From idea to start-up
The idea becomes a business model
Each new business is unique, and each start-up process is different. For example, if you are going to work as a freelancer and offer your service from your home office, you just need to register with the tax and revenue office and consult your landlord to ensure that you are allowed to work from your home. Once you have addressed all the insurance issues, you can then start to find customers right away. However, you should clarify beforehand whether the professional qualifications that you did not acquire in Germany need to be recognised.
We would like to show you the steps that you should consider for your start-up process. You can, however, skip some steps if you already meet these requirements or are not required to meet them. Check the following carefully: What am I allowed to do and what do I still need (e.g. licences, registration, permit, professional requirements)? What do I want to do and what do I want to achieve? Am I dependent on others (e.g. authorities or partners)? How quickly do I want or need to start? These questions (and others) will determine the path you take. Decide for yourself where you want to start and at which steps you need to take a closer look.
You can also find support for your start-up process from an advisor in our network. Use our support centre finder for this map of support centres.
The most important part of the idea
Before spending a lot of time planning a start-up, you should question your approach, your characteristics, and your social environment. Everything has to fit together. It is important to think critically about whether you have the qualities and want to face the challenges since the most decisive building block for the success of your self-employment is yourself.
- Motivation: Why do you want to become self-employed? What are the reasons for your self-employment? A strong motivation is the fuel for creativity, for your perseverance and the success of your independence. Even in difficult times, it gives you motivation and the strength to resolve conflicts.
- Characteristics and competencies: Take a critical look at your own personal, social, professional and entrepreneurial qualities and skills. Ask yourself whether you really want and can do your future tasks. Do you have the formal qualifications for your self-employment, or do you still need an adjustment qualification for your professional training to be recognised as equivalent?
- Compensating for your weaknesses: Nobody is perfect! Concentrate on what you are particularly good at and build on that. Be aware of your weaknesses and try to compensate for them, for example, with external advice or support from your family.
Am I allowed to start a business in Germany?
The key thing here is that your residence permit allows you to work on a self-employed basis. You can find out which residence permits allow self-employment and which authorities are responsible for this process under The right residence permit for your self-employment.
Finding a business idea
The starting point is, of course, your business idea. The main thing here is to come up with a good idea for a business. “Good” means: the idea matches your skills, your personality and your situation; there is a market with sufficient customers for your idea; you love your business idea; and you are familiar with the sector. The more you know about what you want to achieve and how your business idea should look, the easier it will be for institutions and professionals to advise and support you.
Many start-ups are successful with products or services that are already popular abroad but are not yet available on the German market. Existing products or services also have good market opportunities through further improvements or new services offered.
When searching for a business idea, it is important to choose something that suits you. Thinking about your own skills and interests can help you to identify a suitable idea for a business. Talk to your friends and relatives – ask them what they think you are especially good at. The following questions can be used as a guide:
- Who am I (my personal characteristics, strengths and preferences, and hobbies)?
- What do I know (my school and professional training, my abilities, my experiences, my skills, my specific tasks)?
- What am I particularly good at – do I have special knowledge in any area?
- Who do I know (especially people who I know well and can contact fast)?
If you have answered these questions for yourself, then you should examine your initial idea in more depth in the next step. The following questions can help you with this:
- Which 10 things can I do or do I know well?
- When did I use this skill and knowledge? Do I need any other knowledge??
- What can I already start with tomorrow?
What am I allowed to do in the sector I have chosen?
The real research begins (at the latest) once you are sure about your business idea and you have drawn up your first product/service profile: What regulations apply to the field you have chosen? Is it a regulated profession for which you need to meet specific requirements? Or is it a non-regulated profession without any restrictions? Are there professional associations that you need to (or can) register with? Do you have the necessary qualifications, or do you still need to acquire additional qualifications, such as to have the equivalence of your professional training recognised?
Is there a gap in the market?
Do you see yourself working in a “classic” market segment and believe that there are things that set you apart from your competitors (and have a so-called USP)? Or perhaps you are the only person offering your service in your area. Or is your business idea totally innovative and you are creating an entirely new market? It is also possible to develop a current offering so it is both familiar and new. Whichever path you choose, it is important that there is demand for your product or service.
Drawing up a business plan and developing your business model
You have now addressed the first questions and completed the first stages of planning your business. Now it is all about the detail. How exactly do you see your business planning, both in terms of strategy and financing? How will you make money? Who are your main groups of customers? What is a good location? You should answer these questions in your business plan. In many cases, you will need a business plan, for example, when applying to change your residence permit or for a bank loan. But even when it is not required, it can be an extremely useful way of minimising the risk and preparing for your business in detail. You can find out everything that you need to address in a business plan and the questions that you need to answer on our business plan page.
Have you completed your business plan? Now you need to show it to different specialists. You could, for example, go to your local town’s business development department. They will be able to help you or will be able to refer you to someone who can. Ask yourself: Is my plan convincing? Have I forgotten any key questions? What isn’t totally convincing or doesn’t make complete sense? Discuss your business plan with an advisor if you haven’t already contacted a support centre. If you are applying for funding or credit, it is especially important to first go through the main aspects of your business idea and to write these down in detail. You will then be ready to speak with the institutions that you need to contact in order to set up your business – for example, business development organisations and chambers, banks and other credit institutes.
Check funding options
Check whether there are funding options that suit your situation and business idea. Funding is not always the best option. But if you don’t have any starting capital, you should check to see what offers are out there. You can read up on the funding programmes that are available on our page Financing my business.
Registering your self-employment is important, of course, but it is not the first step that you should take. First, you need to check and clarify exactly what your work will look like and which requirements you need to meet. Do you want to apply for funding? If so, be aware that some programmes require you to apply for funding before you register your business, buy any goods or machinery or similar, or sign any contracts for premises. Have you prepared everything properly and checked it all? Are you ready to make a start? Now you need to register your self-employment with the responsible authority. You can find more information regarding this in Forms, documents and other papers. Depending on your legal form, you must then also register yourself with the Commercial Register.
As a self-employed person, you are responsible for your own insurance. You can protect yourself against private and professional risks. But all insurance costs money. Therefore, you need to consider insurance in your business plan and budget. If you’d like to read up again on important types of insurance, you will find the corresponding information in the Guidelines for easy start-up in Germany or in EntrepreneurTimes: Insurance.
Business Model Canvas
The Business Model Canvas provides an overview of the key aspects of your business. It can be used as a basis for developing a business model. Developing your business model is good preparation and forms the basis for your business plan.
The Business Model Canvas consists of the following nine elements: