Thinking about becoming self-employed?
You can get tips and advice on what is important before starting up. You also have the opportunity to book a coaching session with a consultant in Finansforbundet.
Are you ready for life as a self-employed person?
Maybe you already have a great idea that you can’t wait to put into practice. However, before you go online and create a CVR number, it may be a good idea to check if you feel ready for life as a self-employed person. It’s one thing is to keep track of a business plan and the practical details, it’s another to be ready for the change it brings to your working life.
It is absolutely crucial that you figure out whether the job you want is in line with your values and priorities in life. For example, you should be aware that it can be difficult to create balance between your private life and work in the initial phase of being self-employed.
Therefore, it is important that you clarify the values and needs that you want to guide your work life. Then you can examine whether they are compatible with being self-employed. It may also be a good idea to talk to someone who has experience being self-employed. For example, you can use your network.
There are many ways to be self-employed, so there are several ways to find a form that suits you. For example, you can start by creating a small business as part-time employment if you expect to have a turnover of less than DKK 50,000. Then your business is considered a hobby business. It does not require CVR registration. You can keep your job to start with, and this provides security if you first want to see if your idea is competitive.
It does not require any start-up capital to set up a sole proprietorship. Establishing a sole proprietorship is the simplest form of business, where your business finances and private finances don’t have to be separated. On the other hand, if you expect a turnover of over DKK 50,000 within a 12-month period, you must register your business with a CVR number, as it is then considered to be a full-time business.
You can read about different forms of business on the Danish Tax and Customs Administration’s website.
Clarify your motivation
Another important question you should ask yourself has to do with your own motivation: What made you curious about the field and inspired you to seek that direction for your working life? It can be a good idea to clarify your motivation for becoming self-employed.
For example, is your desire for a career change because you want to get away from your current job or workplace? If so, it is not an active choice to do something else but your need to get away that governs your choice. It is not recommended to start a business on that basis. On the other hand, if you are passionate about what you can offer and have the ambition and desire to run a business, your chances of keeping up the energy level and motivation are better in the long run.
Do you have the right skills?
Be aware that when you come from a permanent employment where you have defined responsibilities, becoming self-employed can be a challenge, as you have to be responsible for a number of areas apart from what you earn money from. As a self-employed person, you have to be able to handle many different tasks yourself. Therefore, it is important that you have a broad knowledge of several different disciplines, such as accounting, finances, strategising, sales, marketing, IT, business development and law – or are willing to learn. Alternatively, you need to have the finances to pass on some of the tasks.
In addition to your professional knowledge, there are also a number of personal skills that can benefit you. These include:
- taking responsibility
- working independently and proactively
- being good at sales and interpersonal skills
- being able to manage your time
- being able to adapt
However, the most important thing in terms of starting a business is patience. It takes time to establish yourself. You must be able to set goals and work determinedly to achieve them.
How to get started
Once you have decided to become self-employed, you have probably already thought about your services, your target group and your finances. Below we have listed some simple questions about starting up that you can use to get an overview of some key aspects.
There are many questions to consider, such as whether your idea is competitive, who your target group is and how to approach financing. Therefore, it is a good idea to create a business plan. It can look different ways, but as a minimum it is a good idea to describe and decide on.
- What needs do you fill?
- Who will be your customers/target group?
- Why will the customers buy from you?
- Where are your customers located?
- What does the market look like?
- What is the legislation in the area? Are there special rules or permits you need to be aware of?
- How will your idea be translated into business?
- What is your time aspect?
- How will your product/service/knowledge be marketed?
- What are your strengths and weaknesses?
- What are your opportunities and threats?
- What are your risks?
- How much does it cost to set up your business? Do you have an establishment budget?
- Do you have a need for capital? What are your borrowing opportunities?
- Can you make money from it? What is your estimate?
- What are the prices in the market like?
Remember that you have to create an invoice form to print invoices.
Maybe consider whether you can start part-time so that you have a little income during the start-up phase until you can make a living from your business. The leap from being an employee to becoming the owner of your own business is exciting, but also an economic challenge. You have to be aware that your working conditions will change in ways that have a huge impact on your finances. Therefore, it may be a good idea to discuss your decision with your lawyer, accountant or bank adviser.
The form of business that is right for you depends on whether you are starting the business by yourself or with others and your financial opportunities in terms of funding. At Business in Denmark (virk.dk), which is partly run by the Danish Business Authority, you can get help clarifying the form of business that is right for you.
You also need to create a CVR number if you are going to run your own business full time. You can do this at Business in Denmark (virk.dk)
Make sure to give your business a name that matches the image you want the company to have and the products or services you will sell. The name must also be able to be pronounced if you are going to work internationally.
Also think about whether your business should be online or physical.
Remember to insure yourself against accidents in the event of, e.g. illness. Consider insurance policies that can help you.
You can get more information about what you need to know when starting up your own business on the Danish Business Authority’s website Danish Business Authority