Successful start-ups in Berlin - Guide for non-German business founders
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Guide for non-German business founders
Successful start-ups in Berlin
Overall coordination The event is financed by the Berlin Senate Department for the Econo- Cooperation partners
my, Technology and Women‘s Issues and the Investitionsbank Berlin
2 Foreword
Dear Business Founders,
As future entrepreneurs you will make an important contribution to Germany. Non-German
companies are creating new jobs and therefore providing hundreds of thousands of people
with a livelihood and prospects for their life and families all over Germany and especially in
Berlin.
Through new concepts and start-up projects you enrich the landscape of companies based in
Germany and promote the integration of other cultures in society. This must be encouraged
by preparing and securing start-ups properly. The lack of appropriate information for people
setting up businesses must be remedied using a targeted range of consultancy services with
intercultural expertise. Long-term support is often also required during the strategic planning
phase and people interested in setting up a business should be made more aware of finan-
cing instruments with low capital requirements.
As in previous years, special events for people of foreign origin wishing to set up a business
have been sponsored by the Berlin Senate Department for the Economy, Technology and
Women‘s Issues and realised by select migrant organisations. Over 800 interested parties
received initial information about business start-ups in eight languages at these one-day
seminars. Many of them are now successful entrepreneurs. This brochure offers you an initial
overview as a future entrepreneur. Use this brochure to plan your independence and obtain
more information and advice from your ethnic community‘s business institutions and bodies.
As in past years, we at BWK BildungsWerk in Kreuzberg will share our knowledge and experi-
ence with you beyond these seminars, if required.
We wish you the best of luck in realising your project.
Nihat Sorgeç
Managing Director of BWK BildungsWerk in Kreuzberg GmbH
Successful start-ups in Berlin - 2011 Guide ©BWK GmbH
Foreword 3
Dear Ladies and Gentlemen,
I am delighted that you are interested in this federal state‘s range of consultancy services.
A start-up requires long-term and careful preparation. However, the chances of success are
good: Berlin is still Germany‘s start-up capital. The start-up boom in Berlin continues unabated:
the highest number of start-ups since reunification was recorded in 2010 with roughly 42,700
new companies. In comparison with other federal states Berlin takes first place again with 124
start-ups for every 10,000 inhabitants. What is especially pleasing is that Berlin is also parti-
cularly attractive to people setting up businesses in the technology sector. Roughly 1,860 new
companies emerged last year in the information and communication sector alone.
People from Berlin of non-German origin play a huge part in this start-up boom. Their share of
start-ups has more than doubled in the last few years. Official statistics show over 14,400 new
start-ups by foreigners for 2010. This means that people without a German passport make up
a good third of all people setting up businesses in Berlin. The share of self-employed with a
migration background was even higher, if you do not count the people of non-German origin
with German citizenship setting up businesses.
Being your own boss is a great opportunity for many people. However, you must be well prepa-
red for such a step and aware of the prospects and risks.
Access to comprehensive information is therefore crucial. Berlin will not let you down in this
respect. My company, other public institutions such as the Investitionsbank Berlin, District
Business Development Offices and many other institutions provide you with important informa-
tion and assistance. Added to this are the specific offerings from ethnic business associations
and organisations, some of whom are also involved in the series of seminars for non-German
people setting up businesses. In this brochure you will find a summary of important addresses
for Berlin consultancy services. Please do not hesitate to contact these institutions; they are
there for you.
I wish you the best of luck with implementing your own ideas!
Harald Wolf
Mayor and Senator for the Economy, Technology and Women‘s Issues Berlin
Successful start-ups in Berlin - 2011 Guide ©BWK GmbH
4 Foreword
Almost 460,000 foreigners from 190 countries currently live in Berlin. Added to these are those
people who already have German citizenship and therefore no longer hold foreign status.
The step towards independence is an important integration and economic policy aspect. Accor-
ding to estimates by the Chamber of Industry and Commerce, the number of non-German tra-
ders in Berlin is roughly 32,000 in total. The number of self-employed people of Turkish origin
alone is estimated at up to 9,000, according to information from Turkish business associations.
And the propensity for start-ups by these citizens is unceasing. In 2010 alone, 14,457 people
of foreign nationality set up a sole proprietorship in Berlin.
These figures show how important self-employed foreign citizens are for the economy in Berlin.
To encourage entrepreneurs with a migration background, Investitionsbank Berlin (IBB) has
been supporting the series of seminars for non-German people setting up businesses for many
years now. In these seminars people receive the basic knowledge needed for their project. The
series also offers participants a great forum for sharing experiences.
The seminars can of course only offer guidance on issues of independence and start-ups. IBB
is at your disposal for more detailed advice about your own livelihood. Anyone who is thinking
about a specific start-up project will find the right contact partner for appropriate financial
advice in our consultancy centre. And if financing is then required we have a broad range of
microcredits, from our start-up programme „Berlin Start“ to our „Berlin Credit“ programme.
I wish anyone setting up a business the best of luck in realising their plans!
