Why should you join a startup?
The dream of owning a company: It is particularly alive in the younger generation. Of the 18 to 39 year olds, 46 percent can almost every second thinks about starting a company. And it seems to be paying off: Despite a high workload averaging 56 hours per week, founders show above-average life and work satisfaction.
But there are also downsides: 30 percent of founders have already ended their activities again within the first three years. In addition to personal reasons, a lack of profitability plays a decisive role.
Proper preparation is crucial to prevent such an outcome. That's why we're giving you a detailed plan here to help you Successfully convert your business idea into a corporate concept and all important steps on the way to own company can go.
What do you need to start a business?
- A viable one Business idea, which can be converted into a corporate concept, forms the basis for the foundation.
- Industry experience helps to better assess the opportunities and challenges.
- Own Seed capital facilitates independent founding
- If there is no or too little start-up capital, you have to think about the financing.
- Start-up loans, crowdfunding or the integration of Investors are available as options.
- Reserves serve to bridge the first few months in which most companies are not yet making a profit.
- Willingness to work is essential in order to cope with the high workload, which in the beginning often goes beyond full-time employment.
- A Feeling for numbers makes it easier for you to make calculations and check the business model for profitability.
- Willingness to take risks is indispensable because no matter how good the planning, there is no guarantee of success.
Starting a company: planning
Which requirements facilitate the establishment?
- Experience in the branch: Anyone who has worked as an employee in the relevant industry for a longer period of time is very likely to have a deeper understanding of the opportunities and risks of the business area. In the course of your day-to-day work, you will ultimately be more directly aware of the specifics and common pitfalls of the industry than as an outsider.
- Start-up capital: In principle, it is of course also possible to set up a company largely without equity (more on this below). However, it makes the project much easier if you are not dependent on external investors or credit institutions, to whom you owe account and interest and to whom you may have to give a say in company decisions.
- Reserves: There is hardly a company that makes a profit immediately after it is founded. And even if this is the case, it often makes sense to reinvest it instead of paying yourself a salary as the founder. However, this also means that (if you are setting up a full-time business) you initially have no income. This makes it all the more important to have reserves that pay rent and livelihood in the first few months after founding the company.
- Willingness to work: "To be self-employed means yourself and constantly to work." There is a lot to this saying. With 56 hours of average weekly working time, there is much more working time than in a typical full-time job. Especially in the initial phase, the nine-to-five working day is often a long way off.
- A feeling for numbers: A certain mathematical understanding is an advantage as a founder. Because even if you can get help from tax advisors and co., It simplifies planning enormously if you can calculate your project yourself to a certain extent and check its profitability.
- Willingness to take risks: Even with the best of planning, there is still a certain residual risk with every start-up. There is no guarantee of success and personal economic improvement. So if you are not prepared to accept setbacks and possibly the failure of the project, you should refrain from starting the idea.
Setting up a part-time or full-time job?
First of all, you should decide whether you want to dedicate yourself to your start-up project full-time or alongside regular employment. Both options have different advantages and disadvantages:
The main advantage of founding a part-time business lies in the minimized risk. After all, you will still receive a regular salary and, in the worst case, will not be without an income. In addition, part-time start-ups are particularly often included in the Small business regulation. This applies to companies with a previous year's turnover of a maximum of 17,500 euros and a planned turnover of no more than 50,000 euros. They benefit from a simplified sales tax regulation, which relieves the bookkeeping. So it's no wonder that, according to the German Startup Monitor, over half of the startups in recent years have been part-time.
The price for the added security, however, is a tighter corset of requirements. A part-time job is only considered part-time as long as it is Does not exceed working hours and income from main occupation. Hiring an employee can also mean that your self-employment is no longer considered part-time. You also need your employer inform about the project, who can veto them if your start-up project could compete with them. Also corresponding clauses in the employment contract can stand in the way of part-time self-employment.
Please also note that also for starting a sideline Taxes due are. This applies to both taxes and social security. Because for these, higher contributions are due with the increasing income.
