How expensive is it to start your own business? How much start-up capital should you plan for? And how do you get money if you absolutely want to become self-employed but the piggy bank is rather lean?
There is no general one-size-fits-all budget that applies to every self-employment and every founder. That's why you won't find any concrete figures here. The respective budget depends heavily on your business and your individual living costs.
Of course, though, there are guidelines to guide you and determine what you need to get started if you are going to become self-employed want. More importantly, there are practical tips and incentives to help you cut your costs. Find out what you absolutely need to know! We'll tell you.
Your simple initial equipment to start your own business
First of all, you need time to build up your new business and get your first customers. During this time, of course, you will still need to buy food, pay rent and cover your living expenses. Therefore, plan from the outset that you will have to manage for a few weeks or months without a fixed income, if you want to become self-employed want.
You will also need some initial equipment. This includes the most important working materials for your services, for example scissors for hairdressers or graphic programs for designers. A computer and a telephone are also part of the most important start-up equipment. If you like, a great name for your business, a logo, a website, business cards, letterheads and promotional brochures.
The best thing is that as a self-employed person, you can deduct many costs from your taxes. And many service providers don't really need their own office. After all, you can do paperwork from home and you can find a nice workplace with Wi-Fi in the café around the corner. As you can see, the costs remain manageable for now.
Making it on your own: The Marshmallow Problem
Let's get back to your cost of living. A big challenge for many self-employed people is to control their own impulses. But if you give in to every impulse, you'll afford yourself unnecessary expenses - and sometimes that can be dangerous. Here's a little digression:
In a science experiment you've probably heard of, four-year-old children spent a few minutes alone in a room. In front of each child was a marshmallow. Those who managed not to eat their marshmallow were later given a second one as a reward.
How many kids do you think accomplished the task and didn't touch their marshmallow? Only a third of them managed not to eat the candy. These children showed self-discipline. They were patiently and received their reward at the end.
And lo and behold, a decade and a half later, the kids who hadn't eaten the marshmallow were clearly successful. They shone through better school grades, relationships and life plans than the others.
Becoming self-employed means reducing expenses
What do the marshmallow kids have to do with your independence? Quite a lot. Because who freelances, faces the same decision as the four-year-olds. Either you do without for a while in order to receive more later. Or you want to get something right away without being willing to do without at first.
If you're in the later stages of your career... strike out on one's ownyour standard of living is already relatively high. Therefore, in this case, you should pay special attention that the money does not run out before your business is sustainable.
At the same time, frugality has not only something to do with financial obligations, but above all with the inner attitude. Our tip: Practice self-discipline and always remember that second marshmallow! Spend money only on the essentials and you'll see that it's not that expensive to start your own business in the service sector with basic initial equipment and a lowered cost of living.
Help with (higher) start-up capital
But what if your startup costs skyrocket because you need a car to get from A to B? What if you need a practice because you're a physical therapist or dentist? become self-employed and have to treat your patients? Or if you have a very unusual and innovative business idea for which you need to hire a squad of good programmers?
Then suddenly we are no longer talking about minimal amounts and living expenses. Then we are talking about relevant start-up capital for furniture, equipment, goods and personnel. There are solutions for this as well. If you can't manage the budget on your own, there are, for example, loan options for founders, some of which are offered at favourable conditions or even subsidised.
Private investors could also be interesting and maybe you have heard the word "business angels"? These are experienced entrepreneurs who mainly support start-ups and help them with words and deeds. In return, they earn money later on, as soon as the start-up generates revenues.
In principle, there are a number of sensible options, but these depend heavily on your individual plans. Therefore, inform yourself on the Internet or consult a business consultant with start-up knowledge. He can show you concrete options that work best for your project.
Doing it on your own: Calculate with real numbers
Does it all sound pretty expensive? Don't worry, it's not. In a nutshell, let's recap: For most of the services you'll be dealing with. become self-employed you really only need a minimal start-up budget.
Of course, it always depends on your own requirements. You can build a website yourself or hire a professional designer for several thousand euros. You can get the newest and most expensive laptop model that is currently available, or work with a used one.
Consider in advance exactly which investments are important because they will bring you forward the fastest. Then, in the second step, negotiate good prices and add them up. Add to this your (lowered) cost of living for six to twelve months.
Find alternatives and other footholds
If you can live off your earnings faster: All the better! But it's better to play it safe with your calculations. Many founders and budding self-employed people make the mistake of calculating too tightly. They end up failing because the money is gone before their business pays off. Don't fall into the same trap, but calculate with real figures and plan a generous buffer.
Also consider suitable alternatives: What if you don't run your business full-time, but work part-time on the side? That way, your income won't collapse overnight. Or start your own business right after graduation. At this point, your living expenses are still low and it's not hard for you to save. As you can see, there are a number of ways to get started on a budget.
In the end, the question is no longer what the Self-employment but what it brings you. Probably more than you could ever calculate with numbers and profits. Because turning your passion into a profession is priceless for many founders and young entrepreneurs. So, go for it! Here you will find exactly what you need for your professional success: Free online webinars, an online academy, seminars and intensive coaching programs that help you get ahead in a specific subject. Take a look around!
Free workbook for your further development
Professional and personal development are closely linked. Changing one's life, getting involved in something new - these steps are harder than it looks at first.
Of course, we don't want to leave you alone with this. With our free workbook "Ten Business Coaching Tips for Your Career", you'll receive ten practical tips that you can apply immediately in your everyday work. With simple coaching methods and tools that business coaches also use, you'll be able to show off your new leadership and management skills to colleagues and superiors tomorrow. Get your copy now here Workbook!