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Opportunities for SMEs and entrepreneurs in Germany

E-commerce · 10 min read

Doing Business in Germany

They are famously efficient, but what really makes the German economy tick? Where are the opportunities for new business in the world’s fourth largest economy?

With a GDP increase of 2%, inflation at 1.56% and an unemployment rate currently standing at 3.6% for 2017, Europe’s largest economy is an attractive place to do business. Other than a reputation for exceptional engineering capability and being punctual, what else is there to say about Europe’s largest consumer market? As ever, understanding the business culture and landscape is essential to success. 

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Expert planning

German culture prizes forward thinking and knowing exactly what is happening and when, particularly in business. The German thought process is extremely thorough – each aspect of a project will be examined in great detail. Working is defined and regulated by structure. Germans believe that following clear lines of demarcation between people and places helps maintain structure and order. In business culture, this is reflected in their adherence to prescribed business rules. This can sometimes result in a lack of flexibility and spontaneity with regards to attitudes and values. 

No alarms and no surprises  

Sudden changes in business dealings and transactions – even for an improved outcome – are unwelcome. Business is taken seriously. Humor tends not to be appreciated in typical German business and there is no expectation or need for compliments. 

Time is of the essence

Germans are most comfortable when they can organize and compartmentalize their world into controllable units. Time, therefore, is managed carefully. Calendars, schedules and agendas must be respected. Trains arrive and leave on time to the minute, projects are carefully scheduled, and organization charts are meticulously detailed. Do not turn up late for an appointment or when meeting people, even a few extra minutes delay can offend. If you are going to be even slightly late, call ahead and explain your situation. 

Divide and conquer

Work and personal lives are rigidly divided. Germans subscribe to the ideal that there is a proper time and place for every activity. 

Business etiquette

This is of huge importance. Germany is a nation that is strongly individualistic, and one that demands high standards of respect. Unethical behavior will seriously diminish all future business negotiations. 

"Germans take great pride in dressing well, regardless of where they are going or what position they hold. Appearance and presentation is very important to Germans, particularly with regard to business."

It’s all in the name

Titles are very important to Germans. Do your best to address people by their full, correct title, no matter how extraordinarily long that title may seem to foreigners. This is also true when addressing a letter. First names are reserved for family members and close friends. In business, until you know otherwise, or have developed a personal relationship, it is very important to refer to your German colleague with his or her title (respectively, Herr and Frau for Mr. and Mrs.) plus the last name. Do not use the first name until you have established a friendship. If someone is introduced to you with an additional title, e.g., Dr., use it. This is a formal culture until people get to know each other. 

Just as important as knowing your counterpart is understanding the numbers behind them. Our downloadable PDF contains in-depth insight and analysis to help you make the most of cross border trading with the world’s fourth largest economy. 

Country Guide: Germany

Want to know how to do business in Germany? Read our fact sheet now!

 Country Guide: Germany

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"A man who dares to waste one hour of time has not discovered the value of life."

Charles Darwin, Biologist