Full-time business establishment
Anyone who founds a full-time job can do theirs total time and energy stuck in self-employment. The increases the likelihood of success. At the same time, you may take your project a lot more seriously if it is really “about something”. The pressure from one hundred percent commitment can also inspire you.
The downside, however, is that lack of safety net. There is a lot at stake when starting a full-time business: Either your company succeeds - or you are left with no income at all. This not only increases the actual (financial) risk, but the pressure can also have a paralyzing effect and steal motivation.
Starting a company without equity
Ideally, you bring your own savings with you for the start-up project. But even if your financial situation does not allow this or your own funds have been used up, there are various options for financing your future company:
Start-up loan and funding
Various Promotional institutes such as KfW (Kreditanstalt für Wiederaufbau) offer loans especially for start-ups, for which the repayment is only due after several years, for example, if the company has a good chance of generating a profit.
In some cases, there are also grants that do not have to be repaid at all. This includes, for example EXIST grant of the Federal Ministry for Economic Affairs and Energy, which supports start-up projects in technology, science and research. Recipients of unemployment benefit can from Start-up grant benefit if you become self-employed and in this way end your unemployment.
Especially if you want to implement innovative ideas as a start-up and the capital requirement is not too high, crowdfunding offers an alternative to conventional financing models. Here you can Fund individuals in your company through various platforms. In return, depending on the model, they receive either the future product for free, a repayment or shares in the company.
Crowdfunding is also so attractive because it is so cheap. Only a small commission has to be paid for creating the project. The downside: it does All-or-nothing principle. If the funding goal is not achieved, all the money collected will flow back to the donors.
Investors are the third option to start up without equity. Private investors usually only participate financially and either act as silent partners or provide an interest-bearing loan. As a rule, however, you will not generate more than 25,000 euros in this way. Business angels on the other hand not only bring capital, but also their own know-how and network as business people. In return, however, they usually also demand higher company shares and a say in company decisions. The investment amount here is on average 50,000 to 250,000 euros.
For even higher investments are Venture capital companies the right contact point. As a rule, however, you do not invest in the early phase of the foundation, but when the proof-of-concept has been provided and the company has proven to be scalable. The investment here can easily amount to several million.
But regardless of which form of investment you are considering: it always starts with Well thought-out company or idea presentation, for example in the form of an elevator pitch, with which you have to convince the investors of the success of your company.
Starting your own business: how to proceed
So that you can get from the idea to the registered company stumbling-free, you will find an overview of the individual steps involved in setting up a company.
1. Develop a business idea
The basis for your own company is of course a fundamental business idea. However, this still has to be specified to the extent that it can be converted into a Business model can be convicted. Suppose you want to develop your own lemonade. Then you should not only think about what exactly should distinguish this lemonade and set it apart from others, but also how you want to sell it. Are you just planning production? Or do you want to open your own café where the lemonade is sold exclusively?
Depending on the situation, you not only have to adhere to very different legal requirements, but also address other customers, as you are selling directly to the end consumer (B2C) or to a retailer (B2B).
If the business model is in place, it must be a Corporate concept become. The creation of a business plan, which should show that the business model is economically viable, helps here. This includes, for example, the following aspects:
- What is the product?
- What sets it apart from comparable offers / Why should customers buy this product of all things?
- Where do you get the product / raw materials?
- How do you market and distribute the product?
- How do you define your profit and what are the main costs?
In addition to the strategic orientation of your own company, the competition in the market should also be considered. The Ocean strategy or the PEST analysis.
You should also think about the structure of your company: Do you want to set up a business alone or with a co-founder? Are you planning to hire employees in the near future? If so, how many and how should the responsibilities be divided over the long term? An organizational chart can be created here.
2. Clarify legal requirements
In the next step, you should definitely clarify whether your company requires special legal permits and requirements. So there are different activities that are one basic Permission requirement are subject to, for example in the area of private hospitals, amusement arcades or in the travel industry.
