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.
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.
Recognize obstacles – overcome obstacles
Diverse studies repeatedly identify typical problems facing entrepreneurs and new companies. Key among these problems are mistakes regarding funding. Many founders incorrectly estimate their short-term need for capital and so start off with insufficient funding. 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. Many founders lack a clear initial marketing and sales strategy to successfully promote their products and services. In particular, companies entering an unfamiliar industry lack good contacts for staff, suppliers, and customers. Problems can also result from planning that focuses too much on the short-term, and poor knowledge of controlling including receivables management.
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.