There are around one million small and medium-sized craft businesses in Germany. This industry is one of the largest in Germany. However, technical expertise is also in great demand for many years. Many a do-it-yourselfer who enjoys carpentry, painting and plastering work and is generally involved in handicrafts dreams of making money with his favorite pastime. But regardless of professional skills, there are some important points on the way to successful self-employment to be observed.
Start-up advice – valuable information from professionals
If you want to be self-employed as a craftsman, you have to be good at what you do. In addition, however, there are also the commercial side with calculations, bank meetings and business plans, which are difficult for many self-employed craftsmen. At a Start-up advice, for example from the Chamber of Crafts or IHK, experienced businesspeople pass on their many years of experience. They have a lot of tips on how founders can best behave at the bank, how to write a business plan, how to assert themselves against the competition or which advertising measures make sense are. Many are at a loss when it comes to advertising. A lot of money is quickly burned here by choosing the wrong or far too expensive advertising material. For starters are Ballpoint pen with company logo a good idea.
Tip: The state provides a lot of help for founders and pays subsidies for this advice. The consultant also knows how and where the subsidies are available.
The craftsman profession is sometimes very strictly regulated
Anyone who wants to become self-employed in the trade must be well informed in advance. There are some trades in which only a master is allowed to open his own business.
- Activities that require authorization as a self-employed craftsman
Anyone wishing to work in a trade that requires authorization must have a master’s degree. In some cases there is also the old journeyman regulation, which means that the founder must have at least six years of professional experience, four of them in a managerial position. Another option is to hire a full-time master to oversee the work. However, this can be expensive at the beginning. Here it is important to calculate well whether it is worth it at all. Activities that require authorization include electrical engineers, concrete workers and roofers.
- Freelance work as a freelance craftsman
In these activities, the master’s title is not a must for setting up your own craft business. However, other business permits may be required. These include, for example, ceramists, basket and wickerwork designers or watchmakers. Founders can become self-employed in these areas without a corresponding approval.
- Self-employment with craft-like activities
No further approval is required for the craft-like trades. These include, for example, floor layers, the installation of standardized prefabricated components such as windows and doors or pipe and sewer cleaners.
In the This is precisely regulated by trade regulations and in Appendix A as Annex B1 and B2 all professions are listed.
Create a business plan
Once this point has been clarified and it is clear that there are no problems registering the business, a professional business plan must be drawn up. Every founder should do this in advance, as it helps to take a closer look at some important points.
- Analyze the competitors
Self-employed craftsmen are more regionally bound than companies in other sectors. It is therefore important to take a closer look at potential competitors at the respective location. How many other companies in this particular area are there already? Is there any further need at all? How many potential customers are there in the catchment area?
- Prices and range of services
An important point when planning self-employment as a craftsman are the specific services. Your own skills play a very important role. What additional offers are possible so that the new company stands out from the competition? Sometimes it can make sense to also offer the sale of spare parts or accessories, for example.
Don’t sell yourself below value!
When it comes to pricing, it’s important to know what the competition is asking for. However, it makes little sense to undercut the competition at any price. Because potential customers also know that quality has its price.
- Detailed financial plan
Financing is also part of the business plan. It is necessary to calculate how much the Capital requirements for the establishment is, for example, for the purchase of tools, workshop equipment or materials. If it is not going to be a one-man operation, come every month Personnel costs towards the founder. Furthermore, registration costs, rent and vehicle costs have to be paid. Craftsmen usually pay in advance. They only write their invoice when they have finished their work. Therefore, a certain amount of capital has to be calculated for the initial phase in order to bridge the time until the first cash flow.
In most cases, founders in the trade need a loan. You cannot do everything from your own resources. There are also various funding opportunities and grants that the start-up advisor can provide information about. The amount of funding depends on the state and personal living situation. The financial cushion should be calculated generously at the beginning. Then there is enough time for the company to establish itself.
Dealing with authorities
When everything has been clarified so far, it is time to register the trade. For this purpose, craft businesses must register in the respective craft register at the Chamber of Crafts. This costs a fee, which can vary in the federal states. The Chamber of Crafts takes on the registration at the tax office. As soon as all the necessary documents have been submitted, the company receives a tax number and it can start.
Important: Insurance protects private assets
Self-employed craftsmen have to pay for their own health insurance, regardless of whether it is private or statutory. Crafts that require approval are also subject to pension insurance. Further insurance can be worthwhile, such as occupational disability insurance, accident insurance and business liability insurance with legal protection. Because a small mistake can creep in quickly and have serious consequences for the customer. So that you don’t have to fight against claims for damages and high costs, you should consider good insurance.
Now it starts – the jump into the deep end
When all these hurdles have been overcome, a beloved job or hobby can become a fulfilling self-employed activity as a craftsman. This requires customers who need the service and who are ultimately satisfied. In addition to word of mouth, the company should also have a website that customers can use to obtain information. Potential customers feel in good hands with a friendly and professional presentation. Incidentally, this also applies to personal customer contact.
Photo credits: shutterstock.com/MIND AND I, shutterstock.com/Gutesa (sorted chronologically or according to the order of the images used in the buying guide)