๐Ÿ‡ฉ๐Ÿ‡ช German Market

Premium
Expansion & Internationalization
Sign in to view filters and tags
This article offers essential insights for businesses planning to expand into the German market . It covers topics such as the business plan, market entry strategy and more.
Published/Updated on Oct 11, 2024

Preparing to Expand in Germany

By Startup Overseas

Preparing to Expand in Germany : Startup Overseas

Business Plan

Traditionally considered the key to success, a good business plan for the German market should never be underestimated. Encompassing your objectives, forecasts and routes, a plan should provide clarity on how you intend to take your business from paper to profit and expand a business in Germany. Ultimately, your business plan should be able to answer three questions:

  • What am I trying to achieve?

  • How am I going to achieve it?

  • When am I going to achieve it by?

Companies and advisers exist who can help formulate a business plan in German, taking you step-by-step through methodology and performance management.

Market Entry Strategy

Here are some basic tips for planning market entry:

  • Research the German market. Identifying the best potential customers, locations, sales leads and channels

  • Calculating rough sales volumes and your potential growth to expand a business to Germanyย 

  • Identifying the best distribution channels

  • Studying your competitors their products, services, distribution channels.

  • Deciding on specific entry points and niches

  • Having a good understanding of current and future political and economic climates

  • Calculating the initial cost and risk factor

  • Acknowledging your business's operational and logistical needs and contextualising them with your candidate country

  • Recognising the duties, regulations and other restraints if any to your operations

  • Undertake a market test to understand the viability, transferability and profitability of your product(s) or service(s)

  • Analyse the market. Will your marketing techniques, product image and its associations be transplantable?

  • Evaluate what help and funding may be available

  • Speak to distributors and producers about pricing and the market: its obstacles and opportunities

Competitor Analysis

The fundamental questions you will want to ask are :

  • Who are my competitors? Researching the potential German market.

  • What products and / or services do they offer?

  • How do they price their products and / or services?

  • What advantages do they have over you? What advantages do you have over them? And can these be overcome and maintained, respectively?

You may be interested in conducting a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis.

How to expand your business to Germany

By Open A European Company

How to expand your business to Germany | Open A European Company

Understand your business liabilities in Germany

Before you move, seek to gain a full understanding of the requirements and liabilities for German businesses:

  • mandatory minimum wage (17,976 EUR)

  • employee benefits

  • social security contributions (around 21% of an employeeโ€™s wage)

  • the various applicable taxes

  • A licence may also be required to undertake certain kinds of business. Many trades and crafts require a specific qualification or licence which you may have to study for.

  • If you are residing in Germany while running your business, you may also require a visa or permit

Choose your German company structure

While there are eight main company structures your German business can fall under, two are by far the most widely used:

  • the Limited liability company (GmbH) : requires a minimum capital investment of 25,000 EUR.

  • the provisional company with limited liability [UG] : forces your business to commit 25% of its profits to a statutory reserve. When this reaches 25,000 EUR, the company can be converted to a GmbH

Larger companies may incorporate as an AG, the equivalent of a corporation. This structure requires a minimum of one shareholder, but an elevated 50,000 EUR in initial capital.

Itโ€™s also imp