Dr. Matthias von Bismarck-Osten
General Representative of Investitionsbank Berlin
Successful start-ups in Berlin - 2011 Guide ©BWK GmbH
Contents 5
1 General information about foreign enterprise................................................................................6
2 The decision: are you an entrepreneur?.......................................................................................7
2.1 Motives for independence – a summary from consultancy.....................................................7
2.2 Personal requirements...........................................................................................................7
2.3 Specialist knowledge..............................................................................................................7
2.4 Commercial knowledge..........................................................................................................7
2.5 Formal requirements for foreign citizens................................................................................8
2.6 General formal requirements..................................................................................................8
3 Business idea................................................................................................................................10
3.1 Start-up or product idea........................................................................................................10
3.2 Start-up options.................................................................................................................... 11
3.3 Market research: needs and demand................................................................................... 11
3.3.1 General needs analysis........................................................................................................12
3.3.2 Sales market analysis...........................................................................................................12
3.3.3 Analysis of specific competitors............................................................................................12
4 Concept to idea: stages of a business plan................................................................................13
4.1 Business plan executive summary.......................................................................................13
4.2 Presentation of start-up idea................................................................................................13
4.3 Presentation of founder........................................................................................................13
4.4 Description of offer...............................................................................................................13
4.5 Location................................................................................................................................14
4.6 Target group.........................................................................................................................15
4.7 Market analysis.....................................................................................................................15
4.8 Competition analysis............................................................................................................15
4.9 Sales measures....................................................................................................................15
4.10 Capital requirements............................................................................................................15
4.11 Liquidity planning..................................................................................................................16
4.12 Profitability planning.............................................................................................................16
5 Financing a start-up......................................................................................................................17
6 Directory........................................................................................................................................20
6.1 Addresses for business organisations and institutions.........................................................20
6.2 Ethnic community addresses and profiles............................................................................21
Imprint.............................................................................................................................................24
Bibliography and recommended reading.........................................................................................24
Successful start-ups in Berlin - 2011 Guide ©BWK GmbH
6 1. General information about foreign enterprise
1. General information about foreign enterprise
Integration is still a hot topic in German Strong regional concentration (districts with of all start-ups in Berlin. The self-employed
society. Although it is often overlooked that a high percentage of foreigners) and strong quota of people of non-German origin is
migrants have been working in Germany for sectoral concentration (hospitality and retail) also significantly above the Berlin average
decades as employees and have therefo- are typical for niche economy businesses. of 14.1%. Unlike with Germans, the start-up
re significantly contributed to our levels of Many successful foreign entrepreneurs, es- dynamics have not slowed down with foreign
prosperity. In addition, they also make an pecially in the second and third generation of citizens; it is just that the start-up environment
important contribution to the national econo- immigrants, can no longer be attributed to the has become more difficult. SMEs signifi-
my as business founders and entrepreneurs, niche economy. Many foreign entrepreneurs cantly contribute to economic and structural
especially in times of strained economic are not restricted to customers of their own development. They respond quickly to new
conditions, by for example creating numerous nationality; there is also a reorientation to- technical and economic changes. Small and
new jobs. Above all though, company start- wards German customers and thus a change medium-sized enterprises constantly prove
ups contribute to stabilising the situation on from „niche to market“. to be a stabilising factor on the employment
the employment market by creating new jobs. market, particularly in times of economic
Today, roughly 470,051 people with non- weakness. The Federation and Federal State
The number of foreign entrepreneurs in Ger- German citizenship live in Berlin; this corre- of Berlin therefore support the foundation of
many has been constantly growing since the sponds to 13.7% of the population. Appro- SMEs by providing financial assistance.
start of the 1980s. Out of a foreign working ximately a quarter of the foreigners officially
population of 3.3 m in total over 431,000 registered come from Turkey (111,285),
self-employed of different nationalities followed by citizens from Poland (43,700),
mainly work in the retail sector and hospita- Italy (14,965) and France (13,133). Added to
lity industry and are an important economic this, are a large number of people who have
factor. This corresponds to a self-employed become naturalised over the last few years
quota of 9.6%. In the last eight years the and have therefore only had German citizen-
absolute number of self-employed foreigners ship for a short time. 62,309 naturalisations
has developed more rapidly than the number took place in Berlin between 2000 and 2009.
of self-employed Germans. For example, People of non-German origin are currently
the number of self-employed foreigners the most zealous company founders in Berlin.
increased by 67% in the period from 2000 to According to the 2009 start-up index from the
2008, whereas the increase in self-employed BBB Bürgschaftsbank zu Berlin-Brandenburg
Germans was 20% in the same period. GmbH, foreign start-ups with a quota of
239 start-ups for every 10,000 workers lie
Theoretical explanations frequently used for significantly above German founders with
migrants‘ entrepreneurship include theories 98 start-ups. This means the share of total
that the drive for independence comes from start-ups has increased from 15% in 2003 to
the cultural values and norms of the countries almost 33% in 2009. Entrepreneurial spirit is
of origin. especially pronounced in Polish EU citi-
In contrast there are attempts at an expla- zens, who have the greatest entrepreneurial
nation that give the reason for migrants‘ commitment among non-German nationalities
independence as „market niches“. It is with a share of almost 34.2%. Start-ups by
assumed that specific demand potential people of Turkish origin are slightly higher
and therefore market niches result from the than last year at 13.84%. Over 9,394 busi-
migrants‘ consumer needs that are met by nesses in total were set up by foreign citizens
self-employed people of the same origin. in 2009, which corresponds to a 33% share
Successful start-ups in Berlin - 2011 Guide ©BWK GmbH
2. The decision: are you an entrepreneur? 7
2. The decision: are you an entrepreneur?
2.1 Motives for independence – communication processes, especially ●● How receptive is the market?
a summary from consultancy in the development phase, as they ●● Who are my competitors?
The following arguments are constantly given generally have to first build up trust. ●● What direction are current trends moving
as the basic motives for seeking indepen- ●● Can you motivate staff and partners? in and what do customers really want?
dence in countless consultations with people Are you able to accept criticism from ●● How will the market develop, for example
setting up businesses: customers, etc.? over the next ten years?
