“It’s bureaucratic madness that hits business owners. I have respect for anyone who gets through this.“
05 June 2019Serving Customers - Serving Voters: Entrepreneur & Politician
Olav Gutting is a member of the Bundestag for the CDU and also represents the rights of small companies as a lawyer. By chance, the fiscal expert himself once ventured into the restaurant business. We spoke to him about what he finds fascinating in family-owned businesses and how politics is responding to their challenges.
As a lawyer, you aren’t just a business owner yourself. You primarily represent the rights of small and medium-sized enterprises. Where does this focus come from?
My own background is in the middle class, a family business. My mother was the second-generation owner of a hairdressing business. That’s where I went after school, I spent my day at the hair salon. I was also part of the business: sweeping up the hair, cleaning the curlers. That’s why I got to know life in a family business from the ground up. My father has had a business as a tax advisor since 1980. His focus has always been on small and medium-sized enterprises. Hence my closeness. I like working with small organisations and personal contacts. One experiences that the well-being or otherwise of the company depends on the personality of the business owner. The whole family pulls together. That’s my thing.
Which legal issues do SMEs face the most? For what reasons do SME representatives turn to you most often?
In my office we mainly serve medium-sized and family businesses. As a lawyer, I’m first and foremost a consultant. Usually this is a “lifetime mandate”: It begins with supporting the companies, with their establishment and ends with their liquidation, with company succession, with arrangements when the managing director or the owner dies. The main focus is on questions of company and contractual law, but we also handle cases of a managing director jumping a red light. Or his daughter is getting a divorce. You are the one to turn to for everything. You live with the family of the business owner, so to speak.
You once invested in the restaurant business. How did that come about?
(Laughs) That was an adventure. It actually is the wish of many people who enjoy good food to run their own restaurant, which they can then set up as they have always wanted. My involvement was a coincidence. I happened to come across a property that once had a restaurant and at the same time I met a chef who had to leave his former restaurant. After a few glasses of wine one night, we said: “Come on, let’s do it together.” We started with great verve and enthusiasm. After a while, however, I realised that I couldn’t really take care of it and give input because my time simply didn’t allow it. If you’re not always actively involved in something like this, make adjustments, always check that everything is in order, then nothing happens. After a year, I withdrew.
As a lawyer, you live with the family of the business owner, so to speak.
As a former restaurateur you also know the challenges of the business. What was your takeaway from that time?
It all started with the permits to run the restaurant. In the location I was involved in, there had been a restaurant before. However, it had been shut down. Once the permit is gone, you have to start all over again. There are building regulations and the new standards must be observed. There is also ventilation, fire protection and toilet facilities. All of that costs money. The procedures also take time. You have to follow up constantly – at the town hall, with the authorities. You don't have just one contact person, you have to deal with many different ones at the same time. It’s bureaucratic madness that hits you. I have respect for anyone who gets through this.
Based on your experiences: What difficulties do restaurateurs face?
The biggest challenge is of course to earn money with a business like that, so that you can make a decent living from it. Costs are constantly rising – energy costs as well as permit and insurance costs – but the market only accepts higher prices to a limited extent. It is a challenge to make ends meet with such a business. Many restaurateurs are also burdened with the issue of staff, both for the kitchen and for service. It is incredibly difficult to find good people who are willing to do this job, which is not always easy, and on top at salaries that do not make everyone scream “woohoo”. This pressure is reinforced by issues such as minimum wages and record-keeping obligations. So, it’s red tape combined with economic pressure and a lack of qualified staff. That’s a problem for many.
My time as a restaurateur was an adventure.
Talking about staff shortages, would you say that politics can change that?
No, we can’t magically conjure up children. I always say: “Money doesn’t score goals.” And that’s exactly how it is in politics. Even with further benefits in family policy, we cannot reverse demographic trends. The fact that we have fewer and fewer young people in this country, that is unfortunately something that is affecting all industries. The competition for the best minds is in full swing. This is true for the skilled trades, this is true for industry, this is also true for the government. Even at the Federal Armed Forces and the police, the topic of recruiting new talent is always at the top of the agenda. I can see it here in Heidelberg: We have a really great culinary school. The classes are getting smaller from year to year, although the training is excellent and the opportunities it offers are also fantastic internationally. Many also go abroad because it is more attractive there. Of course these people are missing here in Germany. But I think one should not create the illusion that politics could easily reverse this development. We can help by offering qualifications. We can help by appropriately charting the course in terms of immigration. And that is what we are doing. We now have a migration law for skilled workers in the pipeline that helps in this area. But you can’t expect too much from it.
Olav Gutting, Member of the Bundestag; © Jördis Zähring
Olav Gutting with star chef Tim Raue at Politik@Herd in May 2019 / Berlin; © Jördis Zähring
You are constantly moving between Berlin and the surrounding area of Karlsruhe. Do you see differences in the challenges faced by SMEs in urban and rural areas?
