Always keep an eye on customers and competition: (Online) marketing and sales
Whatever the industry, your business concept cannot succeed without marketing and sales. It is essential to market your company, its products and services in a very precise way in order to attract customers’ attention and, ideally, secure them as repeat customers for long-term growth in revenue.
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Strategic and operational management
Actively plan your company’s development. Planing and guiding – in a word, controlling – is a core task for every business owner. Set targets, develop strategies, and above all check whether the strategies have achieved the desired success. And think about whether foreign markets are interesting for you – either as places to sell your products and services or to purchase goods. Highly-qualified and motivated staff are key to helping you successfully establish your young company on the market. Social insurance contributions in Germany are roughly shared equally by employer and employee.
If your company is growing you often need to find new employees – either on a marginal basis, part-time or full-time. Well-trained and motivated employees are key to helping you establish your young company in the market. Employment law regulates the relationship between employer and employee. Numerous regulations need to be considered, ranging from the type of employment contract and collective agreement rules, to occupational safety, parental leave, holidays, and notice periods for termination of employment.
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Recognize obstacles – overcome obstacles
- Insufficient funding: Many founders incorrectly estimate their short-term capital needs and start with a deficit.
- Liquidity risks: Loans for starting a business are often calculated too low. This puts your ability to cover your financial obligations (liquidity) at risk. As a result, ongoing bills can no longer be paid and sufficient financial reserves cannot be accumulated. This leads to more debt, which in turn makes it difficult to get additional loans.
- Weak market strategy: Many founders lack a clear initial marketing and sales strategy to successfully promote their products and services.
- Lack of networks: Companies entering an unfamiliar industry often lack essential contacts for staff, suppliers, and customers.
- Poor controlling: Serious problems result from focusing too heavily on short-term planning and lacking solid knowledge of financial controlling, including receivables management.
Subsidies for business consulting
Subsidies are available for getting advice on digitization, marketing and sales, the acquiring of staff, and much more. If you need close support regarding these and other business topics, you can turn to an experienced professional coach. The Federal Office for Economic Affairs and Export Control (BAFA) offers consulting subsidies which cover 50 percent of the cost as part of its program “Supporting company know-how” (“Förderung unternehmerischen Know-hows”), also known simply as BAFA Coaching. Depending on whether you registered a “Gewerbe” or a “Freier Beruf,” there are different points of contact:
- Businesses registered as a Gewerbe and members of the IHK (Chamber of Commerce and Industry) should turn to their local IHK
- Businesses registered as a Gewerbe and members of the HWK (Chamber of Skilled Crafts) should turn to their local HWK
- Those registered as a Freier Beruf should turn to the Förderungsgesellschaft des BDS-DGV mbH für die gewerbliche Wirtschaft und Freie Berufe
- Further regional points of contact are listed on the BAFA website
Important Notes: Always verify in advance that your chosen coach is registered with BAFA and holds a valid consultant ID. You may only sign the consulting contract and start the coaching after you have received the official “letter of prospect of funding” (Inaussichtstellung der Förderung) from BAFA.
Dealing with the tax office
As a rule, young companies pay few or no taxes at the beginning, as their income is usually low. However, if your company later does well, the tax office may – usually around year three or four – dramatically increase the taxes you need to pay in advance. If you also have to make back payments at the same time, you can quickly find yourself in financial difficulty. You should therefore plan to pay high amounts of tax. Be aware that you need to pay income (“Einkommensteuer”), corporate (“Körperschaftsteuer”), and trade tax (“Gewerbesteuer”) every quarter. Learn more about taxes and accounting.