In Germany, there are many lucrative funding opportunities to help budding founders, entrepreneurs and self-employed people. The start-up grant is one of the most significant, as it basically provides financial support for the unemployed. We would like to show you what you need to get a start-up grant.
As the name suggests, the purpose of the start-up subsidy is to enable people with limited financial resources to start their business or launch their self-employment. In more concrete terms, the start-up grant is about a kind of financial security during the start-up phase. It is often the case in start-up phases that financial bottlenecks can arise. The founders understandably invest a large part of their time in the realization of their project, which is why other activities and thus other financial income opportunities are neglected. These hurdles are to be bridged by the start-up subsidy.
In the following text, we have compiled a checklist that contains all the essential steps and requirements so that you can definitely secure the start-up grant. We will discuss when and where you can apply for the start-up grant, which documents you need and how you can best prepare for the application.
In order for you to successfully secure the start-up grant, certain requirements must be met, as with all other financial aid opportunities.
First of all, before you start your own business, you should think carefully about whether the project you are aiming for is really profitable for you, is realistic and, of course, whether the project is accompanied by a certain passion. In order to bridge the start-up phase and to continue the project successfully afterwards, an enormous stamina is necessary. Therefore, it makes sense that you pursue an independent activity that you also enjoy.
Once your vision has been established, the next step is to present it to a person with start-up expertise. Expert founding advisors have an experienced eye with regard to the feasibility of your project. If this is given, they will help you to put the right finishing touches to your idea. This collaboration then culminates in the creation of a finely structured business plan. This serves as a guideline in the process of your start-up and is very relevant for receiving the start-up grant – you can learn more in our article: Why exactly do you need a business plan.
The start-up subsidy can only be granted to you if you can prove that you were registered as unemployed for at least one day and received unemployment benefit 1. In the best case, you should already register your job search with the office during your current employment. Thus, you symbolize that you are serious about changing to another job. Short-term employment and long periods of unemployment, on the other hand, are not advantageous. A quick change from unemployment status to self-employment offers the best conditions. Here, too, it is important to act with foresight and to contact the employment office early on.
On the same day that your self-employment activity officially begins, you must have been entitled to unemployment benefit 1 for 150 days, otherwise you cannot be granted the start-up grant. In any case, the application for the start-up grant should be submitted in the first three months of the year. The offices only have a certain amount of money available for the start-up grant per year, which is why you should take care of the application at the beginning of the year.
With your notice of termination and the unemployment benefit 1 granted, you now officially have the authorized status to apply for a start-up grant. Now you need to gather the necessary documents and records, which you absolutely must submit together with your application. As mentioned above, a well thought-out business plan plays an essential role. It is very beneficial to have a basic structure for your business plan in mind early on, as it is the roadmap for your startup. Now you should work it out to the smallest detail. Here, it is again advisable to work with a knowledgeable person.
The business plan must be supplemented by a well-structured CV with references to proven skills and occupations. So here it is very advantageous to have completed some form of training that in some respect goes hand in hand with your intended self-employment.
In addition, you should add a revenue and profitability forecast and a financing plan to your existing showcase material.
It may happen that the Employment Agency requires proof of participation in certain seminars. At such seminars, it is checked whether the applicant can demonstrate certain activities that are required for the business start-up.
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For some self-employed activities you need a permit or a license from the IHK (Chamber of Industry and Commerce) or HWK (Chamber of Crafts), for example a concession in the case of a bakery business that wants to offer food and beverages on site. Nevertheless, bakers need a special professional qualification – the master craftsman obligation applies – says the legislation. Although it is possible to bypass the master craftsman requirement as a founder yourself, there must be an explicit master craftsman in the business, albeit as an employee. The presentation of such a suitability, permit or license for the respective industry is a prerequisite for start-up assistance. So inform yourself before you submit the application and get the necessary documents – this is very important.
Discussion with the start-up expert about the feasibility and implementation of your intended self-employment.
Registering to look for work with the office while still working at your previous job. As soon as you have been dismissed, immediately register as unemployed. You only need to receive unemployment benefit (ALG 1) for one day in order to be granted the start-up grant.
Pick up the application for the start-up grant and prepare your business plan. The business plan serves as a guideline for the implementation of your project and as proof for the auditors whether and how your idea is feasible. Take plenty of time for the business plan and also the support of an expert person, because a well-thought-out business plan contributes significantly to receiving the grant.
You should think carefully in advance about the day on which you register your self-employment. You must have been entitled to ALG 1 for at least 150 days on the day of your registration. Depending on the activity, you may have to register a trade.
If you have followed all the steps, you are ready to submit the application for the start-up grant. If you still feel unsure, there is still the possibility to have the application reviewed by an expert.
Apply for an extension of the start-up grant in good time – you can find out more details in our detailed article: How to apply for the start-up grant correctly.