Establish a company: Step-by-step to a sole proprietorship
You can have many intentions for setting up your own company: Some have the apparent "mega" business idea, while others want to turn their skills into money 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 setting up your own company.
But how can you set up your own company? In bureaucratic countries like Austria, many people are afraid of the mountain of forms and registrations they seem to face. In the following step-by-step guide, we would like to prove that you shouldn't be afraid of this.
Within the framework of our 2019 specials on the topic of "Earning money" we show you how to set up a company in this article.
Content
When do you found a company?
A good idea is usually not enough to start a company.
Since founding a company presents 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 set up (register) a company, all doubts and questions should be cleared up. A business plan is suitable for this.
The business plan is sometimes also called a "roadmap" - after all, it should represent the plan from the registration of the company to its establishment. Modern business plans are divided into 2 parts.
The first part is the text section: This is where you write down what the company will do in a text. All relevant information must be integrated - from future competitors and the company's own idea to marketing and sales planning.
The second part is about numbers. So while in Part 1 you can still "dream and fantasize" a little, here it's all about the hard numbers: Where does the money come from? How is each individual division financed? How much time do I have until I want to be in the black? (etc.)
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What should be considered before setting up a company consider?
No matter what type of company 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?
You should also always consider capital: do I have enough money to be able 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 a normal working relationship 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 only focus on your own company. In the long term, this leads to psychological stress.
You are only dependent on your own work. If you fall ill, you can't work - and you lose money if the worst comes to the worst.
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 trader
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 remain unanswered and that it is explained in detail how the company is to earn money, where its strengths and weaknesses lie and where the greatest potential risks are seen.
Once this plan has been drawn up, it is best to eliminate the risks - one point at a time - or at least make further plans in case one or two things don't work out the way you would like them to at 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
Now that everything is so well planned, it's time for the preparations.
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 traders. This legal form is well suited to all those who prefer to manage their company alone.
The advantage is that you are the sole owner of the company - you have full control, but can employ other employees in the company as normal.
However, a sole proprietor also bears the full risk and has unlimited (!) liability for the debts of the sole proprietorship with their own private assets.
To set up a sole proprietorship, you must register a business. This can be done at any district administrative authority.
The advantages of the "sole trader" legal form are also that the micro-entrepreneur regulation excludes you from the classic compulsory commercial insurance and that you do not have to prepare an income and expenditure account up to an annual turnover of €700,000.
3. register company
All legal questions clarified? Ready for entrepreneurship? Then the time has come to register your 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 examination, degree, etc.)
It is also possible to register your own business in the Chamber of Commerce or by mail / Internet.
Once all the important documents have been received by the authorities, 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.
Online advertising works best in the age of the internet. With Google Ads, for example, it is possible to place advertisements for predefined search terms.
Of course, you also have to spend some money on such advertisements.
For the best marketing ideas, we recommend the free paperback from Gründer.de. The authors show how even small companies 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.
Every new entrepreneur should therefore draw up a sophisticated business plan before registering the company or looking for their first customers.
The competition should also be analyzed very carefully in the beginning.
You should also have a clear idea of what the company should look like in 1 or 2 years' time. The better the planning at the beginning, the fewer problems you will have later on.