●● The desire for indepen- ●● Is your family behind the business
dence and self-realisation idea? Will your family have to cope 2.4 Commercial knowledge
●● Asserting one‘s own ideas with setbacks, disadvantages and Specialist requirements include sound com-
●● Recognising a market opportunity even financial losses, if applicable? mercial knowledge. Even if a tax advisor later
●● Greater respect from the pub- takes on the accounting, business analysis
lic and enhanced prestige A range of general characteristics are and tax process, the person setting up the
●● Wanting to do things better than others continuously mentioned as requirements, business should at least have solid basic
●● A higher, fairer income such as knowledge in these areas.
based on performance ●● Willingness to take risks and motivation
●● Frequent problems in current job, ●● Self-confidence The business founder should also find out
avoiding the risk of dismissal ●● Sense of responsibility about the following areas, among others:
●● Looking for a way out of unemployment. ●● Prepared to work hard ●● Administration/organisation
●● Staying power ●● Marketing
2.2 Personal requirements ●● Charisma and willpower. ●● Raising capital
From a commercial law point of view, apart ●● The company‘s legal form
from a few exceptions, there are no specific ●● Clarify before the start-up: ●● Insurance.
qualifications required to start-up and manage ●● Whether your family is committed The following institutions offer courses,
a company. The entrepreneur unequivocally and 100% behind your project workshops and seminars on most topics to
has the authority to issue guidelines within ●● Who will reliably take over do with start-ups and company management.
the company. This is why personal strengths which jobs at home Attending these events is essential for any
and life experience are also required besides ●● Where you can save time business founder:
commercial knowledge, specialist knowledge ●● Who will be involved in reliable childcare ●● IHK Berlin [Chamber of Industry
and industry experience. ●● How much time you will have to or want and Commerce Berlin], Handwerks-
to invest in your home and family after the kammer Berlin [Chamber of Trade]
Your personal suitability as an entrepre- start-up. ●● Industry organisations and
neur: professional associations
●● Are you prepared to take risks in 2.3 Specialist knowledge ●● Partner organisations from
terms of commercial prudence? Excellent industry knowledge is just as municipal, regional and national
Taking a risk also means knowing important for a person setting up a business start-up initiatives and networks
what you are risking something for. as management experience. You will not get ●● Adult education
●● Are you open to new ideas? anywhere without specialist and industry- ●● Federal employment offices.
●● Do you have energy and stamina related knowledge.
(physical and mental)? Constant stress
due to start-up formalities, working through Do you know what your strengths and
your first orders and acquisition demands weaknesses are?
huge commitment from a business founder. Specialist requirements include commer-
Health problems represent a risk, for the cial (see Section 2.4) and entrepreneurial
start-up company and also partnerships. knowledge. Commercial and entrepreneurial
●● Are you enterprising and capable of making knowledge are essential to successfully sell a
decisions; can you cope with setbacks? good product or a professional service in the
●● What is your behaviour like towards other long-term too.
people (sociable, outgoing, powers of The will to constantly face new challenges is
persuasion)? Anyone who wants to be also particularly important. A company can
successful needs a healthy measure of hardly be managed successfully without a
communication skills. You have to be able minimum of specialist qualifications. No-one
to express yourself in writing and verbally can keep up with the rapid change these
so that what you want to communicate days, let alone draw a profitable use from it
to someone is received as you intended it. without at least being willing to participate in
This also applies to presenting your further training.
business idea, giving reasons for a loan
from the bank and negotiating prices with The business founder should be able to
suppliers. People setting up businesses answer the following industry-related questi-
have to cope with difficult ons:
Successful start-ups in Berlin - 2011 Guide ©BWK GmbH
8 2. The decision: are you an entrepreneur?
2.5 Formal requirements for or carry out a project, leave to remain is issu- Find out whether your planned company is a
foreign citizens ed as an „Aufenthaltsbewilligung“ [temporary trade. In this case you must register with the
The Ausländergesetz [AusIG - German Aliens leave to remain restricted to a particular Gewerbeamt [Trade Licensing Office]. For this
Act] regulates which prerequisites foreigners purpose]. If they are already in Germany and you need an identity card or passport. The
have to meet to take up and carry out a self- have leave to remain a self-employed job may following do not have to be registered with the
employed job. be allowed by changing the basis of the leave Trade Licensing Office: members of the pro-
to remain. fessions (e.g. doctors, architects, tax advisors,
Nationals from an EU member state: An overriding economic interest or specific lo- lawyers, artists, authors), scientists or agricultu-
Freedom of establishment and freedom of cal need must exist with a self-employed job. ral and forestry jobs. Once you register with the
trade applies within the EU member states: The immigration authorities will consult the Trade Licensing Office the following authorities
EU citizens are therefore allowed to set up a responsible institutions (Chamber of Trade, are generally informed about you:
business in any member state. They have the Trade Licensing Office etc.). ●● Tax Office
right to be issued with an „Aufenthaltserlaub- ●● Employers‘ Liability Insurance Association
nis“ [conditional leave to remain] and do not A self-employed job is allowed if ●● State Statistical Office
require a work permit. ●● You have unconditional leave to remain or ●● Chamber of Trade
unconditional and indefinite leave to remain. (with trade professions) or
Nationals from the new acceding states: ●● You are married to a German citizen. After ●● Chamber of Industry and Commerce
For people from the new states acceding to three years of marriage you receive ●● Commercial Court.
the EU, the freedom of establishment also unconditional and indefinite leave to re-
applies to the self-employed since 1st May main. You can turn self-employed at
2004. Nationals from the new acceding states any time. If you want to set up a compa-
have the right to carry out a self-employed ny within the first three years of mar-
job or found and manage a company. They riage you must apply to the immigra-
register their company in the same way as tion authorities.The authorities decide
German nationals. Just like German nationals for each specific application whether a
they must also fulfil the general requirements restriction (stamp: „Self-employment
for access to the profession. In addition they or similar activity not allowed“) is lifted.
must also be capable of doing the planned job ●● As a stateless person you have leave to
(adequate language skills or presentation of remain. If your residence is not in Germany
the business concept). you must make an application for self-em
ployment to the relevant Federal Republic
Nationals from non-EU states: of Germany‘s Foreigners‘ Representative
Nationals from non-EU states, who travel into Board.
the EU for the purpose of a self-employed
job, receive an „Aufenthaltsgenehmigung“ 2.6 General formal requirements
[leave to remain] that is generally issued as Once you have found out whether you meet all
an „Aufenthaltserlaubnis“ [conditional leave to the requirements according to the Aliens Act,
remain]. If they are only staying in Germany you can start to prepare the actual start-up.
for a limited period of time, e.g. to build a plant Formalities also have to be dealt with for this.
