Selling to Germany seems to be one of mankind's biggest mysteries. We often hear from companies that want to sell into Germany: "We are talking to our legal advisor about setting up a GmbH (Ltd.) in Germany to be able to work the DACH market."
Let's debunk some of the myths here.
Do you need a legal entity in Germany?
No, you don't need to create a GmbH (Ltd.) in Germany to sell into DACH.
At a later stage, when you have successfully tested the market and your sales playbook, you might want to consider setting up a GmbH for tax and employment reasons. But this decision is not related to business development and sales.
Direct sales or indirect sales?
Sales partners (VARs) are good at selling their "value-add" but are generally bad at identifying how to sell your stuff. In other words: if you don't have a proven sales playbook for a VAR (including value prop, differentiators, local references), it is very unlikely that they will develop this on their own.
Usually this means you have to get your first end customers in Germany with direct sales to develop and validate your German sales playbook. Here is more context on the pros and cons of indirect sales.
What should your first Country Manager look like?
What role are you looking for in your first employee in Germany? A managing director? A senior sales director? A seasoned account executive? A motivated (young) lead generation person? An experienced inside sales anchor? A channel/partner manager?
You might wish for an all-in-one candidate but honestly, this doesn't exist. If you haven't validated the market and your local sales playbook, you should aim for an account executive supported by a lead generation service (internally from HQ or from a local lead generation agency). All other roles will not generate your first revenues in Germany.
Related reading: German expansion: who should be your first employee?
Freelance or employment?
Our experience is that in enterprise sales (long and complex sales cycles), it takes about 12 months to find out if your new sales hire was a good choice. Additionally, the labor law in Germany is very "employee friendly" and makes it hard to lay off people.
One more thing: very good salespeople don't need to apply to job ads. What do you have as a company to attract these calibers?
Typically not the best set-up for entering a new market, right?
Instead, there is a talent pool of highly specialized (by industry, domain, etc.) sales freelancers available in Germany that might be a more lean and agile approach for entering the German market. They know the German market specifics, act local, and speak the German language. Let them start doing the business while you can spend more time on the recruitment process of finding your ideal first employee.
We are happy to introduce you to a few freelance sales experts we know.
How important is the German language?
If the use case is Germany, DACH, or German-speaking customers, then German-language communication is non-negotiable. German decision-makers expect to be approached in their language, especially in the Mittelstand. English-only outreach will drop your reply rate dramatically.