Deciding to start a business and become independent is a brave and exciting journey, but one that requires careful planning and preparation. We want to help you with this exciting adventure with our article! From basic considerations to a practical checklist, we will highlight the important steps and aspects you should consider when starting your own business. Let's find out together how you can turn your ideas into reality and successfully enter the world of business management.
Our checklist for setting up your business
☑️ 1. Good business idea
☑️ 2. Plan your business in detail
☑️ 3. Create a financial & business plan
☑️ 4. Choose the right legal structure
☑️ 5. Register your new business
1. A good business idea: The cornerstone of starting a company
Choosing a strong business idea is the basic framework for starting your own company. A good business idea is characterised by its uniqueness, added value and potential to meet the needs of a specific target group. It should not only take into account current trends, but also identify long-term market gaps and offer solutions. Developing a solid business idea requires research, analysis and creativity to ensure it is viable and sustainable.
2. Planning your business in detail
Before you take the step of starting a business, it is essential to draw up a detailed roadmap to avoid stumbling blocks and lay a solid foundation.
This is not just about the idea itself, but also about the strategic set-up. You need to think carefully about funding, the appropriate legal structure, the right name and other key aspects. This process requires careful analysis and critical thinking to define a clear direction for your business idea.
As part of the planning process, it is advisable to prepare both a financial and a business plan. This will not only allow you to identify potential problems, but will also give you the opportunity to address them before the actual start-up. A well-thought-out financial plan will give you an insight into the resources you will need, while a business plan will translate your vision into concrete steps and identify potential weaknesses.
Patience is essential at this stage. Rushing into planning could lead to costly mistakes later on, which could jeopardise the foundation of your self-employment. Take your time to consider all the details, seek expert advice and ensure that your planning is robust enough to withstand the challenges of entrepreneurship. Only when you have thought through all the issues will you be able to embark on the exciting journey of self-employment with confidence.
3. What are the funding options for your business start-up?
Financing your business is an essential building block on the road to a successful start-up. The costs can be many and varied, ranging from operating expenses to the development of products or services.
It is important to address the issue of funding at an early stage. Without a clear idea of how you will finance your business, unexpected bottlenecks may arise that hinder progress.
Bank loans are one way to raise capital, but they require a solid credit rating and a strong business plan. Investors could invest in your business, usually in exchange for a stake in the business or a future return. Government grants can also be a valuable source of financial support, especially if your business meets certain criteria. Last but not least, you can use your own savings to finance the start-up phase.
You can read more about this topic in relation to start-ups in our blog post "Financing a Start-up".
4. Choosing the right legal structure
Choosing the right legal structure for your company is one of the most important decisions you will have to make when starting a business, and it has far-reaching implications for the structure and operation of your company. This decision affects not only the way in which your company operates, but also aspects such as effort, costs, liability, minimum capital requirements, the number of founders and the distribution of decision-making power.
However, the choice of legal form is not a final decision. In some cases it may be necessary to change the legal structure after the company has been set up if the needs or circumstances of the business change. However, it is important to note that changing the legal form may have legal and financial implications, so it is advisable to seek professional advice before making such a decision.
5. Registering your Business
When starting a new business, you will need to look into ensuring legal compliance and operational legitimacy. The specific requirements can vary depending on your location and the nature of your business. Here are some places you might need to visit before your company can start operating:
Business Registration Office: This is typically a local or regional office where you formally register your business name, structure (sole proprietorship, partnership, corporation, etc.), and other essential details. This registration is often necessary for tax purposes and legal recognition.
Tax Authorities: You'll need to register your business with the appropriate tax authority to obtain a tax identification number. This enables you to pay taxes, file returns, and comply with tax regulations. Depending on your location and business type, this could include income tax, sales tax, or value-added tax (VAT).
Employment Authorities: If you plan to hire employees, you'll likely need to register with employment or labour authorities. This ensures that you comply with labour laws, provide proper working conditions, and fulfil your responsibilities as an employer.
Licences and Permits Agencies: Depending on the nature of your business, you might require various licences and permits to operate legally. These could include health permits, zoning permits, environmental permits, and more. Different industries have different regulatory requirements.
Industry-Specific Regulatory Bodies: Certain industries have specific regulatory bodies that oversee their operations. For instance, healthcare, finance, food services, and transportation often have specialised authorities that ensure businesses adhere to industry-specific regulations.
Intellectual Property Offices: If your business involves intellectual property, such as patents, trademarks, or copyrights, you might need to register with the relevant intellectual property office to protect your rights and innovations.
Local Authorities: Depending on your location, you might need to register your business with local city or municipality authorities. This could include obtaining a business license specific to your area.
Health and Safety Agencies: If your business involves health and safety considerations, such as food services or manufacturing, you might need to register with agencies that monitor and enforce health and safety standards.
Environmental Agencies: Businesses that have an impact on the environment might need to register with environmental agencies to ensure compliance with environmental regulations.
State or Provincial Authorities: In some countries, there are intermediate levels of government between local and federal levels. You might need to register with state, provincial, or territorial authorities in addition to federal ones.
It's important to research thoroughly and consult with legal professionals or business advisors to ensure you fulfil all necessary registrations and comply with relevant regulations. Non-compliance can lead to penalties, fines, or even business closure.