Successful start-ups in Berlin - 2011 Guide ©BWK GmbH
2.The decision: are you an entrepreneur? 9
Specific permits and evidence are required for course for employees) by the Chamber of the Handelsgesetzbuch [HGB - German
certain sectors (e.g. trade card, concessions, Trade and Commerce. Commercial Code] you must register it at
etc.) the responsible District Court and have this
Transport industry: The commercial trans- notarized by a notary.
Trade: You may only manage a trade compa- port of people by bus, hire car and taxi always
ny if you have passed the examination for the requires a permit. The licences for personal Taxes and duties:
master‘s certificate. However, the examina- transport by bus, hire car and taxi are issued Please find out about taxes and accounting
tion for the master‘s certificate can also be by: Landesamt für Bürger- und Ordnungsan- obligations and how to deal with the Tax Office
replaced by an approved exemption [Art. 8 gelegenheiten Berlin, Puttkamer Straße 16 from the Chamber of Industry and Commerce
Handwerksordnung - German Craft and Trade - 18, 10958 Berlin. Berlin. The well-prepared brochure „Steuer-
Code]. A person is only permitted to be self- licher Wegweiser für Unternehmensgründer“
employed in a trade if they are entered in the Itinerant trade: This includes trades that do [„Tax Guidance for Company Founders“] (7th
skilled trades register at the local responsible not have a permanent business premises. issue 2010) is also available for you there.
Chamber of Trade. All important jobs that The responsible local authorities (Office of
make up the core of trade must be entered in Economic Affairs/Trade Licensing Office) Taxes:
the skilled trades register. So-called „craft-like issue the required itinerant trade card. ●● Value added tax
trades“ are an exception to this. ●● Income tax
Freelancers: Anyone who belongs to the ●● Corporation tax
Industry: Plants with particular influence on „regulated“ professions (e.g. lawyers, doctors ●● Church tax
the environment must be approved in ac- or tax advisors) requires certain approvals. ●● Wage tax
cordance with the Bundesimmissionsschutz- The „unregulated“ professions (e.g. artists, ●● Solidarity tax
gesetz [Federal Immission Control Act]. writers, scientists) do not require a specific ●● Trade tax
permit. A specific permit is also required for a ●● Tax allowances
Retail: Specific certificates of competence range of other trades (e.g. a check of personal ●● Other taxes (e.g. property tax)
are required for different areas of retail (milk, and financial reliability by the Trade Licensing ●● Annual tax declarations (once a year)
pharmaceuticals or suchlike). Office): ●● Grace period
●● The provision of gaming devices
Restaurants and hotels: A permit (personal with the chance of winning, the Social insurance contributions:
license) is required, which you receive from organisation of other games with the ●● As the owner and managing partner
the responsible local authorities (Wirtschafts-/ chance of winning, amusement arcades of a GmbH [Ltd. company] you are not
Gewerbeamt) [Office of Economic Affairs/ ●● Estate agents, investment brokers, as a rule liable for social insurance
Trade Licensing Office] after a (one-day) builders and building supervisors contributions. You therefore have to
course at the relevant Chamber of Industry ●● Auctioneers make arrangements for your pension
and Commerce. ●● Pledgers and pawnbrokers provision and health insurance yourself.
●● Driving schools ●● As an employer you are obligated to deduct
Security sector: The prerequisites for the ●● Goods transport, etc. social insurance contributions for your
permit issued by the responsible local au- staff (as a rule every month). For this
thorities (Office of Economic Affairs/Trade Li- Depending on the legal form, your company please get in touch with a health insurance
censing Office) are personal reliability (police must also be registered in the commercial company and/or pension insurance
clearance certificate), the required funds and register at the Amtsgericht [District Court]. company.
assurances and a 40-hour course (24-hour If your business is a company in terms of
Successful start-ups in Berlin - 2011 Guide ©BWK GmbH
10 3.The business idea
3.The business idea
3.1 Start-up or product idea tant factor is the „increasing age gap“. There Realising new ideas in old sectors: So-
It all starts with an idea. You must have an is also evidence of a long-term trend towards called „old established sectors“ can get into a
idea before you undertake any further steps. smaller households. rut over time. A clever new idea can turn even
It does not matter whether it is the result of a the most old-fashioned concept into a compe-
targeted search or a coincidence. Very few Fashions: Fashions are virtually unpredic- titive business idea. However, it is not always
business ideas are totally new. Many suc- table, short-lived preferences or behaviours, easy to come up with these kinds of ideas.
cessful entrepreneurs have simply developed seasonal highlights. Fashion therefore only
existing products and services or obtained results in short-term market opportunities. Using technical developments: Anyone
inspiration from abroad. There are lots of who recognises innovations early can be
different ways to come up with a promising Discovering gaps in the market: Even in sa- almost certain of having a good basis for
business idea: business magazines, political turated markets there are niches that have not their concept. But beware: an invention must
magazines, industry directories, publications been filled yet. You usually require detailed be marketable, otherwise it is just tinkering.
by specialist publishers or by thinking as a industry knowledge in order to identify these. Therefore: market research is essential!
consumer or employee about improving what Although sometimes „common sense“ or your
is already on offer. own experience are enough. Profiting from specialisation: Even old
When looking for an idea find out about well-known business ideas can suddenly gain
current business, technology and social Copying successful concepts: In other sec- new impetus with a little twist. Anyone who
developments. tors and countries there are plenty of business can set themselves apart from the competition
ideas that have already proved successful. with their offer or special service is laying the
Recognising new trends: Structural change These can often be transferred. People who foundation for business success.
often happens very suddenly. Only those who copy ideas are often setting up a low-risk
quickly recognise changes and respond to business. The franchise idea is based on this
them specifically and at the same time sen- concept.
