Lessons about doing business in Germany

If you are interested in doing business in Germany you should be aware of the special character of German business culture. Germany is the fifth largest country in Europe. This country is covering an area of 357,022 square kilometres and looking at other European countries only the Ukraine, France, Spain and Sweden are bigger. Germany has the largest population in the EU with a population of 85 million.

Remember that Germany still has the EU’s largest economy including a gross domestic product (GDP) of EUR 2,574 billion. This makes Germany fourth place in the world behind the US, China and Japan.

Because Europe does not really have borders, Germany shares not real existing borders with nine other countries. All of these countries have a high international business culture. This includes Denmark, Poland as bridge to East Europe, the Czech Republic, Austria, Switzerland, France, Belgium, Luxembourg and the Netherlands. All over the world Germany is known as the country of poets and thinkers. Bach, Beethoven and Goethe were all German, alongside composers Händel, Schumann, Mendelssohn, Brahms, Wagner and R. Strauss. Some of the world’s greatest German philosophers include Kant, Hegel, Schopenhauer, Nietzsche, and Heidegger.

Germany’s students score higher than average on the OECD’s PISA scale, and 86 percent of adults aged 25–64 have completed at least upper secondary education equivalent of a high school diploma. With this Germany performs above the EU average of 74.2 percent. It is noteable that Germany has a very high level of employment an a very good social and health system.

You might loose your face – but you should not care

Whenever you are doing business with Germans you need to know that Germans are very direct with all. If there is any critics with your product or service they will tell you immediately. If you are coming from Africa or Asia this can be very stunning if you are not prepared. However, this does not mean that Germans are offensive. Germans can be very polite even they seem to be very cold and conservative

They expect that you can handle critics and that you react immediately. The typical German is very fast in business and always expect results – and not false promises. So whenever you are doing business in Germany remember that most Germans do not know much about loosing face mentality. So just do not care about this in Germany.

Only one rule: contracts

As I told you Germans are very conservatie in business strategies and therefore nothing more rules than perfect written contracts. Even that from the law point of view a handshake can sign a contract, you need to know that most Germans love regulations and contracts. Germans do not offer perfectly written contracts, they nearly always let them check by a laywer. You need to be prepared for this. Whenever you deal with contracts it might take some time. And when Germans take some for signing a contract I mean that this is done in most cases within a few days. German business is fast, very fast for many people from other countries.

Perfectionism for everything – High quality is standard

Germany is known for their cars, their technology, their educational system and universities, their perfectly structured health and social system and their well running industry. Germans tend to be perfect in all. Perfectly written contracts, perfectly set project schedules, perfection for products and services. They always respect red traffic lights, laws and rules. For many people Germany is the country of regulation. Never ever try to sell any product or service below expected quality – or your contract is cancelled faster than you can say Good Bye. If you got a milestone for a project you better stick with it. Remember that Germany is know for it’s high quality standards. For legal purposes you need to comply with many laws and regulations. ISO 9001 is established in many companies – even smaller ones.

Be cheaper than the rest – or most expensive

Germany is an import and export champion. It delivers high quality machinery and buys many goods from other countries. If you are dealing with fashion or electronics, Germany can be a very good market for you. But you need to know that Germans always keep their hand on their money. If you want to sell your goods you need to produce for very low costs. It depends on your market. If you are selling jewellerery you can do both: selling for a very low budget OR high end exclusive luxury. Yes, Germans always look in their wallet before buying but they are able to spend much if you convince them that they buy high qualiy.

Conclusion

Doing business with German business partners is different when you are coming from Africa or Asia. However, Germans love long term contracts and always pay in time. The German market is well structured and full with people willing to pay. Remember, that LIVERIX is here to help you to find business partners even in Germany. Ciao!