If you want to become self-employed in the trade, you have to Master's duty Note: You must either have completed the master craftsman examination yourself or employ a master craftsman. Also at independent professions subject to chamber duties (for example as a doctor, architect or notary) you must be able to prove your professional qualifications. In the area of pharmaceuticals, road haulage, insurance and a few more, a Expertise examination at the Chamber of Industry and Commerce (Chamber of Commerce and Industry).
But even if you have the right qualifications, it may be necessary to obtain additional permits. Operating rooms and facilities must, for example, from the Trade inspection be removed, the Building authority approves structural changes. In restaurants, doctors' offices or childcare, approvals are required Health department necessary.
3. Determine the legal form
The legal form of one's own company has far-reaching consequences, especially with regard to tax and liability issues. Basically be Sole proprietorship, partnerships and corporations differentiated. While the founder is personally liable in sole proprietorships and partnerships, only the share capital is liable in corporations. Partnerships and corporations usually have to become involved in commercial register enter, for sole proprietorships this is optional. With the entry in the commercial register, the publication of a Balance sheet at the end of the year. Sole proprietorships that are not registered in the commercial register only need to submit a simple income statement with their tax return.
The partnerships include, for example:
Civil Law Society (GbR)
This arises as soon as you carry out a commercial activity with at least one co-founder
- Advantages: The establishment is quick and uncomplicated without many formalities, you do not need start-up capital and simple bookkeeping is sufficient.
- Disadvantages: You are liable with your private assets, investors cannot be included here and you will have to convert your company to another legal form if it grows strongly.
Open trading company (OHG)
The OHG is, so to speak, the continuation of the GbR with strong company growth.
- Advantages: The OHG is easy to set up, enjoys a high reputation with banks due to personal liability and the various shareholders can contribute their strengths.
- Disadvantages: Double bookkeeping and an entry in the commercial register are mandatory, partners are liable with private assets and disagreement between the partners can endanger the company.
Limited partnership (KG)
Here, too, at least two founders are required, but there are different types of liability. If the partners are limited partners, their liability is limited; if you act as general partners, they are fully liable.
- Advantages: Limited partners are only liable in the amount of their contribution. No start-up capital is required.
- Disadvantages: The company name is not freely selectable, limited partners are not allowed to run the company at the same time and there is a balance sheet obligation.
The corporations include:
Limited Liability Company (GmbH)
Anyone who has enough start-up capital can set up a GmbH on their own and is not liable with their private assets.
- Advantages: The liability is limited to the company's assets, a GmbH is attractive for investors and enjoys a good international reputation, the salary of the management is tax deductible.
- Disadvantages: It is time-consuming and expensive to set up, a minimum capital of 25,000 euros is required, the bookkeeping is more complex and balance sheets have to be published.
Entrepreneurial Society (UG)
The UG is also known as a mini-GmbH, since a start-up capital of one euro is sufficient.
- Advantages: Here, too, liability is limited to the company's assets and there are lower notary fees than when setting up a GmbH.
- Disadvantages: You have to build up reserves from 25 percent of the annual surplus until a share capital of 25,000 euros is reached. A low start-up capital harbors the risk of over-indebtedness.
The AG is the "big sister" of the GmbH. One or more founders must take over shares in return for contributions.
- Advantages: There is limited liability, the AG is very attractive for investors, shareholders can easily change and it is also possible for one person to set up the company.
- Disadvantages: This legal form is only suitable for very large start-up projects; start-up capital of at least 50,000 euros is required.There is an obligation to hold a general meeting and to form the supervisory board and management board, and the bookkeeping regulations are strict.
4. Find names
The company name needs to be carefully considered. After all, changing it later can be costly and cost you painstakingly built brand awareness. However, you are not entirely free in your choice of name. In the case of a GbR, for example, the names of the founders must be included in the company name.
Additionally, you should make sure that the intended name not protected by trademark law or is otherwise already assigned in order to circumvent injunctive relief and claims for damages. You should definitely do a research at the German Trademark and Patent Office and the company register.
In general, you should make sure that the name is easy to pronounce, write and remember. In this way you ensure that potential customers can keep your company in mind and can easily research it online. Ideally, you should also try to find a name that works abroad and that can be easily abbreviated for a logo.
