Startup basics – from idea to self-employment

12.10.2020 | Business Know-How

Finally being independent! Do you want to realize this dream? Here you will find relevant questions and ideas as well as many links to further information about business founding topic.

Why Startup – Clarify the Motivation

What is the motivation driving the idea of becoming self-employment? Is it the wish to be your own boss or to set up a project yourself? Is it your passion to realize your dream? Or do you want to keep the results of your own work in your own pockets instead of in other people’s wallet? Are you maybe looking for a solution to a problem that you have encountered yourself or that affects other people? There are various reasons to found a company – check out your own ideas of what makes building own business tick.

Actual Startup? – Make a Decision

Are you not confident enough to start your own business? Or maybe you have a specific perception of what becoming a founder or an entrepreneur looks like? Could it be that this perception of an entrepreneur is holding you back from starting your own business? If you have doubts about your abilities, you may see that you can do much more than you think.
It is resourceful for you to talk to other founders and get tips from them. Positive thinking is very important for your startup. But despite all this, there is always a chance that your startup will not work out as in your plan. A balanced mixture of being idealistic and realistic  is crucial when starting business.
Start-ups are often very time-consuming and labor-intensive. Are you ready to invest your energy in building a start-up? Do you have a supportive partner behind you and your plan?
If you cannot or do not want to get started right away, you might want to consider startup as a sideline. This provides the security of a permanent employment while it also prolongs the process of founding and establishing a company.

Requirements – Identify Skills and Values

Do you have the necessary know-how for your start-up? Identify your strengths and check if there are important skills you would like to or should acquire. You don’t have to do everything yourself – but there are some areas in which you should have at least basic knowledge. It is important that you are at least familiar with the basics of accounting, even if you are not a controller or an accountant.
In addition to the technical requirement, personal aspects also play a role in the foundation of a company. This includes your own motivation not only behind the foundation but also your personal values. It is very likely that your own interests and values matter during the development of a product or a service idea. In addition, your values also have a great influence on the implementation and the way of dealing and working with other people, be they employees, customers or suppliers. This also becomes essential if the foundation is carried out in a team. Here, divergent ideas and values can lead to tension.

Startup with a Team

Should a startup be founded within a team, it would of course be ideal if the required knowledge was covered by the different people. A multidisciplinary team offers many advantages, but nevertheless, competencies and responsibilities should be clearly defined. This avoids “blind spots” and decision collisions. If really important decisions for the company are pending, they should be made better in a team.

Collect Information

Take your time to gather information and use it as a basis for further planning. In addition to the development of the product itself, there are many other topics which a founder should deal with. This starts with the formal things for a founding process and ends with information about location, market and competitors. A startup owner also deals with many different possibilities for support. There are various different funding possibilities from the EU, federal and state. In addition, regional or target group specific projects are often advertised, which might fit your project.

Consulting and Experience Reports

For students and university employees, there are often startup incubators at universities, which provide various offers (LINK to offers) for people interested in setting up a business. You can find offers of the HFU here (link). These include information on the process of founding a company, events or lectures, or the possibility of renting co-working spaces, offices or conference rooms. Lectures and seminars on the topic of founding are also offered to the HFU students. Contact points for start-up consulting often have a large network and can provide you with valuable contacts. Here you can also get support with preparing a business plan or applying for funding.
The local Chambers of Industry and Commerce (IHK) are also a good place to go. They offer a wide range of information events and further training for interested people in setting up a business.
Take advantage of the experience of other startups, that are a few steps ahead of you or have already established. Most of them are happy to pass on their findings and experience.