sitively can profit from them with a business
idea. As a franchisee, you profit from others‘
expertise in return for payment. Be aware of
Population development: Changes in popu- potential copyright or other industrial property
lation structures provide important information right issues.
about market opportunities. The most impor-
Successful start-ups in Berlin - 2011 Guide ©BWK GmbH3. The business idea 11
3.2 Start-up options the company wants to operate. The market sources: official statistics, information sources
Having a good idea is one thing but success- is a dynamic, constantly changing process. from the Statistische Bundesamt [German
fully implementing it is another! You can It needs to be continuously reanalysed. No- Statistical Office] or Statistische Landesämter
●● Develop new products or processes netheless, the initial analysis with the derived [State Statistical Offices], information from
●● Exploit new markets or sources market-entry strategy is the most important business associations, specialist literature,
●● Work in new forms of organisations, etc. step for anyone setting up a business. Later general business press, databases and the
market research and analysis is based on this. internet. Even with very thorough market
Choose one start-up from the following You can carry out these analyses as primary analysis you should assume differences in
options: or secondary research. practice. For this reason you should always
●● New start-up seek advice from experts for any action that
●● Takeover of existing business is associated with high investment (e.g.
●● Investment in a company business consultants, market researchers, tax
●● Self-employment as part of a franchise. advisors).
3.3 Market research: Primary means you carry out the analysis
needs and demand yourself by means of personal meetings, inter-
Besides the creation of a product or service views, surveys, observations, etc. Secondary
what is important for entrepreneurial success means that you rely on several sources. The
is accurate knowledge of the market in which following can be considered as external data
Successful start-ups in Berlin - 2011 Guide ©BWK GmbH12 3. The business idea
3.3.1 Analysis of general needs 3.3.2 Sales market analysis
01 Who are your customers? 01 What share of the market and turnover is possible for you (size of
02 Where are your customers? sales area, if applicable buying power, market data)?
03 How do the individual customer segments break down according 02 What is the price level on the sales market?
to age, gender, income, profession, buying behaviour, private or 03 How expensive is your product/service compared to other similar
business customers? offers?
04 Do you already have reference customers? If yes, who? What 04 Are you dependent on major customers?
short-term and long-term turnover potential is associated with 05 Do you already have contacts to buyers?
them?
05 Are you dependent on major customers?
06 What needs/problems do your customers have? 3.3.3 Analysis of specific competitors
07 How do your customers find out about your product/service? 01 Which competitive companies or products are you up against?
08 Are there other developments in „your“ direction? 02 What are the specific benefits or weaknesses of competitive offers
09 Who are your competitors? compared to what you offer?
10 How much do your products cost from your competitors? 03 How many competitors exist in your catchment area?
11 Where do they offer their range? 04 Which competitors are likely to appear soon (copycat effect)?
12 Why have you decided on this location? 05 Who is the market leader?
13 How will the location develop in future? 06 What risks originate from major chain stores, market leaders, etc.
14 How ready is your product/service for the market (risk of launching (expansion/price policy)?
onto the market too soon)? 07 Compile a summary on: turnover, staff numbers, location, age and
15 What benefits does your product/service offer your customers? other competitors‘ criteria!
Why should they buy it?
16 Why have other companies not already had this idea and imple-
mented it? What market resistance existed/exists?
17 Is there regular or only occasional work (seasonal)?
18 Is there a long-term need for this product/service?
19 Can the product/service be replaced by comparable products/servi-
ces?
Successful start-ups in Berlin - 2011 Guide ©BWK GmbH4.Concept to idea: stages of a business plan 13
4.Concept to idea: stages of a business plan
Besides the business concept, the business ●● What product/service do you want to Define your offer in terms of target groups,
plan includes a description of personal qualifi- produce or sell? summarise this into a product or service
cations, business data, market and competi- ●● What is special about your offer? range:
tion analysis, marketing strategy and outline Start of production/service? Develop- ●● Are you offering a broad range? (a limited
of future prospects, projected balance sheet, ment status of your product/service? selection of several article groups).
projected profit and loss account, capital ●● Which prerequisites have to be met right ●● Are you offering a deep range? (a few
requirements and financing plan and liquidity from the start? article groups in several designs and custo-
forecast. ●● When can the product be marketed? mised sizes).
●● Which development stages are still neces-
4.1 4.1 Business plan executive sary for your product? Are you a generalist or specialist?
summary ●● When can a pilot series be issued? Beyond the actual offer you should also offer
A business plan executive summary conveys ●● Who is carrying out the testing process? your customers an additional benefit compa-
everything that the reader needs to know ●● When will the potential patenting process red to competitors; this could be service offers
about the business plan in a concise form, wit- be concluded? or customer services. Generally, customisa-
hout having to read the whole document. The tion adapted to individual customers’ wishes
following main business plan section should 4.3 Presentation of founder with appropriate flexibility is an advantage.
explain the summary in more detail but with ●● What qualifications/professional experi-
no surprises. The executive summary is the ence and if applicable permits do you have?
most important part of a business plan. This is ●● Do you have detailed industry knowledge?
where you have to grab the reader with your ●● What commercial knowledge do you have?
idea so that they want to read on. Remember How do you intend to expand your know-
it is often only the executive summary that is ledge (courses etc.)?
read. It is good practice for briefly presenting ●● What are your strengths?
your company (to customers, banks, analysts, ●● What are your shortcomings? How will you
etc.). compensate for these?
4.2 4.2 Presentation of start-up 4.4 Presentation of offer
idea Check the novelty value/degree of maturity
Until now you have more or less had a clear of your offer (product/service):
vision of your start-up idea. By analysing this ●● Do customers recognise the
idea in your market research you have been benefits of your offer?
able to highlight the success factors. Now ●● Is the offer ahead of its time
define your goals and work out your strengths or already out-of-date?
and weaknesses!
