A good business idea and capital are required to start an enterprise.
Anyone thinking of starting an enterprise should first test the business idea and carefully study the need for finance before setting up. The success of a start up enterprise largely depends on the entrepreneur's personality, expertise and professional competence. An entrepreneur must be able to cope with the trials and tribulations of private enterprise such as uncertainty, setbacks and pressure, as well as have a sound knowledge of financial matters. An entrepreneur who is about to start his/her business can turn for support to Jobs & Society, which helps to assess a business idea, competitiveness and development prospects, and can also help to prepare financing need calculations and profit forecasts in cooperation with the entrepreneur.
Besides the investments involved in setting up a company, finance should also cover the working capital required to operate the business. It is also a good idea to include the wage needs for 2-3 months. The need for working capital financing is particularly important, especially in the early stages of business, when a start-up enterprise may well have more outgoings than income.
Financing can be divided into equity capital, mezzanine financing, loans and other liabilities, grants and cash inflow from activities. Funding by the owners (20-30%) facilitates access to external financing and contributes to project implementation. Banks, insurance companies and special financial institutions are important partners when it comes to subordinated debt financing.
A good business idea, profitable operations and adequate cash inflow from activities are essential requirements if a business is to remain viable, be successful, develop and grow.
Read more: The financing needs of start-ups