Resources and Tools

You do not have to start from scratch. Use existing resources and save your start-up budget. These are, for example, available rooms, vehicles, machines, savings, and already existing know-how. Maybe there is the possibility to use the infrastructure in the start-up center of your university to develop prototypes. If you need your own equipment, there might be a possibility to rent or buy used equipment.
If you are more interested in self-employment and less in a specific business idea, a corporate succession might be an option. Here you have the advantages of already existing production and market structures as well as trained employees if necessary. Perhaps the opening of a franchise branch might also come into consideration.
There are many books and online information on the subject of founding a company. It is very helpful to use online tools for your planning, for example to create your business plan.  (LINKS external Founders pages federal / state, possibly links Plum)

Develop Product Idea

What is a product with which you would like to become startup in the beginning? Or is there a problem or a task for which you would like to find a solution? Maybe you have the desire to start your own business, but are still looking for a suitable idea.
In general, it makes sense to initially focus on customer benefit and demand when developing a product idea. The chance to build a successful business increases depending on the existing demand of customers and as few competitors as possible. Despite everything, however, actual innovative ideas and products have managed to establish themselves even though there was no explicit demand for them. These innovations were revolutionary and there was no need before, because there was no similar idea of these possibilities before.
There are different ways to develop a business idea. One is to perfect the product and relevant processes and then take it to market. However, there are more and more models that do not claim that the product has to be perfect from the beginning. Instead, a prototype-like product is developed, tested and then further developed, for example through customer observation and feedback. For this purpose, proven tools such as “Lean Start-Up” (LINK), Design Thinking (LINK) or Discovery Driven Planning (LINK?) can be used.
Maybe you want to prevent others from copying and imitating your idea, then you should consider protecting it. Here (LINK) you will find further information.

Develop Business Model

It is not yet possible to found a start-up with a mere product idea. A viable concept is crucial for implementation and commercialization. For the development of a business model, the Business Model Canvas (LINK BMWi) (or LINK PLUM) has been established. With this tool the most important aspects of a business model can be developed and presented in a clear and focused way. Altogether nine key factors are usually distinguished, central is the customer benefit or the value proposition for the customer.

Develop Business Plan

Based on the development of the business idea and the business model, the business plan (LINK Text Pber) presents the realization of the planned company in detail. It is the core element for the planning, implementation and evaluation of your start-up. It is not only developed for others, e.g. investors, but also serves as an important tool for the founding team.
The business plan should precisely describe which products or services are to be offered, by what means, at what price, for which customer group and which market. An important point is the financing (LINKS), to which special attention should be paid. The business plan often serves as the basis for applying for subsidies and loans. Templates (LINKS) help to create the business plan as soundly and clearly as possible. You can also get help from a business start-up advice center to prepare the business plan. You can find detailed information on how to create a business plan here (LINK).

Link Text Pber
Gründerzeiten 07 Businessplan
BMWi – Businessplan – Auf einen Blick

Plan Finance

Financing is a basic building block of planning for your start-up, both for the beginning phase and further follow-up financing phase. The realization of your startup stands and falls with you. The financial planning is also an essential part of your business plan as potential investors pay considerable attention to it.
The more own financial means and resources are available, the better – the greater the independence and also the higher probability to get a loan if necessary. The possibility of receiving funding should be carefully considered, as there are many different funding programs with different requirements and objectives.
LINKS Financing
LINKS Promotion programs

Implementation, Evaluations and Adjustment

At some point when it starts, the transition from planning to implementation is smooth: The product has been developed for some time, contacts to potential customers, suppliers or sales partners have been established, prices for rents have been requested etc. Now it is time to go to the authorities (LINK), registrations (LINK) have to be completed, a business account is opened, marketing measures are implemented. And at some point, the time has come and the opening is imminent, the first project, the first customer places an order. Then (hopefully) the success will come, maybe at some point the routine will come. No matter when, it is always important to check the current status and compare it with the planning. Adjustments may be necessary to react to the developments on different levels, whether in the microcosm of the company, on a technological, social or societal level, or even to local to global changes.

Related links:
GO! Gründungsoffensive – Existenzgründungsportal Bundesministerium für Wirtschaft und Energie
Gründerplattform Bundesministerium für Wirtschaft und Energie
Start-Up BW –  Ministerium für Wirtschaft, Arbeit und Wohnungsbau Baden-Württemberg
IHK Industrie- und Handelskammer Schwarzwald-Baar-Heuberg