Establish a company: Step-by-step to a sole proprietorship
One can have many intentions for starting their own business: Some have the apparent "mega" business idea, yet others want to monetize their skills as part of a service business. And then there are those who want to sell something on the Internet. The possibilities are (almost) endless when starting your own company. But how can you [...]
But how can you start your own company? In bureaucratic countries like Austria, many people are afraid of the mountain of forms and registrations they seem to face. We would like to prove that you should not be afraid of this in the following step-by-step guide.
Within the framework of our 2019 Money Making Specials we show in this article how to start a company.
Content
When do you start a company?
A good idea is usually not enough to start a company.
Since a company foundation confronts the founder with many, sometimes large and time-consuming tasks, the company should only be founded once everything has been thought through and planned.
So before you start (register) a company, all doubts and questions should be cleared out of the way. A business plan is suitable for this purpose.
The business plan is sometimes called a "roadmap" - after all, it is supposed to represent the plan from the registration of the company to its establishment. Modern business plans are divided into 2 parts.
The 1st part is the text part: Here, within the framework of a text, it is written down what the company will do. All relevant information must really be integrated - from future competitors, to the company's own idea, to marketing and sales planning.
In the 2nd part come numbers. So while in part 1 you are also allowed to "dream and fantasize" a bit, here it's all about the hard numbers: Where does the money come from? How is each division financed? How much time do I have to get into the black? (etc.)
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What Before starting a company, one should consider?
No matter what type of business it is, every future entrepreneur should consider a few things.
A very important question, for example, is that of competition: How many potential competitors do I have? As a newcomer, do I stand a chance against these companies? If so, what do I have to do to stand a chance?
Also not to be forgotten: The USP (Unique Selling Point)! What can I do better than others? Why should customers come to me and not to someone else?
Capital should also always be considered: Do I have enough money to afford a "bad phase"? Do I need outside capital?
Last but not least: How much do I believe in my idea? Does my idea really have what it takes to be successful?
Advantages & Disadvantages of entrepreneurship
Many people have certain ideas about their own sole proprietorship.
Therefore, let's look at the main advantages and also disadvantages of any self-employed person.
Advantages
In the 1-man business you are your own boss. You can do what you want - when you want. So you don't have to let others talk you into anything.
You can be creative and give free rein to your ideas, whereas in normal employment you often have little room for maneuver.
A self-employed person is the architect of his own fortune.
You can implement new things quickly because you don't have anyone above you who has to sign off on new ideas first.
If you are successful, you have the chance to earn a lot of money faster.
Disadvantages
Weekly working hours of 60 hours or more are not uncommon.
You can become "addicted to success" and focus only on your own company. In the long run, this leads to psychological stress.
You are only dependent on your own work. Once you're sick, you can't work - and you lose money in the event of an emergency.
If you put all your eggs in one basket or if your own product is poor, things can go downhill quickly.
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Step-by-step to becoming a sole proprietor
1. planning
As mentioned above, good planning is half the battle.
Therefore, as a first step, we recommend the creation of a business plan with a solid future and financial plan.
It is important that no questions are left unanswered and that it is explained in detail how the company is to make money, where the strengths and weaknesses lie and where one sees the potentially greatest risks.
After creating this plan, it's best to eliminate the risks - one item at a time - or at least make further plans in case one or two things don't work out the way you might want them to in the beginning.
When planning, the entrepreneur also defines whether he or she wants to register the company as a main or sideline business.
2. legal & company form
After everything is so far so well planned, it's time to prepare.
What form should the company take?
The most popular legal forms are limited liability companies, general partnerships, GsbRs or sole proprietorships.
Most people in Austria start out as sole proprietors. This legal form is well suited for all those who prefer to dispose of their business alone.
The advantage is that you are the sole owner of the company - you have full control, but you can employ other workers in the company as normal.
However, a sole proprietor also bears the full risk and is liable without limitation (!) with his own private assets for the debts of the sole proprietorship.
To establish a sole proprietorship, you must register a trade. This can be done at any district administration office.
The advantages of the legal form "sole proprietor" are also that one is excluded from the classic compulsory commercial insurance with the small business regulation and up to an annual turnover of 700,000? no income-expenditure accounting has to take place.
3. register company
All legal questions clarified? Ready for entrepreneurship? Then the time has come to register the company.
For the business registration at the responsible BH you have to take some things with you, or prepare them:
- Passport or birth certificate (or residence permit for non-EU citizens)
- Confirmation of registration (if residence abroad)
- exact designation of the trade & future location
- for regulated trades, certificate of competence (e.g. master craftsman's examination, degree, etc.)
It is also possible to register your own business in the Chamber of Commerce or by mail / Internet.
After all important documents have been received by the authority, the entrepreneur may start commercial activities.
4. gain first customers
In order to attract the first customers, as an entrepreneur you need to attract attention.
In principle, it does not matter whether you are a hairdresser, a carpenter or a web designer. Winning your first customers works best with advertising.
In the age of the Internet, online advertising works best. With Google Ads, for example, it is possible to advertise for previously defined search terms.
Of course, you have to spend some money for such advertisements.
For the best marketing ideas, we recommend the free paperback from Gründer.de. The authors show how even small businesses can use simple means to advertise and generate their first customers.
Free of charge: The best book for founders
(with info on ideas, funding, planning, marketing & more!)
To the pocket book for founders
Conclusion: Establish company
The process of setting up a company in Austria is actually quite straightforward. A visit to the authorities or the WKO is sufficient.
However, it is much more complicated to create a successful company from scratch.
Therefore, every new entrepreneur should prepare a sophisticated business plan before even registering the company or looking for the first customers.
The competition should also be analyzed very carefully in the beginning.
In addition, you should have a clear idea of how the company should look in 1 or 2 years. The better the planning at the beginning, the fewer problems you will have later on.
