Have you often had the feeling that working as an employee doesn’t suit you? Have you been thinking about being your own boss for some time? You want to be your own boss and start your own business?
A company foundation must be well considered. In this blog we show you six steps that will help you to start up your business.
Self-employment in 6 steps
1. From a business idea to a business plan
It all starts with a mature business idea that is economically viable. Question whether the idea has a Unique Selling Point (USP) or even represents an innovation. Or you can launch a service or product that has cost advantages or price advantages.
Carry out a market analysis to find out the strengths and weaknesses of the competitors. The analysis also serves to tailor your product/service to a target audience.
Even your day only has 24 hours. In a realistic self-assessment, you can find out what strengths and competencies you have, but also where you might need help. Focus on the strengths to move the business forward and possibly outsource other activities.
Prepare a complete and realistic business plan and get feedback from experts, banks, friends, etc.
With the business plan, you’ve already thought about and calculated what capital needs to be raised to build this business. What income and expenditure would this undertaking have in the near future, but also in the long term? Also, keep in mind that you may need to deposit capital when starting a business (share capital, notary, etc.). Do you have enough equity capital, liquidity, working capital and buffers if the business does not start as expected? Therefore plan for more capital requirements!
Many small business owners can finance the initial investment with their own funds. This of course has the advantage that you do not start with a loan or company debt. What sources of funding are there as well? Which funding is there, eg from the state?
Banks: Take advice from your local bank and also at other (start-up) banks. To get a loan approval, your business plan must be convincing. Include interest and amortization in your calculation. Most banks offer support and for start-ups with lower rate loans.
Friends and relatives: Sometimes people from your immediate environment can help you too. Set up a written agreement/contract so that the relationship with the person does not suffer.
Investors : You may even have a business partner or a business angel who wants to invest in your company or wants to help build the business?
3. Company formation
Do you have the necessary capital together? Then you can register your company and obtain the required permits (eg in a catering business you need a license to serve alcohol and to offer meals).
Think about which form of company is the most suitable for you. Take advise and carry out a thorough self-search. Because with the company form, you decide which legal rights and obligations you should receive and which advantages and disadvantages the form entails.
For example, a sole proprietorship can be set up within a few hours and you can be exempt from the obligation to keep records. However, as a rule, you are also liable for your private assets. In contrast, the founding of a Limited Company is lengthy and requires various appointments, articles of association, as well as the deposit of a share capital. In addition, you are then required to keep records, as well as issue balance sheets and profit/loss reports.
One of the duties of every entrepreneur is to have an overview of the finances. It is essential to have a sound accounting system so that you know which customer invoices have been issued, which supplier invoices have been received, what amounts have been moved to the bank account and what tax is payable to the tax office. Do not neglect these tasks!
We recommend an online accounting software . Why? You can send invoices, view the finances and enter receipts from anywhere and anytime, whether with a smartphone or a laptop. In addition, this software is often more cost-effective, you get free updates on legal changes, and multiple users (eg, your staff or tax accountant) can access and collaborate on the platform at the same time. This flexibility of location and time is essential in today’s economy!
5. Market entry and customer acquisition
You want to start now? What is your appearance so far ? What does your company name and company logo say? Do you have a professional website and/or a social media presence? Does that fit with your target audience? How do you market your product/service? These are all points that are gaining in importance today. Keep up with the times!
What do you have for personal and professional networks and how do you want to offer your service/product? It’s not about random advertising, but targeted advertising to reach exactly your target audience. Maybe an industry-specific trade fair, a company as a collaboration partner or a recommendation provider will help you.
Get feedback from your customers and analyze them. What do customers criticize and praise, what can be improved and what is important to customers? You have to be patient, success does not come overnight, but requires work and also a little luck.
Take advice from all quarters. It is useful to schedule regular meetings with your accountant, experts, and your bank or lender to analyze the development of the company and track trends. How can your company grow, if you have the right strategy, what is the objective?
Good luck with your business!