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Culture and Etiquette are Key to Doing Business in Europe

 

John Kielich, CPA - Managing Director for Kolb+Co. M&A Advisers   email | bio 
LeAnne Foster, CPA - Senior Associate for Kolb+Co. M&A Advisers   email
July 2011

Business is business no matter where it is done, right? While business may be business, how it gets done varies greatly from one country to the next. Kolb+Co. recently hosted a seminar on doing business in Europe as part of our Helping Your Business Grow seminar series. This seminar featured a presentation by Dale Elliott, CEO and founder of FCM Advisory Group, Ltd. and former CEO of Snap-On Incorporated and president of the plumbing division at American Standard. While at American Standard, Mr. Elliot was responsible for over 50 facilities in Europe. After Mr. Elliott's presentation three accounting firm shareholders from the United Kingdom, Germany and Italy shared with us how business gets done in each of their respective countries. These business professionals have not only been there and done it, but are still there and do it every day. The following are our favorite takeaways from the seminar:

• Remember that Europe is not one country. You would think that is an obvious statement, but many treat Europe as one country when engaging in business. There is a common currency, the Euro, used in many of the countries which has helped reduce the complexities of doing some commerce with the countries and between the countries. However outside of the currency, the countries within the European Union (EU) are very different. Each has its own language, culture, business practices, rules, customs, regulations and the list goes on. These differences are the things you need to be prepared to deal with. Simply because you are doing business successfully in Germany does not guarantee success in other countries. And, as our panelist from the UK pointed out, businesses in his country still use the pound sterling as their currency.
   
• There is a difference between an "international" company and a "global" company. There are many businesses that fall into the "international" category. Essentially these are U.S.-based companies that sell, or try to sell their product into foreign markets. There is no real attempt by the company to understand the markets and how the product will be accepted, and there are minimal, if any, changes to the product offering. The international company takes an opportunistic or "shotgun" approach. Conversely, a true "global" company will know the specific requirements for the market they are looking to sell into and will make changes to the product offering that will meet the needs of the market in which they are seeking to be successful. They make the resource and time commitment required. In the long term the global company will be more successful than the international company.
   
• Having a true EU presence versus using a local representative or agent is critical in doing business abroad. An EU-based national that is an employee of the company will have the best understanding of the culture, language and procedural issues of the country they are working in as well as the nuances of working with his or her company. The "local" knowledge of how things are done and the ability to process an order locally in the Euro will be a huge benefit.
   
• Not all countries, even if they are on the same continent, have the same daily regimens. On the lighter side, Mr. Elliott discussed what to be prepared for in a normal work day and provided a few examples that he has experienced. Germany is much like the Midwest - the day starts early and is on the same schedule for meals and meetings. In Spain, the workday usually starts at nine in the morning, but dinner starts no earlier than nine in the evening. Late nights in Spain are something you need to be prepared for. On the plus side, they also have siestas.
   
• Europe is open for business. Each panelist emphatically stated that their respective countries and Europe as a whole are welcoming foreign investment and do welcome companies from the United States. However, each of our panelists also put emphasis on the importance of having "local" expert representation when doing business in their countries. Echoing the comments made by Mr. Elliott the panel stressed the differences that exist in their countries for regulatory compliance that can only best be handled by a local and informed adviser.

Europe is a market that should be considered for growth. Having a sound plan and advice from those who have seen success and failure in Europe will best educate and prepare you for the effort it will take to do business internationally.

The panelists featured at the June 13, 2011, Kolb+Co. seminar, It's a Small World: Doing Business with our European Neighbors, are shareholders of firms that are independent members of IGAF Polaris of which Kolb+Co. is also a member.

Panelists:

• Ulrich Britting, Partner at Best Audit in Berlin, Germany
• Mark Worsey, Partner International Inbound Advisory & Assurance at Buzzacott in London, England
• Roberto Corciulo, Partner at Ardito-Cojutti-Corciulo-Graffi Brunoro-Zilli in Udine, Italy
• Mark Sobczak, Shareholder at Kolb+Co. in Wisconsin, United States

For more information on what was shared by the panelists at the seminar, please click here.

John Kielich | jkielich@KolbCo.com

LeAnne Foster | lfoster@KolbCo.com