Do you have a clever business idea? Do you think you can inspire new ideas on the market? Then the temptation to set up a start-up is certainly quite great. But the role as your own boss not only brings increased responsibility, more flexibility and decision-making power. In the end, there is also more financial expense for the entrepreneur. But of course it is a long way to success and not every good idea pays off in the end. Only a quarter of company founders make it out of the initial phase and into the profit zone.
At the end of the process, the goal is to make money with the developed concept and to survive on the market. Good planning and all sorts of preliminary considerations are essential for this. Rush start-ups without long-term planning are rarely crowned with success. Consistent and permanent reflection on one’s own behavior and personal decisions is indispensable. A start-up is a principle that is flexible and subject to continuous change.
Basically, you should be convinced of your idea and have the necessary level of passion. If you only want to set up the company to earn a quick buck , then it’s best to be direct. Your drive should be an inner conviction, based on an initially relatively simple basic idea. On top of this you can build the rest of the idea. The following ten tips will help you as an entrepreneur to emerge as a winner in the end if possible.
Tip 1: Adjust to the role of the entrepreneur
Big words are spoken quickly, but the actions that follow are what count. Being self-employed is very different from being an employee. As the founder of a company, you hold all the strings in your hands. They take care of planning, appointments, bookkeeping, order acquisition and contact maintenance, to name just a few aspects. A high degree of self-discipline and self-organization is required of you here. You should also not be very susceptible to stress, as a lot is expected of you, especially in the initial phase. 60 and 70 hour workweeks are no exception.
Nevertheless, care should be taken that your private life does not suffer too much. Always allow yourself rest periods and consider that founding a company ( company founding legal form ) is not a sprint, but rather an endurance run in which you should have the necessary breath for several years to achieve success. The level of frustration can also occasionally get quite high. It is important to endure this and not to be discouraged by setbacks. And they will definitely come, so be prepared. Company founders must be resilient and have a high degree of patience
Tip 2: Keep the business idea simple and concept-oriented
A good idea is half the battle. Many euphoric company founders make the mistake at the beginning of unnecessarily complicating the idea. First of all, the idea should be quite simple. In the end, don’t overload the initial concept with unnecessary small ideas that come to you. Make sure the initial concept is simple and understandable, and build the business plan around it. However, the idea should not only be simple, but also realistic to a high degree, so that it actually leads to success in the end.
The idea should always be seen in the context of your personal skills. Are you an expert in the sector you are aiming for? Possess the appropriate education, as well as have the appropriate qualifications. Only those who have good knowledge of the industry can keep up and lead the start-up to success.
It is important that you differentiate yourself from the competition with your idea and find your own niche. The latter is not possible without appropriate knowledge of the market. It is also important that your idea is not a bottomless financial pit. You also need an understanding of whether your business idea can be financially independent . Refinancing ( for the definition of refinancing ) should be possible without much effort and in the foreseeable future.
Tip 3: Nothing without a good business plan
Starting a business without a business plan is almost impossible. Not only does this act as a kind of written roadmap for your start-up, it is also an unbeatable argument when it comes to winning potential financiers for your project. In a detailed plan, you break down what your future business plans look like, where you plan to take the company in the near future in the longer term and what the financing options look like. When writing the business plan, keep the following points in mind:
Write the plan in as neutral a language as possible
- Concrete and realistic statements are in the foreground. Facts are, so to speak, more important than emotions
- Look for evidence and statistics to support your views
- Problems and obstacles should certainly be taken into account and integrated, but always in connection with concrete proposals for solutions.
- Pay attention to comprehensibility and don’t get lost in unnecessary technical terms and clichés that are difficult to understand.
- Also, waste enough time on the layout of the business plan. Here, too, the first impression is the decisive one.
Avoid repetition, make sure it is legible.
Then have the plan read over again by a suitably qualified person.
