How a web studio from Russia takes the first steps in opening a representative office in Germany (part 1 - theoretical)
“But can we open a WebCanape representative office in Europe?” Asked Marina, a friend of mine who has been living in Germany for more than 6 years. Why not? We have been working in the market for developing websites for small businesses for more than 5 years and have already made websites for countries in Europe, Australia, the USA, etc. In Europe, similar services cost 3-4 times more. Sin does not try. We made a decision and went on this "journey."
Marina took on the role of unit manager. The product and production technology were worked out, it remained only to localize under the German market and begin sales. But it was not so simple.
The easiest thing is to open a company
We select the form of ownership, determine the form of taxation, draw up a business plan. To make sure that everything is provided correctly, we turn to consultants or specialized companies. A tax consultant agrees on a business plan, and a lawyer prepares a package of necessary documents. After that, a notary public registers the company. Next, open a bank account - and you can work. The whole process took about 4 weeks in terms of duration, and about 2000 euros in costs.
It is worth noting that knowledge of the language and the presence of a local partner can significantly save and speed up the process. There is also the opportunity to receive a subsidy for starting a business, which we did. I will sign the registration process in detail in the next post, if there is interest.
The reality was that we intentionally did not plan or invent anything. We did not set specific goals. We just got an opportunity, and we took advantage of it. Difficulties began further.
That is why it is better to follow them. Repeated rumors that you can grab fines without having time to earn your first money, plus Marina’s persistence forced us to turn to a lawyer for advice (which is completely atypical for a Russian entrepreneur). The lawyer checked our site for compliance with German standards and made a number of useful comments that we now use in our practice for our clients' sites.
The Buy button, for example, is not just a button. It assumes a legal relationship between the business owner and the site visitor. Therefore, at least next to this button should be a link to AGB (working conditions) and the visitor must agree to these rules. Therefore, on information sites such as ours, where the client first makes a request, receives a CP and only then makes a decision about work, it is better to set the "Request Information" or "Get CP" buttons, etc.
Compliance with these and other rules is closely monitored by the relevant organizations. To insure yourself, it is better to pay once to a lawyer who will check everything and will be responsible. So we did, especially since the happiness of getting a German client was already close, but ...
In Europe, compared with Russia, urban business infrastructure is changing much more slowly. On our last trip to Europe, we stopped in Maastricht (a small town in the south of the Netherlands). After 5 years from the last visit, practically nothing has changed in his business infrastructure. The same shops, hairdressers, car services and even sellers. At the same time, in Smolensk (our hometown), three different organizations can be replaced in one room in a year. Someone is growing fast, someone is closing quickly.
In Russia, it is vitally important for a small and micro-business to have a website, as a large turnover forces it to constantly inform about its existence. And for a small business in Europe, which operates within a street or block and whose customer flow is limited by its own productivity, a site is not needed at all. Rather, they point to a point on Google maps and a Facebook page for tourists and residents from other areas. For them, this is a simple and inexpensive way to integrate into a common information space. The content of the site in Europe is a very significant cost (the cost of an expert’s hour is 80-120 euros), which should be justified. For small businesses in Europe, the presence of a site becomes relevant if the organization operates on an external market or creates network companies.
Simple copying of the Russian model in the field of developing budget sites in Europe does not work. It is necessary to think, more accurately choose a market segment.
Distrust of Russians in practice
Russians in Europe are not trusted, however, as are Indians and Chinese. When negotiating with German companies, it is felt that the Russian roots of WebCanape cause distrust, despite the fact that we offer lower cost of services, high speed with similar quality. There are even those who, with the word “Russia,” do not want to continue the dialogue (this is even before the events in Ukraine). It is worth putting a lot of effort to convince a German entrepreneur to work with us.
Today, the majority of WebCanape DE customers are Russian-speaking Europeans. There are, of course, purely German customers, but so far there are only a few. To get access to the market in full, we have a lot of work to do, but for now we are reviewing the business plan and fighting for our reputation.
New Market - New Product
Before the official entry into the German market, we conducted a small survey about associations with Germans with our name. It turned out that the word “Canape” among the Germans is more associated with a sofa than with a dish familiar to a Russian person (canapes). In general, the sofa is a pleasant thing for the Germans, so they did not change the name. :)
Well, if you have to change only the name. In our case, due to the development of the German market, a product modification was also required. We realized that part of the functionality of sites is not in demand and that for part of the market the service of developing a site is not in demand. Life made me think how we can be useful in the European market.
We focused on services for European business operating in the foreign market (Russian in particular). Having good experience in the Russian market, we can be useful in creating the site of a European company, adapted for a Russian-speaking audience, and are able to ensure its promotion on the Internet. At the same time, our German representative office allows us to overcome the barrier of the unwillingness of Europeans to have legal relations with a Russian company. We are taking steps in this direction.
Today we clearly see the difference in markets and understand that it is necessary to change for successful work in Europe. This is how to master a foreign language: until you know it, you do not see part of the world and its capabilities. We are at the beginning of the journey and will be happy to hear about your experience. We will need it very much. If you have any questions, we will be happy to answer them.
Vasily Churanov and WebCanape RU and DE team