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Start-ups

Start-up - commitly

Business start-up refers to the realisation of professional self-employment. It is also referred to as setting up a business or founding a company.

A business start-up should never be carried out without a well thought-out business idea and precise business plan. These two pillars are the basic framework of a successful business start-up and should already be completed before the actual foundation.

Two ways to start a business

The desire to found a company can have two different motivations.

  • You have your own business idea (unique selling point, USP or unique selling proposition) that sets you apart from your competitors.
  • You want to start your own business, but you don't have a precise business model and decide to set up as a franchisee in your industry.

From the business idea to the start-up

You want to start your own business and have a business idea. Formulate it. This will help you to achieve your goals of starting your own business and not to lose your way. You should ask yourself the following four questions:

  1. What is the unique selling proposition of my products/services?
  2. How can I earn money with it?
  3. What benefits do I bring to my customers?
  4. What does the market look like, my competitors?

Because one thing is certain, at the end of the day, after the foundation, the profitability of a company determines the survival of the business model.

Info: Favourable product costs are not a sufficient USP. Start-ups based on this are doomed to failure in most cases.

Franchise, the other way of setting up a company

If you do not have a specific business idea but want to start your own business, franchising is a good business model. In Germany there are over 1000 franchise concepts that can be founded in all kinds of industries. From motor vehicles to real estate or craftsmen to marketing or retail.

Franchising is a business plan written by the franchisor, with which you are the founder of a company from one day to the next. Nevertheless, before you start your own business, you should check whether the respective concept also has potential for success in your location and whether the market can hardly wait for your start-up. (See next point: Business plan for setting up a business).

Advantages of franchising

The franchisor accelerates the establishment on the market, since the brand or the business idea is already known and does not have to make a name for itself. Some banks also consider this business model to be more creditworthy, which promotes the start-up.

Disadvantages of franchising

Before the start-up can begin, a licence that enables the opening must first be acquired. In the context of a franchise, it must be taken into account that parts of the proceeds must be given to the franchisor. In the same way, you have to adhere to certain specifications where you are not free to decide.

Business plan - the basic framework for setting up a business

One thing is clear: you need a business plan before you start your own business. In it, you should write down your ideas and business goals, but also your financial plan. The business plan is the guide that will help you to start your own business.

In order to be able to successfully master a business start-up, a business plan is mandatory!

Because at the latest when you go to the bank and apply for a loan, you will have to present it. The better you can sell yourself, the better your chances are.

What should definitely be included in the business plan:

  1. The business idea
  2. A market analysis
  3. Financial planning
  4. Marketing measures
  5. Location analysis

How do you create a business plan for a start-up?

At this point it should be mentioned that you should write your business plan yourself. In Germany, there are many institutions that help you with this by means of a founder coach.

These points are to be addressed:

  • If you want to involve external partners, which ones?
  • How do you get these partners or other funds?
  • A detailed financial plan that shows how much money you need and what it is needed for.
  • How does the phase before setting up a business work?
  • What steps need to be taken in order to start a business?
  • How should the first few years of business after setting up a business go?
  • What operational measures need to be taken to make the start-up successful?

Tip: Before setting up your own business, take advantage of the advice and checklists on all aspects of setting up a business provided by the Federal Ministry for Economic Affairs and Energy (BMWi).

Start-up grants - the elevator to business start-up

Subsidies for setting up a business can come from different funding agencies. As mentioned, the financial plan should already describe the sources from which you would like to obtain subsidies.

What sources of support are there for setting up a business?

Very few entrepreneurs have sufficient equity capital at their disposal when setting up a business. In order to have sufficient financial resources available, these can be acquired or requested from banks and other funding agencies if certain requirements are met.

Start-up grant: One must be self-employed on a full-time basis and thus end unemployment.

  • EXIST Start-up Grant: This funding for young entrepreneurs is for all those who are either fresh out of university (maximum 5 years behind) or have already completed half of their studies.
  • Then there is the classic loan from the house bank.
  • For start-ups or foundations with a high risk factor, business angels or venture capital can also be involved as equity providers.

 

Customer acquisition after starting a business

To make sales at the end of the day, you need customers who use your services or products. People tend to forget about the acquisition of new customers and the associated costs when planning their finances. Even if marketing costs some money, you must not forget the associated sales and visibility that result from it.

5 tips for starting a business

 

1. the business idea:
Fine-tune it until it is sophisticated.

2. the business plan:
Planning is the be-all and end-all. This way you can overcome hurdles because they have already been included in the planning.

3. support in setting up a business:
Before you really get started, it is advisable to get external support. For example, a start-up coach.

4. the bank meeting:
Even if your business and financial plan seems to be perfectly thought out, do not take the meeting with your bank lightly. After all, it will determine whether or not you start your business.

5. a business account
In order to always have a clear overview of your finances, it is advisable to open your own business account when setting up your business and to keep it "clean".

 

Conclusion of the company foundation

According to KfW's Start-up Monitor 2019, around 30 percent of all entrepreneurs end their start-up after just three years. The KfW Start-up Monitor has been observing this development for several years now.

As mentioned several times before, thoughtful planning is crucial when starting a business to ensure its survival.

With the recommendations described in this article and the 5 tips for starting a business, you should be well prepared for your business start-up. Nothing stands in the way of a successful start-up.

Credits: Photo from pixabay, by augustfinster