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The US vs.European Business Culture Differences

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by Startacus Admin

There are many similarities between the business culture in the United States and Europe and we can learn a great deal from the way both conduct their business. There are however a few subtle differences that many business experts have picked up on and here's just a few that may well just ring true...

Financing a Business Endeavour

First of all, within the private sector, European business owners have a much better track record on how they finance their endeavours. Led by the government's example of financing businessgrowing the public economy mostly through debt, business people in the private sector in the United States tend to finance their initial endeavours through debt and loans. This however is not the case for most successful European entrepreneurs.

European entrepreneurs tend to rely on a dual strategy of self-funding and equity distribution in order to fund projects. In many cases, small businesses are funded by family and friends with everyone taking a bit of responsibility as well as equity. The businesses that grow are then consolidated into the most interested hands, but everyone benefits with no risk for a debt default.

However whilst UK startups often complain that their US counterparts find it easier to gain angel investment and equity based funding it seems that US based Angels are often happier to take a gamble on a startup. 


In the US, the salary structure seems to be slightly higher than that of the UK. According to the Salary Counter, it is estimated that the average salary per year in the US is $50,786, compared to an average of £26,000 in the UK. When we take current conversion rates into consideration, the average US salary per annum converts to £34,276. It is quite evident then that this is a significant gap which we would hope will decrease over time. As well as this, the top rate of federal income tax in the US is 35% if you earn more than $398,100 per annum, compared to 40% tax in the UK if you earn just £42,475 per annum. It would appear therefore that in the US, workers are not only making more money, but they are also able to take home a lot more of their pay cheque.

In terms of salary, a lot of course depends on the particular business sector one works in. For example, whilst it is clear that there is a high demand for professionals in the IT sector both within the US and in Europe, the salaries they are paid can vary considerably. Although it would seem that IT professionals in the US can currently demand higher salaries, one could argue that this may not always be the case, particularly as the Global economy truly comes together.

Diversity and differences in culture

The US is much larger than UK and as a result is a lot more diverse when it comes to different languages and cultures. However, when it comes to the business arena, there are distinct similarities - particularly when it comes down to general work ethic and attitudes to business.  business culture

That being said, it’s important to remember that Europe is composed of 50 plus countries and consequently the business culture, business ethics and general value of business, can vary considerably amongst them.

Even within the UK, the culture of business can vary within each region or county. For example, a Londoner may have an extremely different approach and attitude to work, business networking and that all important work life balance when compared to someone from a more rural area.

Business Structure

The internal structure of businesses from the US and the UK are fundamentally different as well. European businesses have many owners, and in many cases, the Chief Executive will be a part owner in the company. In the United States, this is not necessarily the case. Ownership tends to be consolidated within a few hands, and generally any time that it is spread out, it is done so forcefully with a minority forcing their way into majority shareholdership.

What the US can Learn from the European Business Culture

Although the rate of business growth in the United States is higher that it has ever been, it is also noted that it is business cultureless stable in comparison to other countries. European businesses are much steadier with less risk, even if they do not grow as quickly. American business people can definitely learn something about moving to a slower drumbeat when it comes to building a company. In many cases, the largest rising companies will be nowhere in sight five years down the road.

This gives rise to the theory that perhaps European companies are able to last much longer thanks to the way that they handle things. However it is essential to remember that no matter where your company is based, certain things are a given. For instance, you must always ensure that you have all that you need in place so that your company can not only grow and become successful but that at all times the interests of your business are protected.

For example, having secure business insurance is an absolute must - particularly in case there are any drastic changes to the economy which may impact on your overall business’ success. It would also be worthwhile checking out this business toolkit for some useful guides and handy links to some of those all essential business practicals.

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Published on: 31st March 2015

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