They’ve got the world at their fingertips
Businesswomen Anne Koark and Uschi Plötz are the toast of Bavaria. The two help foreign subsidiaries set up shop in the state and their success has everybody talking
The success story of Anne Koark and Uschi Plötz has all the trappings of a fairytale and it has won them the admiration and thanks of Bavaria’s economic and business leaders. Two years ago the talk was of the euro currency’s arrival on Jan. 1, 2002, and how its introduction could spur foreign companies to set up shop in Europe.
The thought of how that might develop encouraged the two women to pack in their jobs and set themselves up in a Bavarian farmhouse to help British and North American companies establish themselves in the European Union.
„Everyone laughed for two reasons,“ said Ms. Koark. „Number one was that it was two women doing it and number two, many thought that it was impossible to move the service aspect in Germany for foreign companies. But nobody’s laughing now.“ The two named their company Trust in Business (TiB) and it soon outgrew the farmhouse. The office now occupies 8,000 square metres of office space on the fringe of Munich airport. The company has 15 employees – all women – and a slew of international clients. British companies led the charge for TiB’s help, so did the French, the Americans and even a few Canadians.
How successful is TiB? It won Germany’s 2000 Breakeven Entrepreneurial Award and Ms. Koark and Ms. Plötz are in demand to explain to the media and economic groups how they succeeded so fast. What the two tell them is that they saw the need to reconstruct Germany’s service industry to meet the demands of foreign companies.
„Germans tend very often to say, ’Listen I’m a bookkeeper, I don’t do marketing. You want marketing? Find yourself a marketer, I know nothing about it,’“ said Ms. Koark, a 38-year-old English-born mother of two. „The big problem with that is, if you move onto a market that you don’t know, you’re not aware of how the market moves, you’ve got no possibility of assessing whether the partner that you’re dealing with is a good partner or not. „Often, companies set up their foreign subsidiaries with one or two people whose main aim, and it’s completely correct to work this way, is to bring up sales as quickly as possible to make the whole thing worthwhile. „But we’d seen how people had been treated and we’ve seen people pay six times the cost for renting out space, for example, which is absolutely ridiculous.“
A key indicator for TiB’s founders was that the foreign arrivals had a much higher success rate than that of newly formed German companies. The statistics showed that of all liquidations, only five per cent involved a foreign subsidiary, said Ms. Koark.
TiB had its Internet page in place within 24 hours of opening and within 48 it had two customers from Silicon Valley. There has been a steady flow of companies since then, all with an aim of setting up base in Bavaria. And the reasons for contacting TiB are numerous.
Some want to know more about the market, others want a contact for tax advice and legal issues. „We have some companies that have already made the decision that they’re coming over and want to know about pricing, want advice about what they have to look at before they move on to the market,“ said Ms. Koark.
„Others have passed that stage and are in the process of opening up a subsidiary and want fully equipped office service space – which we have – or they want a domicile address to start legal proceedings to open an entity here. And we have companies that have already opened the legal entity but have no employees and ask us to assist them in starting up; ask us to become their administrative centre so that they can save heads in the growth phase and use local staff whilst they’re building up their local operation.“
Foreign companies are moving onto the German market, said Ms. Koark, because they’ve seen that it works and they’re finally understanding how important it is to increase their profits worldwide. In the process, German companies are changing their old, established ways.
„Although we’ve only been in business for two years, everybody is contacting us and asking us for advice on how to deal with foreign companies and how to polish up their service for foreign companies,“ said Ms. Koark. TiB’s first order of business was to form partnerships with 40 of Germany’s leading corporations. One of them is telecommunication giant Deutsche Telekom.
TiB needed guarantees that if it was representing a client, it could deliver what it promised. „That’s where the trust comes in,“ said Ms. Koark. „We went into negotiations with Deutsche Telekom on how they could change their internal structure to speed up the process of getting telephones for people going into office space. When a client grows out of our office service we search for office space for them and it’s not acceptable for a company to wait for a telephone, because a telephone is business.“
„It was the case, for instance, where the banks could take up to six months to open a company account. We went to the banks, in fact we went to all of our partners and said, ’This is what we’re doing, how can we work together in the interests of the customer so that the customer is happy and we both look good?“
The approach worked. „Now we have strong cooperation with German businesses willing to support the efforts of companies that want to come over. That wasn’t always the case,“ said Ms. Koark. „It’s taken a few years of mentality change but now the market is really open for business and the strong connections that can be built, should be built at the right time.“
The Canadian presence is the only downer to what, so far, has been a remarkable success story. American companies represent 50 per cent of TiB’s business. European companies account for about 30 per cent of it. „The Canadian companies are a very, very small percentage and we find that hard to understand,“ Ms. Koark said. She is puzzled for several reasons. Bavaria is a high-tech mecca – it was described as such by Microsoft chairman Bill Gates – and its location, 4½ hours drive from Venice, 1½ hours from Salzburg means you can visit three countries in one day.
