When you dream of your own business, it is important that you are prepared for what it means in practice. Being self-employed full-time, without any other source of income than the business generates, often requires significantly more than 40 hours a week. It is not unusual for you to also work evenings and weekends. It’s worth it! Think the vast majority of entrepreneurs we spoke to.
Even you, who are going to run your business on a smaller scale alongside an employment or studies, must be prepared to put in the time and sometimes hard work required to create the conditions for, at a later stage, if you wish, to invest fully and keep up with your new business. To succeed, you should be business-oriented, driven, independent, flexible, a bit stubborn and prepared to work hard.
You usually also need to be able to take on many different roles, especially at the beginning when, for budgetary reasons, you usually cannot hire other skills. It doesn’t hurt to also be a bit of an incurable optimist and see opportunities where most others see problems. And just that yes, it is an advantage to be a little economical too. If this resonates with you, and if you are able to fight through setbacks and learn from them at the same time, you will be rewarded with all the great things that it means to create and run your own business.
If you have income above the cut-off point for state tax, it is advantageous to take a low-tax dividend from the limited company as a supplement to the salary you draw. In a sole proprietorship, all profits apart from a standard deduction are taxed with income tax and personal charges. As an employee in your own limited company, you also get to make deductions for employee benefits for yourself, such as health care allowances, something you completely miss when you run a sole proprietorship.
If you are going to start a limited company together with others, it is important that you write a so-called partnership agreement which, for example, regulates how the partners shares are to be valued and what happens if one of the partners wants to drop out. Review which insurances you need, both for your limited company and for yourself. Get an accounting program as soon as you have started your limited company, you are obliged to report your income and expenses in an accounting.
You can choose to do it yourself or hire an accounting firm, but regardless of which you choose, it is you as a business owner who is responsible for your bookkeeping being done correctly. Through the connection to your bank, our program reads in all banking events that are booked automatically. When you enter a new supplier, the program suggests the account that is adapted to your particular industry.
