5 Essential Tips to Use When Expanding Your Business into Germany

December 17 2020 - Has the time come where it makes sense for your company to expand into another market? Are all the signs there, you’ve done your research and tracking and come to realisation that this is the best step when moving forward? If so, you’ve got a very big question ahead of you, and that is where you should expand to.

For many business owners, the answer is Germany, as it has become a real force in Europe, carving out its own incredibly impressive reputation, especially in the manufacturing industry. But simply making the choice to expand to Germany isn’t enough to ensure success; there are a number of steps, tips, and considerations that you need to be aware of as you plan out the expansion. With that said, here are five essential tips designed to make expansion into Germany smoother.

Do Your Local Market Research before Expanding

The first tip is to make sure you have done complete and thorough research before you make the decision to expand into the German market. There is plenty to consider such as the local industry, competitors, what products you will make or offer, the local market, and so forth. All of this will help to determine if Germany is indeed the right place to expand into.

Even if all signs point to "yes", there still may be some steps or tweaks you need to make in order to make Germany an ideal location for the company. The last thing you want is to expand into a country that has no interest in your products/services, or cannot help the business to grow and move forward.

Consider Outsourcing the Hiring and Payroll Operations

Expansion is always a very involved and often laborious task. Any time you can find ways to make the process smoother and easier is usually welcomed. Outsourcing can do just that for you. Hiring in Germany can be tricky, especially when you don’t know the local labour market, the labour laws, and even payroll regulations.

New Horizons is a company that eliminates the confusion from the process of hiring in Germany. The whole idea is that New Horizons is able to navigate the waters when it comes to hiring your entire workforce, which includes such things as the communication style in the country, how to properly greet people in the workforce, local customs, they understand the level of respect shown in the workforce, and are fluent in just how important punctuality is. Having the inside track on how the process works allows New Horizons to find qualified and skilled staff easily and quickly, which will benefit your company in the long run.

Of course, there are also the legal aspects, which are such things as social security and tax contributions as well as employment contracts that need to be done to the letter. Again, something you can leave to New Horizons.

Outsourcing is meant to make things easier, smoother, more efficient, and productive, and it’s important to understand that outsourcing refers to more than just manufacturing - as just about anything can be outsourced.

Will You Manage from Afar? How Will You Feel Connected to the New Location?

As a business owner, there’s no doubt that you want to take an active role in your company’s success, its decisions, and its path forward. That can be difficult if you’re physically separated from the location. You have to ask yourself how you feel about managing from afar. How often will you go to visit your German location? Is this something that can operate without you there overseeing everything?

It’s best to have these answers already established before the location opens.

Be Aware of Germany's Strict and Plentiful Regulations

One thing that Germany is very well known for is its rather complicated system of regulations. For outsiders, it can all seem like a bit much, and be very difficult to understand. This is especially true for businesses who are exporting products into Germany. Everything needs to be in compliance with the ISO (International) standards, the European standards (EN), and the national DIN law.

For an outsider looking in, it can be easy to write off Germany as "too strict" when it comes to regulations, but this is what helps to give it such a strong reputation in the world for top-notch products and industries. It shouldn’t act as a deterrent but you will need to become familiar with it all.

Embrace E-Commerce in the German Marketplace

Finally, there is the popularity of e-commerce. This isn't unique to Germany; rather, it is a trend that is happening all around the world. Knowing that in advance will help you to take advantage of e-commerce opportunities and ensure that your company is poised for success.

Making a Smart and Calculated Expansion into Germany

At the end of the day, the success of your expansion truly depends on how well prepared you are, and how much you have learned about the strong and robust German marketplace.

• More HR Articles