Why you shouldn't start a company at the end of the year
Are you just planning to found your company and are thinking about starting quickly before the end of the year? Stop! Even if there is great motivation, starting a business at the end of the year can cost you time and money unnecessarily. We'll tell you why you'd better start the new year fresh and how you can make the most of the transition period.
The financial statements pitfall
Many founders overlook an important point: Even if you only start at the end of the year, you must prepare complete financial statements for the entire year. In concrete terms, this means:
- You must document all business transactions
- Prepare a legally required balance sheet
- Prepare a profit and loss statement
- Send all documents digitally to the tax office
And all that for a full year, even if your company is only a few weeks old! The associated documentation and archiving obligations mean not only additional time, but also avoidable costs.
What does that mean for you as a founder?
In practice, this means that you have to spend a considerable amount of time on administrative tasks right at the start of your self-employment, instead of concentrating on building up your business. There are also costs for setting up accounting and onboarding with a tax advisor — all for just a few weeks of active business in the beginning year.
The IHK contribution trap
Another expensive point: The IHK contribution. The Chamber of Industry and Commerce calculates its annual fee regardless of the actual founding date. That means:
- You pay the full minimum contribution for the entire year (every month!)
- There is no pro rata calculation based on your actual operating time
- Payment is often due immediately after incorporation
Why is that problematic?
During the start-up phase of your company, every euro is valuable. You can save yourself unnecessary expenses such as the full IHK annual fee for just a few weeks of business operation by strategically planning the start of your business.
The clever alternative: Use the time until the new year
Instead of starting up in a hurry, you can make optimal use of the remaining time until a fresh start. Here is your roadmap for perfect preparation:
1. Refine your business concept:
- Revise your business plan
- Conduct a detailed market analysis
- Define your target group precisely
- Calculate your prices and cost structure
2. Prepare marketing:
- Develop your marketing strategy
- Plan your online presence
- Create content for social media
- Prepare promotional materials
3. Build a network:
- Make initial contacts with potential customers
- Attend industry events
- Exchange ideas with other founders
- Search for potential cooperation partners
4. Finances and formalities:
- Compare offers from different banks
- Find out about funding opportunities
- Get insurance quotes
- Prepare all documents for business registration
5. Processes and Organization:
- Plan your work processes
- Choose the right tools and software
- Develop quality standards
- Create document templates
The benefits of year-end timing
Starting the new year offers you several strategic advantages:
- Clear bookkeeping: Your first financial year corresponds to the calendar year - this makes accounting clearer.
- cost savings: You save yourself unnecessary fees and contributions for the current year.
- Better planning: You can approach your annual goals in a structured way right from the start.
- Full focus: Instead of dealing with administrative tasks, you can focus directly on your core business.
Checklist for your preparation
✓ Finalize a business plan
✓ Develop marketing strategy
✓ Build a network
✓ Plan finances
✓ Define processes
✓ Prepare documents
conclusion
Starting a business should be well thought out. By starting the new year, you not only save money on annual financial statements and IHK contributions, but can also start your first financial year relaxed and optimally prepared. Use the time until then to perfect your business concept and make all necessary preparations.
Good luck for a successful start into self-employment!
Tip: Follow Mika on social media for more start-up tips and updates on entrepreneurship. We regularly share valuable insights and practical advice on taxes and accounting.
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