A business plan contains various sub-areas, such as a financial plan, marketing plan or personnel plan. It is important to deal with all topics as evenly as possible. If you also have little knowledge of certain areas, especially in the financial sector, then it is advisable to seek appropriate advice in advance. It is particularly helpful to get someone on board who is familiar with this area.
Tip 4: Be flexible
Even the best business plan and the most precise preliminary considerations are worth far less than originally thought when it comes to implementation in reality. Theory is theory, practice is usually more unplanned. So don’t wear blinkers, but always approach new ideas with an open mind. It is important to keep your stubbornness and your conviction for the project. There will always be people who will advise you against it. It is important to keep the balance here. Don’t let your idea be talked down if you are convinced.
On the other hand, listen carefully when it comes to the feedback that acquaintances or even customers give you. There is always something to improve, and just because an idea is well conceived does not mean that it can always be easily implemented in everyday business life. So don’t be afraid to leave existing paths and try out new ways of thinking. Adaptable entrepreneurs are usually those who end up on the winning road.
Tip 5: The right way to start-up capital
No matter how ambitious your plans are and where you want to go with the company – equity -definition-finanzierungsform-verluste-fremdkapital-erklaerung-_id31987.html”>without the appropriate equity you will have little success in the long term. But as we all know, money doesn’t grow on trees. Nevertheless, you should plan around 15% equity. This is the approximate rule of thumb when it comes to applying for public funding. Otherwise, in the context of seed capital, a thorough breakdown of capital requirements is necessary. This includes the following points:
- Cost of private life insurance
- Renting and setting up an office
- Equipment, such as office supplies, materials or machines
- marketing costs
- If applicable, employee costs
Calculating the required start-up capital is part of the business plan. Since you have to convince potential lenders and banks with this, it is very important to make these calculations as detailed as possible. Calculate your requirements precisely, if necessary also include losses and unplanned expenses.
If you have little financial leeway, it is still possible to get the outside capital through loans. The bank for start-ups marks the KfW-Mittelstandsbank , which grants loans to small business owners. But state development institutes are also a starting point here. The employment agency also offers financial support as part of the start-up grant, which you can also use as start-up capital. And even your own house bank is definitely a contact point. Please note, however, that each institution makes lending subject to different conditions. You should be careful, especially when it comes to interest and repayment terms, and choose the option that is best for your company.
Tip 6: Insure yourself well
Something can always go wrong and starting a business without taking out the appropriate insurance is truly negligent. A major obstacle is often that, especially in the early days, there are not the financial means to afford appropriate insurance. But there is an increased risk for the self-employed in particular, since you have more responsibility than a normal employee. A failure can have relatively far-reaching consequences. However, you can protect yourself against illness and serious accidents in good time so that the entire company does not face an existential crisis in the event of a failure.
It is important that you let the insurance cover take effect in the right areas of your company. Compare the costs, include them in your financial calculations and, if necessary, seek advice from an insurance specialist. There are different types of insurance for start-ups. The most relevant include:
- Health insurance
- business liability insurance
- Disability insurance, especially for start-ups
- retirement provision
As soon as you add employees to your staff, accident insurance is also advisable. Product liability insurance for damage caused by defective goods is also advisable. The insurance models should always be considered with regard to your own cost planning for your start-up.
Tip 7: Choose the right legal form
When it comes to actively founding your company, you should decide at an early stage which legal form you would like to use . There are a wide variety of forms, from micro-enterprises to stock corporations ( here you can find out how to set up a stock corporation ). If you plan to found the company solely on yourself and your name, then choose from one of the following options:
- one-man business
- One-person GmbH
- One-Person Business Company
- One-person company
Sole proprietorships are certainly the most convenient entry point for entrepreneurs who work alone. You do not need a minimum capital, the foundation is relatively uncomplicated and informal. However, this also makes the entrepreneur fully liable and raising capital is a bit more complicated than with an AG.
