how many of those aspects of your company can affect your financials, we know what questions to ask the CPA to ensure your success, and what questions to ask you to make your books ready for tax preparation and other annual audit paperwork. In short, the IBI’s accounting services provide everything leading up to tax preparation, which is where a CPA steps in. You will need both to be successful in the U.S. market!
MI has worked with several local immigration attorneys, corporate attorneys, CPAs, and more. We can introduce you to them and let you decide if you would like to work with them as well. Alternatively, if you already have a team of professionals in place, we can seamlessly work with them instead.