We are bringing you an interview with Josef Scharfen, who flew to the United States as a student with no backing and no contacts. What he did have, however, was determination and enthusiasm for America. Fast forward to the present: today, twenty years later, Josef is an American citizen with his own business, family, home and horse in the U.S. He is simply at home there. However, he hasn’t lost contact with Czechia, and his company, Hydra Consulting, helps Czech companies enter the American market.

1) Josef, what was the crucial moment that led you to establish Hydra Consulting?  

There wasn’t a single crucial moment, but rather a series of moments when I realised that I knew the way, the path on which others were stumbling. Before Hydra Consulting, I imported goods into the U.S. from Europe. I came across one obstacle after another, from legal matters and taxes to how to cash a cheque made out to a European company. I learned a lot, but I also made a lot of mistakes.

I eventually succeeded in selling my original business. But I still had the desire to make the path easier for other companies. Hydra Consulting was established as a response to what I myself lacked at the time: a reliable partner that would comprehensively advise me on everything from establishing an American entity, through filing tax returns and keeping accounts, to getting started with sales. Hence the name Hydra – I needed someone with multiple heads. Today, I am that partner for others.

2) Is there anything about Czech companies that still surprises you? Something that you know you must explain to them early on, before they make a mistake?

Czech companies are often surprised by the immense size of the American market.  On the one hand, it represents a great opportunity, but on the other hand, the situation is completely different when they encounter the challenges posed by such a market, which they have to face every day.

Companies often think that a strategy that worked in Czechia or in other markets will also work in the U.S. It won’t. It is necessary to have a strategy prepared for the American market, selected key products and clarity as to where and how to begin.

What companies perhaps find most interesting is how to start selling in America. Sales generate revenues, with which it is possible to finance further expansion. Therefore, I also strive to help companies get started with sales. After the initial analysis, we are able to advise them on where and how best to begin. It’s often possible to do so even without immediately hiring salespeople, who are prone to leaving a company if sales don’t go well from the outset.

Besides underestimating the American market, another big mistake is not filing a tax return and form 5472 on foreign ownership, if the given company is more than 25% owned by foreign entities. We’re occasionally contacted by a client who established an American company on the internet, but never filed a tax return and is thus exposed to heavy fines.

3) What do you enjoy most about your work? On thing must surely be the adrenaline. 😊

The clients. Our clients are people with incredible stories who think beyond the borders of the Czech Republic. They often have experience with expanding to other markets, sometime even unsuccessfully, but they never give up.

I never get bored. One day I’m helping a software company, the next a manufacturer and the day after that a car repair shop, for example. And yes, adrenaline is part of that.  But honestly, what I enjoy the most is when a client succeeds.

Two years ago, I organised the first edition of the US Expand networking event in Prague. I wanted our clients to get to know each other better, share their experiences and perhaps even become partners if their fields allowed for that. Or they could simply get together in America someday. This led to the creation of a community of companies that have already expanded to the U.S. or are only just considering it. And we will meet again this autumn.

4) Hydra Consulting covers a truly broad spectrum, including company establishment, taxes and representation at meetings. What does collaboration with a client look like stating with the first contact?

It’s very individual and depends on the client’s specific needs. Some address legal matters first, others establish an American entity straight away, while still others need assistance with the visa process or their initial customers.

However, we usually meet for a one-hour introductory consultation, which we offer to companies free of charge. It’s an opportunity to get to know each other and to discuss the specific issues that the company is dealing with and how it views expansion. If a company wants to apply for an investor visa, for example, we will discuss the types of investments that can be figured in, whether the scope is sufficient and what further steps the company should take in the future in order to ensure that the whole process is successful.

Just as our clients choose us, we choose them. We work with companies that truly intend to build something in the United States. We start with, for example, obtaining visas and then we take care of their accounting. By that, I mean that our clients trust us and stay with us.

5) For what kind of Czech company or start up does entering the American market make the most sense and, conversely, when is it better to wait?  

I wouldn’t say that there is any sector in which success is guaranteed in advance. America is great in that a company can be successful there with either a specialised technology costing hundreds of thousands of dollars, which only a few dozen companies may buy each year, or subscription-based software solutions with thousands of users; both models have a chance.

I would waiting to companies that don’t yet have a clear idea of what they are doing at home. America won’t solve their problems, but rather amplify them. Expansion makes sense only if you know what you’re going to sell and why customers should trust you. Without that, entering the American market is a risky, expensive venture without a clear outcome.

6) What is your most important motto in life?

Don’t give up. Almost all of our clients who have truly succeeded in the U.S. did so on their second or third attempt. They went there, hit a wall, adapted and tried again. What they all have in common is a passion for what they do. Without that, it’s impossible to succeed in America. I know something about that, because I’ve made that journey myself.

More information about Hydra Consulting is available at hydraconsulting.cz