On the other hand, partnerships are the better choice when it comes to setting up companies with more than just one person. Two people are enough to found a company together. In most cases, those affected do not have to raise any minimum capital, but are liable for this with their own assets. The GbR is the most frequently chosen form of entry. Shapes include:
- Civil law partnership (GbR)
- Limited partnership – limited liability company – _id30918.html”> Limited partnership (KG)
- General partnership (OHG)
- Partner company (PartG)
- GmbH & Co. KG
The corporations represent the third area. Their most important advantage is that the shareholders ( shareholder definition ) are only liable for the amount of their contribution and they can only be held liable for business activities. A certain minimum capital is a basic requirement for founding a company. The forms include:
- Limited Liability Company (GmbH)
- Entrepreneurial company , a GmbH variant with limited liability
- Joint-stock company)
- The correct legal form must be selected carefully. Above all, the liability criteria and the basic
- financial requirements play an important role. You should also use comparative examples when
- deciding which shape to choose. Orient yourself to other start-ups in your segment.
Tip 8: Organize yourself well and hand over work if necessary
Not everyone is a born natural when it comes to organization, but this point is essential for the functioning of a start-up. Bills have to be written and paid, appointments have to be prepared, telephone calls have to be made. And the success of your company stands and falls with your degree of organization and motivation. While ordinary workers can afford to be ineffective and do less than they are asked to do, as a business leader you have far greater responsibilities. As a freelancer, organization and discipline are cornerstones of your way of working.
It is best to make daily, weekly and monthly plans. Organize your day as best you can. Also important is the effective division of labor for your tasks, especially if you do not work alone. Every person has their strengths and weaknesses. Some are brilliant analysts and good at planning, others are more outgoing and communicative. And maybe other people can help you with organization and marketing. Precisely because of the high amount of time that a start-up company entails, effective time management is an important tool in organizing day-to-day business. Delegate responsibility for specific areas and don’t burden yourself with more responsibility than you can handle.
Tip 9: Create good marketing and brand identity
A good idea and an exciting unique selling proposition may be all well and good, but as long as nobody notices, that alone will not be enough for you. Although simple advertising measures can certainly still be managed reasonably well, this becomes much more difficult with increasing company size and demands. They therefore require strong marketing and advertising skills . Greater reach and better distribution require significantly more complex marketing measures. Look for cooperation partners in your segment and do not shy away from ambitious inquiries.
A helpful magic word in this context is always the so-called ” corporate identity “. A distinctive public appearance is indispensable and important. This includes factors such as corporate culture, design and also external and internal communication . Public opinion about a company forms relatively quickly. It is then up to you to change them if necessary and to define them from the outset. A good image creates trust, and that doesn’t just apply to the outside world. Dealing with customers and staff also falls into this area. A good reputation can be beneficial, a bad one makes it very difficult to gain a foothold in the industry again later. From the outset, you should therefore make sure that you present yourself as an entrepreneur in a unified and unified manner.
Tip 10: Find suitable and motivated staff
Good staff is notoriously rare and hard to find. But it probably won’t work without it in the long term. You should therefore think about personnel planning at an early stage, ideally when you are already formulating the corresponding business plan. Sooner or later you should therefore think about investing in the right staff. It doesn’t matter whether it’s marketing, controlling ( what is controlling? ), accounting or sales. If you start as a sole proprietor , you first need fundamental knowledge in these areas.
Initially, it is possible to outsource certain tasks, but in the longer term you should try to find the right staff for your business idea. For employees who start in a start-up, their own criteria apply. You have to be more self-motivated than normal employees and you are usually expected to do more at the beginning. This often happens in the initial phase with a payment that is not yet very rich.
Therefore, plan additional employees at an early stage, in many branches of the economy they are even indispensable for success. So, above all, select them based on the right motives and see whether the staff also offers special features that go beyond the specified skills. However, always consider the additional costs that arise for you as an employer.