Successful start-ups in Berlin - 2011 Guide ©BWK GmbH14 4.Concept to idea: stages of a business plan
Pricing your product: ximity to customers, transport links, quiet or When choosing your business premises ple-
Your range of offers is directly related to your central location need to be particularly closely ase observe valid workplace regulations and
pricing policy. Your mission should be „diffe- examined for your own start-up. guidelines. They specify:
rent to others“ and not „cheaper than others“! ●● Room dimensions/heights
This does not rule out occasional price con- Consider the following points when choo- ●● Room temperatures/ventilation
cessions later. Even if you establish that your sing your location: ●● Exposure to light /lighting
price is below the market price by means of ●● Suitable location (central, out of town or in a ●● Lines of sight
your calculation, as under the circumstances start-up or commercial centre) ●● Traffic routes
costs for business premises and personnel ●● Proximity to customers ●● Toilets, washrooms, recreational rooms and
do not apply yet, you should check whether ●● Proximity to cooperating companies/orga- changing rooms
these costs must at least be calculated into nisations (e.g. suppliers) ●● Noise levels.
your sales price. It is likely to be much more ●● Proximity to competitive companies
difficult to enforce higher prices on customers ●● Transport links to customers and suppliers Industry regulations, accident prevention
later on. ●● Adequate parking facilities regulations, the emission protection limits of
●● What price strategy is reasonable for your ●● Good supply of goods, consumables, the Technical Instructions on Noise Abatement
company (upper, mid-range, lower price energy, etc. (TA Lärm) and Technical Instructions on Air
bracket)? ●● Proximity to qualified personnel Quality (TA Luft) also influence your normal
●● What are major customers‘ price expecta- ●● Favourable rents operation. You can obtain the regulations
tions in your sector (retail chains / influential ●● Official requirements. valid for you from the responsible Berufsge-
production companies)? nossenschaft [Employers‘ Liability Insurance
●● Are customers‘ delivery and payment Ask the responsible urban planning office Association] and the Gewerbeaufsichtsamt
terms and conditions to be accepted? about how the area where you intend to start- [Trade Supervisory Board].
●● Is your own pricing restricted by up your business is identified in the urban
the recommended retail price? development plan. If it is in a commercial or
industrial area, your start-up is not usually
4.5 Location at risk as a result of building regulations. On
Location plays a crucial part in company suc- the other hand, if your planned location is in
cess. Depending on the industry and company a residential or mixed area you should check
size you have to therefore establish which of whether anything stands in the way of you
the different location factors, for example pro- setting up your business there.
Successful start-ups in Berlin - 2011 Guide ©BWK GmbH4.Concept to idea: stages of the business plan 15
4.6 Target group It is difficult for people setting up a business, 4.10 Capital requirements
Which target group do you want to offer who have little or no industry knowledge, to How much money do you need for your start-
your products/services to? obtain information. Therefore use the following up? How high are your capital or financing
So far you have clearly defined your offer. You options: requirements? Think very carefully, as good
are now determining your potential custo- ●● Press publications (business and spe- financing is the basis for successfully and
mers using target group analysis. Remember cialist magazines, association news) securely building up your company. Always
though that your customers, e.g. sales part- ●● Industry directories (including the Gelbe talk to an advisor about all financial matters
ners, are not always the same as the actual Seiten [Yellow Pages]) (also with the Chamber and in particular with
end consumers/users. The customer is often ●● Own research: trade fair visits, test your bank)!
the person that makes the decision to buy! purchases, company tours
You should clearly define and differentiate ●● Talks with suppliers, customers, analysis First of all work out the amount of invest-
between your potential end customers and the of product range ment required:
„decision-makers“. ●● Analysis of catalogues, delivery and pay- ●● How much money do you need in the long-
ment terms and conditions, etc. term (e.g. land, building, machinery, vehic-
For example, work out in the target group ●● Internet research. les, etc.)?
analysis: ●● How much money do you need in the short
●● Which target group is being addressed? 4.9 Sales measures to medium-term (e.g. for setting up the first
●● Who belongs to the target group Companies try to develop possible customers materials and goods storage, for outstan-
(age, income, consumer lifestyle)? into actual buyers and make a sufficiently high ding debts and special expenditure in the
●● How does it develop? number of potential customers aware of their start-up phase)?
new business/product using effective sales ●● Budget a financial reserve for the
4.7 Market analysis measures. All measures aim for the most unforeseeable!
See section 3.3 „Market research“ effective impact possible on the market.
You not only have to react to existing market
4.8 Competition analysis conditions but you also have to be proactive
Your competitor is frequently able to cause yourself! You achieve this using marketing
you problems as a result of their established measures. Marketing means much more than
market position. Therefore familiarise yourself just advertising. It is the systematic search for
with the competition situation. Expand on it and early detection of possible market oppor-
in your project presentation. Identify your com- tunities. Marketing creates the link between
petitors using the following: supply and demand.
●● Number, name and location of competitors
●● Competitors‘ market positions (part of a
corporate group, chain, individual)
●● Financial performance
●● Range, quality, target group
●● Possible responses (advertising, change of
assortment, pricing)
●● Influence on suppliers, behaviour towards
buyers, suppliers, personnel.
Successful start-ups in Berlin - 2011 Guide ©BWK GmbH16 4.Concept to idea: stages of the business plan
Investment to establish readiness to perform: 4.11 Liquidity planning
Grundstück i.H.v ......................... € The liquidity plan gives you an overview of
Gebäude i.H.v ......................... € your monthly incomings and outgoings. The
Umbaumaßnahmen i.H.v ......................... € principle of a liquidity plan is quite simple.
Maschinen, Geräte i.H.v ......................... € Record the time and amount of all your
Geschäfts- bzw. Ladeneinrichtung i.H.v ......................... € incomings and outgoings. You will only remain
Fahrzeug LH.v . ....................... € liquid if your total incomings are higher than
Reserve für Folgeinvestitionen und i.H.v ......................... € your total outgoings for each period. If you
Unvorhergesehenes i.H.v ......................... € establish that you have more outgoings than
Gesamt i.H.v ........................ € incomings, for example in the start-up phase,
you must take this lack of liquidity into account
Für die Leistungserstellung notwendiger Kapitalbedarf: in your financing plan.
