If you are an entrepreneur looking to open a business in Germany, then you are at the right place. We are about to show you 3 important tips about starting a company in the most economically successful country in Europe. We are about to tackle some topics that entrepreneurs rarely look into.
Before you even make the first step toward opening your company, it is important to do some research!
1. The Importance of Market Research and Planning
The secret of every successful entrepreneur is thorough research and planning. Germany is one of the strongest economies in Europe and there are plenty of business opportunities to explore. Coming up with a comprehensive strategy is a challenging task but it is certainly worth it.
Start writing down some questions you should focus on about your future company. Below, we have listed a few questions that are going to help you do further research.
What are Your Aims?
- What type of product or service do you want to offer in Germany?
- Do you want your company to be a partnership, a limited liability company or a joint stock company?
- Do you plan to expand only in Germany on the long term or to explore other international markets in the future as well?
What is Your Company About?
- What are the main reasons people should buy your product or service?
- Have you already found a market gap for your business?
- How much competition is there for you in Germany?
- How are those competitors doing at the moment?
How Prepared are You?
- Are you going to be comfortable with securing payments for your products?
- Which one is the best city or region for you to start?
- Are you going to be able to find good agents, partners or distributors?
- How are you going to reach your target audience in the market?
The most important thing to do beforehand is to do your best in answering the questions above.
2. Hiring Employees in Germany
Once you have your business registered and your employees hired, you need to become familiar with the insurances and taxes that come with it. Before you even hire your staff, the first step is to register to the Federal Employment Agency in Germany.
Every company has to keep track of a payroll, which is what you will get an 8-digit company number for. As a business owner, you can only hire employees with an employment contract. Then, they are fees for health insurance, nurse care, social security and unemployment insurance that have to be paid.
Your employees also belong to a certain tax class. Based on that, you can calculate the income tax. In addition, there are solidarity surcharge tax and church tax as well.
3. Finding Good Bookkeeping Services
Finding a bookkeeping service in Germany is something you really need to take your time with. Just like with any other product or service, you need to take a look at the reviews and general reputation. There are different types of bookkeeping services.
Which one suits your needs? The one that charges you based on annual revenue or the one that only cares about incoming and outgoing transactions?
You also need to be aware of the best software available for bookkeepers. If they are using Agenda or Datev, they probably know what they are doing. Strive to find a company that is simple. When it comes to delivering transaction receipts and invoicing, they need to be quick and straightforward.