Yes, definitely. It all starts with the issue of transport infrastructure. But broadband is also a very important topic. We cannot place industry in rural areas without offering a decent infrastructure of fibre optic networks. In addition, there is the lack of attractiveness of rural regions for some citizens. Many young people want to move to the city, despite increased housing costs. You have to see how you can maintain the attractiveness of the rural region. I know of a large restaurant in the area that builds its own apartments and then rents them out to its employees. Stylish apartments in a great neighbourhood – simply as an extra incentive to attract good staff. You don’t usually need something like that in the city. Politicians are committed to preserving rural areas. For example in the health sector, where we are improving the availability of rural doctors and pharmacies. This is what usually happens: First the baker dies, then the butcher dies. Then the doctor leaves and then the last restaurant closes. And then areas become deserted. We have to counteract this.
What was the decisive impulse for you to get involved in politics?
This also has something to do with food. I sat at lunch with my parents and complained about the situation at that time, 2001 in Germany. We were at the bottom of the European rankings: At the bottom of the pack in terms of wages, we had mass unemployment, strongly rising national debt. I continued to rant at the lunch table until my dad said: “Why don’t you do it yourself?” That was the impulse for me to say: “Actually, he’s right.” You can’t just complain all the time. If you think you can do things better, you also have to meet the challenge. I put myself forward for the Bundestag mandate, was nominated by the party and elected to the Bundestag a year later. It was a spontaneous decision. Especially since I had hardly been politically active before. Except for a short time in the local Young Union – mainly because of their summer camp at the lake. My cousin used to be the chairman. So that was more of a “family business”.
Olav Gutting, Member of the Bundestag; © Jördis Zähring
Red tape combined with economic pressure and a lack of qualified staff. That’s a problem for many.
You know both the day-to-day business of a company – through your own work as a lawyer and through businesses in the constituency – as well as the political arena. Do you see yourself as a mediator between worlds?
Yes, in two respects: As a member of parliament you are a messenger of problems and sentiments from the constituency to Berlin. You’re on the move here, you feel people’s pulse, you connect with them and what you absorb here, you carry with you to Berlin. And it’s the same the other way around. It is also our task to explain the policies we adopt in Berlin on the ground in the constituency. Unfortunately, we don’t always succeed.
What experience do you bring to politics from your profession as a lawyer and business owner?
As a self-employed professional you know that there is no 35-hour working week. That’s the first thing you have to sacrifice. I’ve known that since I was a kid. The customer is king. Everything is secondary to the business. The fact that you can’t expect an 8-hour working day also applies to politics. In addition, the Bundestag mandate is also a free mandate. You have no instructions to follow – so the mandate is very similar to being self-employed. If you already know what that’s like, that’s helpful. For me as a lawyer it is an advantage to have worked with laws before and to have learnt the structure of the state, state law and legislation during my studies. I can bring impulses from the firm with me to Berlin and, when making decisions in Berlin, I can always practically imagine what effects this law will have.
When you draw a comparison between what you do in politics and what you and your clients do in business: Is it the same traits that make politicians and entrepreneurs successful?
That can be answered quite clearly with “no”. One can also tell from the fact that many business people who go into politics fail sooner or later. There are always exceptions, but we rarely find a real business owner in politics. This also has to do with the fact that, as a successful business owner, I don't have time to also dedicate myself to politics. You can’t just say: “I’ll go into politics for a few years and hand over my business to a third-party manager.” That’s also a risk. As a business owner, you are used to making decisions on your own and to implementing them immediately. In politics, you first have to learn how to make compromises and that democratic processes sometimes grind very slowly.
The fact that we have fewer and fewer young people in this country, that is unfortunately something that is affecting all industries. The competition for the best minds is in full swing.
What would change if more members of the Bundestag were independent business owners?
I think processes would become more time-efficient. That’s what drives me nuts sometimes: the inefficiency and the duration of legislative procedures. In terms of digitisation, external impulses would be good, too: We promote digitisation, yet we still walk around with stacks of paper. Nevertheless, I believe that politics and business cannot be compared. You can’t run a country like a company and completely streamline it towards efficiency.
After 17 years as a member of the Bundestag, can you imagine a life without politics and with full focus on your business?
Yes, and it’s important to me that I always can. That is why I consciously take on this double burden – as a lawyer and politician. For me, it is freedom to be able to decide at any time not to continue in politics. For me, it is clear: Politics is a temporary mandate. A contract is concluded with the voters for four years in the Bundestag. After that, the voters decide anew. Their trust must be earned again and again. No member of parliament should believe that he will remain a politician for eternity. That is why it is important to be able to return to the ranks and resume one’s civic profession at any time – without this becoming a personal catastrophe. Otherwise one becomes dependent on the party and on politics. That’s not good for any of us. It should be important for politicians to maintain professional qualifications alongside the political mandate.
As a business owner, you are used to making decisions on your own and to implementing them immediately. In politics, you first have to learn that democratic processes sometimes grind very slowly.