When it’s time to set sail, will you head to The Old World or the New?

So you’ve done the legwork and decided international expansion would be a great fit for your business. Well done – that’s the first step of many.

But before you can ever raise anchor and set off to new markets, you’ll need to choose a region that will support your business and know its corporate climate backwards and forwards.

If this year’s Global Competitiveness Index is any indication, Europe and the US are two of the best regions in the world to plant a flag and lay claim to market share. The US and six countries in Europe ranked among the top 10 most competitive countries in the world, and many of them have held their place on the list for years.

If you’ve narrowed it down to these two regions, it’s time to look at the similarities and differences between the two.

Be warned: The US is a big, big market

Aside from long-dominant Switzerland, stable Finland and rapidly growing Germany, the US is the next best destination in the Western World. Ranking fifth, the US rose two positions this year to beat out the Netherlands and Sweden.

The GCI spoke highly of the Stars and Stripes’ sophistication and innovation, university system and focus on research and development. It also added that its flexible labour market was highly valued, supported by the “sheer size” of the economy.

But herein lies the problem. The US is big. With a population of around 300 million and ranking as the fourth largest country in the world by area, a new business can’t simply waltz in and expect to find customers above the fruited plain.

“What people do is think ‘Oh, the US is a big market, it’s got 300 million people, let’s go there,'” said John Varvarigos of Naked Business Consulting.

“But the reality is population has nothing to do with success of growth. It’s all about return on invested capital. It has everything to do with revenue that’s generated customer acceptance.”

Whether a country has 20 million people or 200 million people, it’s best to think in terms of a single dollar, and how much you’re getting back from that buck.

Finding success in the European machine

If the trade winds steer you toward Europe, you’ll have another big decision to make before you run aground: Which of the six European countries will be your new home?

Switzerland, Finland, Germany, The Netherlands, Sweden and the UK all rank among the top 10 most competitive countries in the world.

A move to Europe ensures you’ll be surrounded by healthy economies, but just like in the US, you’ll want to hone in on a single country or region. Despite the countries’ close proximity, Europe is highly fragmented, and getting your feet wet in Germany doesn’t guarantee success in Switzerland.

However, this fragmentation in business climates doesn’t stop the problems of neighbouring countries from leaking elsewhere. A move to The Netherlands, for example, will require an understanding of the local market as well as the issues of Europe as a whole.

These, according to the GCI, include tepid regional demand that has struggled to rise in the wake of the financial crisis and huge disparities between the countries. Spain ranked 35th, Italy came in at 49th, Portugal at 51st and Greece at 91st.

In short, a move to either the US or Europe can be a great business decision, provided you go into it with the understanding that getting your foot over the border doesn’t mean rapid growth throughout the region.