Canada is a high-tech leader and one would have thought that the euro’s arrival would have spurred Canadian companies to make a move across the Atlantic. Could it be that Canadian companies are an overly cautious lot?
„Well, that’s what some people say, but they’re also well known for their quality products and so is Germany, so that’s something else that unites both countries,“ said Ms. Koark. „There’s a great affinity between the Germans and Canadians. If you ask Germans where they would go to live about 70 per cent would say North America and most of them would say Canada because of the way of life. It’s got more solidity to it.“
Ms. Koark said the high-tech market in Bavaria is experiencing rapid growth and while it’s considered to be a little behind North America’s, it’s the right time to feel it out before it becomes saturated.
„We have a very good relationship with the Canadian consulate and Cliff Singleton, the commercial officer, and that office does a lot for Canadian companies coming over. It’s not that we can do more than them. It’s a team effort. They can give people advice and point them in different directions, but they can’t support. We can.“
Ms. Koark does not consider that Canada’s Old Country ties with Britain should prevent Canadian companies exploring the German market.
„The only advantage to being British-based is the language,“ she said. „But Britain has opted not to adopt the euro and the lion’s share of the European market lies in Continental Europe. If you want to be in the main market, having a euro presence is a must. And the language difficulties are not as large as they seem. German children learn English at a very young age and most Germans speak English. The fear of moving onto the market decreases when you have dealings with the Germans. They’re prepared to speak your language.“
Ms. Koark said the first advice she would give a Canadian company considering opening a subsidiary in Germany would be to do so with as little investment as necessary. „The idea is not to splurge money for the sake of it,“ she said. „That does not guarantee success.“
„The next bit of advice is to check the intellectual property rights for Germany – the trademarks and patents – to make sure that when they start investing in the market there are no restrictions on the name they’re using. If there is they’d lose their market investment by having to change the name. (The German patent office is in Munich and TiB’s patent partner is an English-speaking internationally experienced attorney.)
The biggest saving a company can make with TiB is with its office space. A five-year lease is the norm in Germany, but TiB offers office space with no lease and three-months’ notice if things don’t work out.
„It’s an open-ended contract,“ said Ms. Koark. „They can stay as long as they like. They have the official feeling of an office because they have their own sign outside and they have an official address, which is important for the German market because Germans do not like dealing with companies that do not have an address in Germany. And it’s very, very low cost. It’s no investment for furniture, no investment for office equipment and it’s got a three-month deadline on it. If it doesn’t work they can move out.“
TiB’s services include the startup operation, accounting, marketing, Web site and design, personnel, intercultural training, translation and all the facilities of a fully equipped office.
„Our staff have degrees in human resources, business administration, accountancy, bookkeeping, translating … we have specialists in every area. It’s typically German not to learn universalism. If you’re a bookkeeper you don’t do relocation; if you specialize in relocation laws, you do just that.
„We inter-train internally because we are of the belief that if the employees understand the big problem, if they get an overview of the whole situation, they understand the customers better.“
One of TiB’s Munich-based partners is Canadian attorney Sylvia Jacob, who specializes in corporate commercial law, startups and acquisitions.
Ms. Koark said that she and Ms. Plötz knew that the market for their services existed, nonetheless they were surprised by how quickly TiB found acceptance and how big the market really was.
„It took off like a rocket,“ said Ms. Koark. „We went from two staff to 15. The company grew at that speed. Everyone was recommending us … the biggest chartered accountancy companies and consulting companies in the world, including Ernst & Young, PriceWaterhouse and KPMG.
„It’s working so well that the media and the economic-powers-that-be are sitting up and taking notice. I have spoken to the Munich Economic Society on internationalism in Germany and how to make the companies here understand that although they are in the German market, this market is international. And it’s a learning process that is working very, very well.
„We say we’re opening the doors to Bavaria for foreign companies. We don’t want to change the quality of the service that people get but we want to change the way that they deal with things.
„German companies understand that if they get a call from an international corporation at 4 o’clock and are told there is an urgent problem, it is not acceptable for them to drop their pencil at 5 o’clock and say, well, sorry, business is over.
„Foreign companies need flexibility. They also need reliability and they need someone to follow through on their interests so that they can build up efficiently, quickly and at a cost that is as low as possible.
„And we’ve changed many things, inasmuch as many companies are prepared to go without a long-term commitment to let investors explore the market here. The major point we emphasize at TiB,“ said Ms. Koark, is trust and that’s what TiB is here to provide. The best advice that I can give to someone wanting to expand, is that a well-informed move with partners you can trust, and who have flexibility supporting you, is not a dangerous move.“
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