5. Make the formal incorporation
In order to really establish the company officially, various administrative procedures are necessary, which differ depending on the legal form.
- Freelancers as well as tradespeople must take their company into account Tax office report and there your own tax number apply for.
- For every company there has to be a Business registration at the trade office be made.
- For business areas that are subject to compulsory chambers, admission to the responsible Chamber of Commerce and Industry (IHK) is then necessary.
- Corporations must have a Notary at the local court register. Here's the one too Commercial register entry Mandatory.
- If employees are to be employed, a Company number be requested.
- Joining the Trade association compulsory.
6. Clarify property rights
In order to preserve the unique selling proposition of your young company and to secure it from the outside, you should get extensive Intellectual Property Rights strive. The best-known property right is that patent, with which you can protect your business idea. But also a registered design and Trademark rights keep from being copied by competitors.
If, on the other hand, you adopt a concept (for example as a franchisee), you have to Rights Holder Licenses acquire. As a rule, these allow you to offer products or services within a certain framework and for a certain period of time. You may use utility models, designs, logos and characters from the licensor for this purpose.
7. Take out insurance
Make sure that you are self-employed as well Compulsory health insurance subject. Here you can choose between private and statutory insurance. In order to cushion the risks of self-employment for yourself as well as possible, there are also one Personal liability, occupational disability and legal protection insurance advisable.
At the same time, you should also protect your company as well as possible. Depending on the industry and the size of the company, different types of insurance make sense here, for example:
- Public liability: insured against claims for damages by employees, customers, visitors, suppliers, etc.
- Professional Liability: protects professional mistakes such as wrong advice or appraisal, is particularly suitable for service providers and freelancers.
- Business interruption insurance: covers running costs such as salaries and rent if no income can be generated for a certain period of time.
- Burglary insurance: insures damage caused by destruction, theft and damage.
- Fire insurance: covers damage caused by fire or explosion.
- Machine insurance: takes effect when repairs are carried out on stationary and mobile machines that are necessary due to human error.
8. Set up business account and accounting
While freelancers and sole traders can use a regular, inexpensive checking account, partnerships should use an actual business account. For It is even an integral part of the formation process for corporationss, because they only become legally competent when the necessary share capital has been paid into the account and receipt has been confirmed by the notary. When choosing a bank, it should be taken into account whether deposits and withdrawals are possible in cash, how high the account management fees are and what general financing options the bank offers.
In addition, it is now the case accounting put on. All income, payments and liabilities are to be recorded here. How exactly the bookkeeping should look like depends largely on the respective legal form. So are sole proprietorships and the GbR released from the accounting obligation (as long as sales and profit do not exceed EUR 600,000 or EUR 60,000), which does not mean, however, that inputs and outputs do not have to be documented. Freelancers, for example, have to state this in the form of the income-surplus-regulation (EÜR) in their tax return. This form of simple accounting at the same time helps you to keep track of your own finances.
9. Create a public image
The last step is to present your company to the public. Insert one Corporate Design and design your website and promotional materials with this in mind. Work one Marketing strategy and communicate the added value of your company to potential customers. Now you are ready to take off with your own business!
Originally published September 19, 2019, updated 30 June 2020
Recommend this article:
- What is the future of the Italian economy
- Can ENFPs work with ENFPs
- Who helped you the most
- What is the RCC Foundation
- Surya Namaskar contains all of the Yogas benefits
- Is Singapore a tax haven
- How do they choose MK Ultra victims
- Who led Israel after Joshua's death?
- The real meaning of love is dead
- How was South Korea so westernized
- How do cities become partner cities?
- Is Dubai overrated
- Can overtake paytm Flipkart
- What makes investment bankers so unhappy
- What is an accountant
- When can I change my job?
- Where would you invest in Africa
- How do you make him interested
- Does Allah exist 1
- How respectable is respectability policy
- Why are husbands afraid of their wives?
- How many Google employees became billionaires
- Who plays George Crawley Downton Abbey
- What are relationship problems