Roh-, Hilfs- und Betriebsstoffe i.H.v ......................... €
Unfertige Erzeugnisse bzw. Leistungen LH.v . ....................... € Pay particular attention to the following:
Fertige Erzeugnisse und Waren i.H.v ......................... € ●● Are your outgoings always lower than your
Forderungen / Außenstände i.H.v ......................... € incomings?
Reserve für besondere Belastung in der Anlaufphase i.H.v ......................... € ●● How many days or weeks do you have to
Gesamt i.H.v ........................ € pay your suppliers‘ outstanding invoices?
●● When can you invoice your customers?
Gründungskosten ●● When can you actually count on incoming
Beratungen i.H.v ......................... € payments?
Anmeldungen /Genehmigungen LH.v . ....................... € ●● How high is your monthly or quarterly
Eintragung ins Handelsregister i.H.v ......................... € amount payable (value-added tax minus in
Notar i.H.v ......................... € put tax) that has to be paid to the Tax
Gesamt i.H.v ........................ € Office?
Kapitaldienst 4.12 Profitability planning
Zins- und Tilgungskosten i.H.v ......................... € With the profitability forecast you obtain the
Privatentnahmen i.H.v ......................... € answer for the first time as to whether there
Gesamter Kapitalbedarf i.H.v ........................ € will be a plus or minus on the bottom line
of the balance sheet at the end of the first
financial year.
A profitability forecast is generally compiled
for the first three financial years. You must
definitely assume that the figures will not
be one hundred percent correct, as you are
working with projected figures. Your future
lender of capital (banks) also cannot make
any predictions about whether this budget is
right. It is therefore better to budget for the
future cautiously! A projected loss in the first
financial year does not immediately hail the
end of your start-up. However, if you are still
generating a loss in the third financial year,
you should start to give this some thought!
You calculate the profit or loss by subtracting
all the outgoings from the incomings for that
financial year.
Successful start-ups in Berlin - 2011 Guide ©BWK GmbH5.Financing a start-up 17
5.Financing a start-up
Based on experience, starting up a self- the share of bankruptcies is particularly high working capital and investments. Land, ma-
employed job requires an initial investment among young companies and people setting chinery, stock and company takeovers can be
in the majority of cases, whether material up businesses generally cannot provide suf- financed with a flexible term. The programme
investment such as machinery or vehicles or ficient securities to cover the risk. As a result can also be used for the advance financing
working capital for stock or market-entry costs. risk surcharges are applied to interest rates. of orders.
However, people setting up a business can This in turn does not make bank financing
very rarely cover the capital required for these very attractive to people setting up busines- Berlin Start: For start-ups and investments
investments using their own funds, after all ses as the financial burden will be too high in in the first three years of self-employment
not everyone saved up a fortune when they the start-up phase. you can apply for an amount up to EUR
were young or came into a large inheritance. 100,000.00 for the financing of working capital
It is therefore generally the case nowadays For this reason there is a range of public sup- and stock and also for company takeovers.
that start-up projects are financed mostly port programmes for start-ups, which serve The term is 6 - 10 years. Berlin Start always
using borrowed capital. But what is this and, the purpose of reducing the banks‘ risks due issues funds in combination with a bank gua-
more importantly, where does this borrowed to a lack of securities when financing start- rantee from BBB Bürgschaftsbank zu Berlin-
capital ideally come from? ups and alleviating the financial burden for Brandenburg GmbH to ease the provision of
business founders, for example using interest its own securities.
Financing by your bank subsidies and limited repayment deferments.
The first stop in the search for capital often Besides this, there are grants for certain Microcredit from the SME fund: You can
takes you to a bank. Some credit institutes investments or research and development apply for a credit up to EUR 25,000.00 with
have set up special offers or advice centres measures. If you plan to claim any grants a term of 5 years (first six months with no
for people starting up a business. Banks there are several key features you should pay repayments) for the co-financing of start-ups
make their credit decision first and foremost attention to. For example, the location of the and new companies, company expansion and
based on whether they consider your concept start-up company or even the industry can be takeovers, but also for advance financing of
to be plausible and the risk of issuing credit crucial here. It should also be noted that the concrete orders. Credit is issued in a simple
can be covered by securities. Credit repre- grants must generally be applied for before application procedure and aims for a much
sentatives not only check the business idea, the start of the project. quicker credit decision.
market potential and due care in planning
but also your personal competence as an Support programmes for business found- Different prerequisites and procedures apply
entrepreneur, your motivation, creativity and ers from the Investitionsbank Berlin (IBB) to the application and approval of IBB funding.
powers of persuasion. Your fortitude in difficult IBB has a whole range of offers available for The details for the three examples can be
situations and how you deal with money can companies in the start-up phase. The support found on the IBB website:
also be important criteria. programmes provide young Berlin companies www.ibb.de/gruenden.
with customised loans.
Under purely market economy conditions, the In general, it should be noted that the loan
financing of start-ups is fraught with problems. Berlin Kredit: Start-ups and existing com- usually has to be applied for before the start
They are relatively high risk for banks, as panies are supported with the financing of of your project. You can find out whether a
Successful start-ups in Berlin - 2011 Guide ©BWK GmbH18 5.Financing a start-up
support programme is right for you and your KfW Start-up Money: You can finance ERP regional support programme: You
project, which combinations and alternatives investments and working capital for start-ups can profit from this programme as a business
are available and whether you can claim parti- in Germany using KfW Start-up Money. You founder, national or foreign industrial com-
cular versions in a personal meeting. You can can profit from this programme as a business pany or freelancer. Your company must be in
arrange an individual consultancy meeting founder, freelancer or small company, if you majority private ownership and meet the EU
with the IBB‘s Business Support Customer have been active on the market for less than Commission‘s criteria for small and medium-
Advice Department by calling the IBB hotline 3 years and your financing requirements for sized enterprises (SME).
