The business plan
Once an idea is born, it’s hard to get it out of your head. Company founders often struggle for months or even years with the question of whether they want to realize this idea. Of course, many factors play a role here: Is there seed capital? Is there a gap in the market? To what extent can the idea be expanded? Which legal and bureaucratic aspects do I have to consider? All this plays a role in the so-called start-up preparation.
A business plan is often used for this purpose. The Federal Ministry of Economics and Energy has put such a structure online for a business plan. This contains the points “founders”, “business idea”, “market and competition”, “marketing”, “organisation and employees”, “legal form”, “risks and opportunities”, “financial plan” and “documents”. Especially in financial planning it would make sense to get professional help in the mind of a financial advisor. Some entrepreneurs, depending on whether they already have experience in this field, prefer support for the entire preparation of the business plan. Such a business plan must provide business founders with a critical view of their idea and a good guideline for the further development of their company. There are also certain groups of people who demand a business plan from the founders. For example the employment office (if one intends to become self-employed due to unemployment), donors (because they want to know whether the concept is profitable), promotion and guarantee banks (with the application for subsidies) and other business partners (e.g., suppliers).
After you have drawn up your business plan, you should now take a look at other business plans from the industry. You may find new information there. To acquire a foreign business plan is unfavorable, as the individual components of one’s idea cannot be integrated in this way. Once the business plan has been drawn up, it is worth writing a small summary, i.e., an executive summary, about the company and the most critical points in the business plan. This is thought support when talking to business partners, but also a template when you want to present your company (e.g., in crowdfunding).
Step two: The bureaucracy begins
The business registration
After the business plan has been drawn up and the founder is sure of his idea, he has to go through many administrative procedures. But before these can be dealt with, other questions must first be clarified. One question would be the insurance of the company founder. For some industries, certain guarantees would make sense. Another matter is the decision for a legal form. You can ask a lawyer for advice on this question or research it yourself on the Internet. The start-up portal of the Federal Ministry of Economics and Technology is a proper address. It is important to emphasize that the legal form is also relevant for taxation.
Once the legal form has been decided, the company founder can start the business registration process. Depending on the trade, this can be simpler or more complicated. “Freelance professions” such as doctors, lawyers, engineers, journalists, etc. do not have to register a trade. All others can complete a business registration for a certain amount of money, which varies from city to city and on presentation of their identity card. Certain trades, such as handicraft enterprises, must provide precisely defined evidence. If there are any uncertainties in the process of registering a trade, you can also contact the employees of the Trade Licensing Office. The registration automatically notifies other offices such as the tax office, the Chamber of Commerce and Industry and other institutions. Thus the tax office automatically notifies the business registrant, and you have reached the next stage.
The tax office
The tax office is a stage in the process of setting up a company that causes a lot of stomach ache, but which one does not have to fear with a well thought-out business plan. It is important to note that freelancers also have to register with the tax office. This has to be done as soon as the action starts. This is particularly important because the tax office also assigns you your tax number. By the results of a questionnaire that the entrepreneur must fill out, he receives a tax class, as well as the amount of the tax prepayments – the income tax, corporation tax, trade tax, and sales tax. Turnover tax is the only tax that is not determined in advance by the tax office. Because this results from the monthly sales tax advance return. By the tax return, the tax office analyses whether tax refunds or tax arrears must be disputed.
Not to be confused with the tax number there is still the value added tax identification number (abbreviated USt.-IdNr.). This is mandatory for entrepreneurs who wish to participate in the intra-Community movement of goods within the EU. For all others, the VAT identification number is voluntary and can be requested. While the tax number has to be stated with every invoice, the VAT identification number has to be noted in the imprint of a website (if available).
Financing also poses a particular obstacle. The company founder should calculate the total capital requirement. These should cover all formation costs, such as the costs of a notary and all fees for registration and processing of applications, as well as all formation investments, i.e. loss compensation for the first months, the costs of websites and reconstruction costs, etc.. For this, equity capital can be used, which was saved for example by past salaries, or borrowed money. However, the equity capital would be slightly to be favored, since it is not yet to be paid back with interest.
Since the choice of the legal form and also the general tax legislation are very complicated, one should consider consulting a tax consultant. Who would like to save the money, can inquire with the IHK and the job center about beginner courses, which are usually free.
However, you can also make practical applications, for example, you can apply for loans and grants. Applications can be submitted for business start-up subsidies or advisory subsidies. If the founder of a new business is unemployed at the time of the founding, he can also apply for a start-up subsidy.
Choice of location
Depending on how much buffer you still have according to the capital requirement calculations, the choice of location begins. The infrastructure must be taken into account. The company, which focuses on sales, should have connections to motorways and ports as far as possible. These costs would then not be comparable to those of a home office. Therefore it is also a question of finances to choose the location of the company because many companies cannot afford to start directly in the larger cities. They then prefer to expand in the course of their success. In this case, one has to turn to the building right planning office.
Otherwise one could still come into contact with these authorities:
- You have to contact the Federal Employment Agency to obtain a company number.
- Most companies and freelancers must register with the employers’ liability insurance association.
- As a craftsman, you must register with the Chamber of Crafts, and artists and publicists must register with the Artists’ Social Insurance. A few of the liberal professions must also register with the registry office. The pension funds are responsible for providing for the old age of freelancers.
- Before founding a company, the founder must make sure that the name, logo, products/inventions and the domain of his own company are not already protected and therefore belong to someone else. Here one can inform oneself partly with the patent office, otherwise also by Internet after the name inquire. If everything is still available, you should definitely have your ideas protected.
It is best to wait impatiently for the opening of your company. That presupposes naturally that the interested ones already know before the opening of your idea. This can be achieved by stirring up the advertising drum, be it by your own homepage, where for example a countdown is running or by flyers. The product should always be advertised without revealing too much. Mouth propaganda is also effective and cheap, because family members, friends and acquaintances can be used for this. The more people from you and your company.