After the Business Plan: The First Steps to Funding and Launch

After the business plan, the money comes first and the launch second: clarify financing with the bank, apply for the start-up grant (Gründungszuschuss) or the entry allowance (Einstiegsgeld) before you start, and only then register your business. After that you set up your account, bookkeeping and insurance, win your first customers and compare plan and actual figures every month.

With the finished plan, you have done most of the groundwork. Now the order matters: many types of funding are only available if you apply before you start. If you register your business first and only then go to the Employment Agency (Agentur für Arbeit), you put the start-up grant at risk.

Clarify financing

Show your plan first to those who are supposed to provide the money. For a loan, this is usually your house bank (Hausbank), including for KfW development loans, because you apply for them through your bank. The KfW development loan StartGeld (067) is available for up to €200,000. Submit the application before you start the project, that is, before you sign contracts or order goods.

In the bank meeting, what counts is the capital requirement, the financing plan and the liquidity plan, but above all the question of whether you can pay the instalments from ongoing business. Bring your CV, quotes for your purchases and a list of your private costs. How to prepare is explained in Preparing for the bank meeting. Which building blocks exist alongside the bank loan is shown in Start-up financing; you can find the conditions of programme 067 under KfW StartGeld.

Tip: Talk to at least two banks. A second offer gives you a comparison and an alternative in case one bank says no.

Apply for funding before you start

If you receive unemployment benefit I (Arbeitslosengeld I), the start-up grant from the Employment Agency may be an option: for six months your unemployment benefit plus €300 a month, then, on a new application, €300 for up to nine more months. When you start, you still need at least 150 days of entitlement to unemployment benefit and a viability certificate (Tragfähigkeitsbescheinigung). It is issued by a qualified body (fachkundige Stelle), for example the IHK, the chamber of crafts, a tax adviser or a bank, on the basis of your business plan.

If you receive basic income support (Grundsicherungsgeld, formerly Bürgergeld), the Jobcenter is your point of contact. It can pay the entry allowance under § 16b SGB II, as a supplement to basic income support for up to 24 months. Here, too: discuss your project with the Jobcenter before you take up self-employment.

Both are discretionary benefits (Ermessensleistung); you have no legal entitlement to them. A coherent plan and complete documents do improve your chances, though. The details are in our guides Applying for the start-up grant, Viability certificate and Entry allowance from the Jobcenter.

The formal start-up

Once your applications have been submitted, you register. Traders go to the trade office (Gewerbeamt), freelancers register directly with the tax office (Finanzamt). Within one month of starting, you also send the tax registration questionnaire (Fragebogen zur steuerlichen Erfassung) to the tax office via ELSTER. Which legal form fits, when you need a business registration and which permits your industry requires is explained in our guide Starting a business: the 8 most important questions.

Business account and bookkeeping

Keep private and business payments separate from the start. As a sole proprietor you do not always need a separate business account, but it makes bookkeeping much easier. For a GmbH or UG, a separate account is needed anyway. Decide how you write invoices, file receipts and check incoming payments, ideally right away with accounting software or together with a tax adviser.

Which obligations apply from day one, from the small business rule (Kleinunternehmerregelung) and the details required on invoices to retention periods, is covered in our article Obligations for founders.

Check your insurance

Health insurance and long-term care insurance are compulsory, either statutory or private. Depending on your activity, you also need business liability insurance or professional liability insurance. Check whether you are subject to compulsory pension insurance and whether voluntary unemployment insurance is worthwhile for you. You submit the application for it within three months of starting. The section on insurance in our guide Starting a business gives you an overview.

Win your first customers

Your plan describes the target group, price and sales channels. Now turn this into small, fixed steps: a Google Business Profile, a simple website with legal notice (Impressum) and privacy policy, profiles where your customers search. Reach out to your network, such as former colleagues, suppliers and clubs. The first orders often come through recommendations.

Set yourself a weekly goal for the first weeks, for example ten conversations or five quotes. For every enquiry, note where it came from. After three months you will see which channel works and can put your time and money there.

Liquidity: compare plan and actual figures

The liquidity plan from your business plan now becomes a tool. Every month, enter the real figures next to the planned ones: incoming payments, outgoing payments, account balance. If something differs, look for the reason. Are customers paying later than expected? Are costs higher? This way you see a shortfall weeks in advance and can take countermeasures.

Set aside reserves for taxes, especially VAT and income tax. The tax office sets the advance payments for income tax based on the information in your questionnaire. How the sub-plans fit together is shown in our guide Creating a financial plan.

Tip: Go through your open invoices once a week and send a friendly reminder as soon as one is due. Money that arrives late is missing when rent and instalments are due.

Support through AVGS start-up coaching

You do not have to take the first steps alone. If you are registered as unemployed or at risk of unemployment, the Employment Agency or the Jobcenter can fund start-up coaching with an AVGS, a voucher under § 45 SGB III. With a voucher approved in writing, you pay no personal contribution.

The coaching takes place one to one and online through the AZAV-approved UW Unternehmensweg GmbH. Together we work through financing, funding applications, bookkeeping, marketing and your first customers. It is most useful if it begins before the start, because then it still feeds into the bank meeting and the applications. The voucher is a discretionary benefit; how to get it is explained on our page AVGS coaching.

Checklist: your first 30, 60 and 90 days

The periods count from the day your business plan is finished. They are a guide: processing times at the bank, the Employment Agency or the Jobcenter can shift them.

Frequently asked questions

Do I register my business before or after applying for the start-up grant?

After the application. The start-up grant must be applied for before you take up self-employment. Registering your business beforehand can cost you the grant. You do not have to wait for approval. If you start before the decision, however, you carry the risk: if the Agency rejects the application, you get neither the grant nor unemployment benefit. It is best to agree the start date with your placement specialist.

Do I have to keep my business plan up to date after the start?

Yes, as a working basis. Compare plan and actual figures in the liquidity plan every month and revise the plan if prices, costs or your offer change significantly, at least once a year. For a further loan or the second phase of the start-up grant, you have to show how your business is doing anyway.

What does the bank want to see after the business plan?

The bank wants to know whether you can repay the loan. It looks at the capital requirement and financing plan, the liquidity plan for at least twelve months, the profitability forecast, your qualifications and possible collateral. In addition, there is a self-disclosure form, your CV and quotes for the planned purchases.

Do I need a tax adviser for the start?

It is not mandatory. You can prepare a cash-basis profit statement (Einnahmenüberschussrechnung) yourself if you learn how. At the beginning, however, advice is often worthwhile, for example with the tax registration questionnaire, the choice of legal form and the question of whether the small business rule suits you.

What do I do if the funding is rejected?

Ask for the reasons and check whether you can improve your plan. You can lodge an objection (Widerspruch) against a decision within one month. Without a grant, a smaller start or a development loan via the house bank can close the gap.

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