(030/2125-4747). investment and working capital do not exceed
EUR 50,000.00. Consolidation measures can
You can also obtain an overview of relevant also be supported within 3 years of starting up
programmes and application procedures eve- your business.
ry first Thursday in the month from 2.00 pm
to 4.00 pm at an information event. For this Features: Features:
please register by calling 030/2125 4747 or by ●● 100 % financing ●● Attractive fixed interest rate over 10 years
email to kundenberatung.wirtschaft@ibb.de. ●● 80 % indemnity against liability for your ●● Particularly favourable interest rate for
bank making access to a loan easier small enterprises (SE)
Support programmes for business found- ●● Grace period during start-up ●● Long terms up to 20 years with up to 5
ers from the KfW Bankengruppe ●● Support for a side business too, if it is to years grace period in the start-up phase
Almost all national state support programmes become the main source of income in the ●● Can be combined with other grants
are granted in Germany via the state‘s own medium-term
KfW Bankengruppe based in Frankfurt. In the ●● Early repayment possible at any time free It is important to note with the application for
process it is irrelevant whether the support of charge the KfW Mittelstandsbank‘s programmes that
is for renewable energies, private housing these are granted exclusively by regular com-
construction, SMEs or start-ups. For the latter, KfW Entrepreneur Loan: You can finance mercial banks. Therefore, if you would like to
support programmes are granted by the KfW or make up for temporary liquidity shortfalls apply for credit from KfW Mittelstandsbank
Mittelstandsbank. As already mentioned, the using the KfW Entrepreneur Loan. The you have to do this through your own bank.
advantages are a very low interest rate as financing of start-ups is also possible. The You must apply for all programmes at your
well as the option of being able to use certain prerequisite is that your project can expect own bank before you invest.
support programmes without the bank‘s sustainable success. For this, you receive
usual securities. Detailed information about borrowed capital at low interest rates. Microcredit fund: Business founders can
the individual credit programmes and their take up microcredits at GLS Bank. Support
conditions can be accessed directly online at Features: then follows through a micro-finance institute
KfW Mittelstandsbank at the address www. ●● Particularly favourable interest rate for of your choice. These offer different focuses
kfw-mittelstandsbank.de. These programmes small and medium-sized enterprises and also different language expertise. Target
in particular are of interest to you as business ●● Up to 20 years fixed interest rate groups are small new companies that do not
founders. ●● 50 % indemnity against liability for your receive any credit from their own bank. These
bank specifically include business founders with a
●● Can be combined with other KfW program- migration background and women.
mes and public grants
Successful start-ups in Berlin - 2011 Guide ©BWK GmbH5.Financing a start-up 19
Features: relevant employment agency or job centre will
●● Short terms: maximum 3 years inform you about the more detailed conditions
●● Small sums, after the first few success- and application requirements. Please note
ful repayments up to max. EUR 20,000 that you should first talk to your case manager
●● No fees before you register your business!
●● Unscheduled repayments possible
●● 100% of the amount paid out
Financial support by employment agenci- Equity financing
es and/or job centres Innovative and technology-based companies
If you were unemployed before your start- in particular often require equity financing for
up, the employment agency (for recipients of establishment and growth. This means that an
unemployment benefit I) or the job centre (for investor, who is convinced by your business
recipients of unemployment benefit II) will also idea, acquires a share in your company. Other
support you with your start-up project. You standard terms are venture or risk capital.
must present the responsible case manager Venture capital companies that engage in
with a statement about the start-up project by early phase financing (seed stage, start-
a competent body (viability certificate) as well up) are particularly interesting for business
as evidence of your personal knowledge and founders. Venture capital issuers only invest
skills. Recipients of unemployment benefit I in companies that have high growth potential.
can apply for a start-up grant. The prerequi- It is expected that your company‘s value and
site is that the right to unemployment benefit therefore the investor‘s share will increase by
I still exists for at least another 90 days (date 20-50% in a year. The aim of equity capital
of application). The amount of the previously issuers is to sell their shares in your company
paid amount is still paid for a period of 9 after 3-5 years for the greatest profit possible
months, plus a flat rate of EUR 300 a month to either the business founders themselves,
that is to be used for social insurance. You other investors or companies or as part of
can then apply for the flat rate of EUR 300 an initial public offering. For several projects,
only for another six months. equity capital is the only sensible option to
acquire capital for establishment and growth.
Recipients of unemployment benefit II can They avoid you getting into debt too much
apply for reintegration benefit. The amount yourself as the investor carries the risk them-
of unemployment benefit II is still paid, plus selves as the co-owner. There are no interest
50% of this standard benefit and + 10% for and redemption payments to negatively affect
every other member of the shared household. your profitability and liquidity. In return, the
The grant term is usually 12 months; however business founder gives up a share of their
an extension by another 12 months is possi- company. This also means granting your new
ble. The entitlement ceases if the recipient is partner certain rights to information and co-
no longer classified as in need of help. Your determination.
Start-up information online
The most important information that people setting up a business need can also be
found online. We recommend the Federal Ministry of Economics website with general
information about legal issues, the business plan, financing and lots of check lists and
support tools (www.existenzgruender.de).
Information specific to Berlin can be found on the website www.gruenden-in-berlin.
de. Industry specific information that can be found here is supplemented by extensive
databases on Berlin consultancy services and event information. Non-German business
founders can search for offers in their language and institutions and events are featured
that may answer their specific questions.
Information about the German business founder and entrepreneur days can be found at
www.degut.de. Here you can find all relevant information about the business founder
trade fair „degut“. Business founders can visit seminars and workshops here, share
ideas with other people setting up businesses and benefit from the experience of many
consultants and successful entrepreneurs.
Successful start-ups in Berlin - 2011 Guide ©BWK GmbHYou can also read
