You want to start your own business, but you have hardly any equity capital? Here's how it works anyway!
Setting up your own business without money – is that possible at all??
As a prospective self-employed person you are of course aware that WITH money everything is a bit easier than without. But even if you don't have the big financial means, you don't have to bury your dream of self-employment.
Whether starting a business without capital is feasible and makes sense depends largely on your business idea. Logically, you need money for personnel and purchases such as computers, machines, equipment or company cars. So it's absolutely unrealistic to launch a giant business without capital.
However, there are also sufficient fields of activity where the capital investment is low and manageable.
Setting up your own business without money – 4 options for start-ups
A business start-up does not necessarily have to cost a lot of money. With a good business idea and little money, you have 4 ways to start your own business:
- 1. Freelance work
- 2. Part-time activity
- 3. Raise capital
- 4. Apply for funding
Become self-employed with freelance work
Especially as a freelancer, becoming self-employed without equity is often quite possible. This category includes artistic, writing, teaching, educational or scientific professions. The required equipment is partly cost-technically within limits and the exercise of the activity is perhaps also possible from at home, so that no rent is incurred.
GOOD TO KNOW: In § 18 Income Tax Act you will find a detailed list of professions that can be practiced as a freelancer. Freelancers benefit from tax breaks and accounting simplifications. Have the trade licensing office, your tax advisor or service providers such as KleingewerbeAnmelden.org advise whether freelancing is an option for you.
Becoming self-employed with a part-time job
As the name suggests, you can carry out a part-time business activity alongside your main job. So you don't have to put all your eggs in one basket and can build up your business "on the side". You remain covered by health and social insurance through your employment and have the security of monthly wage payments.
If your turnover from the commercial activity is less than 17.500 euros in the first and 50.000 Euro in the second year, you can take advantage of the small business regulation and the associated benefits according to § 19 of the VAT Act.
Raising capital – 8 ideas
If you do not have your own capital, you still have the option of obtaining outside capital. It sounds so simple – but is it really?? What you need in any case to find investors is: a good to brilliant business plan, persuasiveness and valid arguments.
- 1. Bank: ask your bank for a favorable start-up loan or start-up money for start-ups. There are banks that offer special conditions such as repayment free of charge over a certain period of time.
- 2. Borrow collateral: Even if you don't have cash, you may have capital in the form of property, insurance, or appreciated assets. The bank grants a loan more easily if the required amount is covered. Be sure to get advice before taking out a mortgage on your house or condo, for example.
- 3. Guarantee banks: If such securities are missing, you can turn to a guarantee bank. These development banks are intended to support start-ups, which is why they are state-subsidized. The guarantee of this bank is recognized by other credit institutions as collateral.
- 4. Crowdfunding: you start the campaign by posting your business idea and a funding goal online. The crowd (meaning the general public) can now participate financially in your project.
- 5. Partners: You sell shares in your start-up to partners. Silent partners invest in your business model, but have no say and are not allowed to make any decisions. In return for their investment, they receive regular business reports and information about the economic success of the company. Contributing partners also participate financially. In addition, they are involved in decisions that affect the start-up.
- 6. Business Angels: Your business idea has to convince the Business Angel as much as you as the founder. Business angels don't just invest in startups. They also act as mentors and provide support through their know-how and network.
- 7. Become a franchise entrepreneur: The franchisor determines the amount of capital you need for the use of the brand, etc. Pay. In some cases, franchising without start-up capital is also possible.
- 8. Borrow start-up capital: Perhaps you can borrow money from family or friends to start your own business. You must carefully consider whether an interest-bearing or, in the best case, non-interest-bearing personal loan is an option for you! After all, the economic success of your business cannot be estimated and a (timely) repayment may not be easy. Before there is trouble with your loved ones, it is better to leave it alone!
TIP: Make a list of the costs that come with starting your own business. What equipment do you need? What technical equipment is necessary? Do you have to rent an office or other premises? Once you know your financing needs, you can consider which route you want to take to raise capital. Remember that borrowed money has to be paid back and include the monthly installment in the calculation. Don't take any risks and seek advice from a tax advisor or small business registration office.org on. Here you will find comprehensive information on capital requirements, subsidies and financing options.
Apply for funding
For budding entrepreneurs there is the possibility to apply for subsidies. Germany-wide there are over 2.000 Support programs for start-ups.
Students, university graduates and scientists can apply for an EXIST start-up grant. Depending on the educational qualification you can show, the amount of the grant is between 1.000 and 3.000 Euro per month. Grants are also available for material expenses, coaching and further training. The scholarship is linked to the particular innovativeness of the business idea.
Even from unemployment, there are ways to start a business. For example, if you want to start your own business without cash and are receiving unemployment benefit I, you can apply to the Federal Employment Agency for a start-up grant. If this is approved, you will receive unemployment benefits PLUS 300 euros per month for 6 months. If the half year is over, the unemployment benefit will automatically expire and you will receive a subsidy of 300 Euro per month for another 9 months.
TIP: In addition to the start-up grant, there are other support offers for prospective self-employed people who want to end their unemployment. The Federal Employment Agency or. The job center provides start-up entrepreneurs with activation and placement vouchers (AVGS for short). You can redeem these for start-up seminars and coaching sessions to prepare you for setting up your own business.
Start your own business without cash – The best tips
You have little or no equity capital and cannot or do not want to raise outside capital. Nevertheless, self-employment should not remain a dream. Here you will find the best tips on how to start your own business without money:
- Keep the costs low: Think about what you need as a self-employed person for the start-up phase. What is absolutely necessary? What can wait?
- Save the rent: Work from home (if possible) or look for a shared office. It is often not necessary to have your own office with extensive furnishings and equipment, especially in the early days.
- Do without employees: Personnel costs make up a large part of the monthly expenses in many companies. Do not hire staff in the beginning and contract out or outsource tasks you can't do yourself.
- Start part-time: Try out your business idea with the security of a permanent job. .
- Take small steps: Build your business in small steps.
Conclusion:
You want to start your own business with no cash, no equity. You must realize that the road is not an easy one. You need a lot of energy, stamina and endurance. And you definitely need financial reserves for emergencies. No one knows if your business idea will work out. Especially if you give up the security of a main job, there has to be enough money that your existence is not endangered.
Register with KleingewerbeAnmelden.org and other service portals you can get detailed information on self-employment. Now let's take you from initial considerations to successful business registration.
Get the small business registration form online now.
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