Starting a business in Germany – 10 things you should know as an expat


Tips to avoid making mistakes as a new expat entrepreneur in Germany

Do you have a brilliant business idea you would like to turn into a successful business in Germany? That already is an awesome start! Because starting your own business, especially as a foreigner in Germany, comes with challenges and you will need your inspiration and motivation to keep you going. To secure a successful start, you should avoid making unnecessary mistakes.

1. Don’t forget to check your German visa-status 

In Germany, not every visa allows you to start a self-employed career, so check whether you have to convert your visa and which requirements you have. Here you need to distinguish if you would like to become a freelancer or found a start-up. Depending on this you will need to prove several things to the authorities. 

2. No business without a business model  

A business model is your rock-solid foundation for your soon-to-be business! Even if you don’t need funding, the business model is your roadmap for your success as an entrepreneur! By creating your business model, you clarify questions about your added value, your target group, several key factors but also your revenue stream and your cost structure.  

3. Don’t mix up your culture with German culture!  

You think your business idea solves a huge problem or covers a need, but make sure, that this is also valuable for the German audience. To discover if it can be successful start a market analysis. This is an analysis of the economic opportunities for selling a specific product in a given market. You could start with a survey followed by deeper researches.   

4. Choose the legal form wisely and check which legal requirements you have to follow 

Don’t pick the legal form only by criteria such as costs or bureaucracy! The legal form you choose needs to be trustworthy for your clients. To figure out which legal form fulfills the demand you need to know who your target group is. Depending on your trade and your target group the most common legal forms in Germany for example are the GmbH or the Einzelunternehmen. 
Depending on your business you need to obey several legal requirements. If you disregard them you can get problems and you may also need to pay a fine. Legal requirements are for example special licenses for business, but also mandatory information on invoices, the information you need to show on your homepage, and more.  

5. Find yourself some experts  

Depending on your business you will need some experts to give you professional advice. As the tax system in Germany is not that simple getting yourself a good tax advisor is highly recommended. There are many different taxes, and also a lot of rules with exceptions and constellations. Maybe you also will need a lawyer to set up your contracts. This is a case-by-case decision and depends on your business model. 

6. Your product price or your hourly rate is not defined by estimation 

Sure, you know that you need to cover your costs and also would like to make some profit, but don’t forget to calculate expenses such as taxes and other fees but also consider that you will have days off and don’t work 24/7. Especially when you start as a sidepreneur because the income of your business affects also the tax of your salary!  

7. Choose your partners wisely 

Choose your key partners by similar visions, values, characteristic qualities, and capabilities and not by nationality or language skills! Finding reliable partners is one of the most important tasks when founding a company. With the wrong partners, the best business idea will fail. Hence take decisions wisely! 

8. Don’t be timid … shout out loud 

Shout out loud! We know, in the beginning, you don’t want to share your business idea with the world, but how should people get to know you and your offer, if you don’t talk about it? How should others recommend you to their community? And also, don’t forget to talk about your vision and the “why”! 

9. Don’t wait with networking 

Depending on your business you need different partners. Start as soon as possible by building up your network! Community building is a process you can’t implement from one day to another – but only a strong community will bring you success! New to Germany and don’t have a business network yet? There are many online communities where you can join, for example, the Expat Freelancer Group.

 10. Don’t be afraid of failing 

Even if you already took wrong decisions, and now realize this, in almost all cases there is a way to adjust them. Being an entrepreneur means making decisions and also taking the risk of making the wrong decisions, but every decision is better than a standstill! Hence, don’t be afraid, you will do great as long as you learn from your mistakes!
In a nutshell, plan ahead, get all the information around the German bureaucracy, decide wisely, and last but not least be excited about your future as a successful entrepreneur!

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