How do I start my own business?

Part-time or full-time? 

For most people, starting out as a sole proprietor is the best option:
a) Small business owner under §19 of the German Value-Added Tax Act (UStG)—You are not required to report sales tax, and you are also exempt from filing advance sales tax returns. (Annual revenue in the previous year did not exceed 22T€, and revenue in the current calendar year is not expected to exceed 50T€.)

• Advantage: Entrepreneurs who primarily work with private customers (price advantage since no VAT is charged) 
• Business owners who do not have high costs of goods sold or many expenses
• Business owners starting a business as a side hustle

If you make use of the small business exemption, you must include a note on your invoices, such as: "Pursuant to Section 19 of the German Value-Added Tax Act (UStG), the amount shown on this invoice does not include value-added tax."

b) Standard Taxation You are fully subject to value-added tax and are entitled to claim input tax credits. You must file a value-added tax return regularly, either monthly or quarterly.

Business registration (fees range from 15–60€)

• Available at the business registration office or online in some federal states
• You’ll need your ID card 
• The form should be filled out carefully, including details about your business and the range of services you offer. The Trade Licensing Office will notify the tax office and the Chamber of Crafts (HWK) or Chamber of Industry and Commerce (IHK), and you will automatically receive mail from the authorities. Additionally, the Federal Statistical Office and the Trade Inspectorate will be notified.

Tax Office (tax registration)

You will usually receive this form automatically from the tax office within two weeks. If you haven’t received it after two weeks, it doesn’t hurt to follow up. Sometimes (very rarely), communication between the agencies is disrupted. The tax registration form currently consists of eight pages. We recommend seeking the help of a tax advisor for this. You can also apply for a VAT ID number using this form.

IHK/HWK

The professional chambers are also notified automatically. If you’re registering an eyelash or nail salon, it will be the HWK. HWK membership is not voluntary. Every business owner is required to become a member and pay the fees. (However, short-term exceptions are possible. Please check with the relevant authority. Payments should not be suspended on your own initiative.)

Warning!!!: There are often fraudulent letters in circulation that closely resemble official correspondence. Make sure that the sender demanding payment is a genuine government agency.

Tax Advisor

You’ll need the right tax advisor right from the start. Find one who’s well-versed in your field. Perhaps someone in your network within the beauty industry can recommend a tax advisor to you.

Bank Account

We recommend opening a separate bank account for your business. Keep your business income and expenses strictly separate from your personal account—this will save you and your tax advisor a lot of work and hassle.

Terms and Conditions and Right of Withdrawal

Either work with an online law firm that provides you with terms and conditions and a right of withdrawal—and keeps them up to date—or have your own drafted. Your terms and conditions, right of withdrawal, and price list should be prominently displayed in your studio and posted on your website. Please do not copy these from just any website.

Your Website

Make sure your website is legally compliant. We’ll give you some tips, but you should consider having a specialized attorney review everything before you go live. Here are our tips for you:

• Your legal notice must be complete. Visitors should be able to access the legal notice directly from the homepage. 
• You should exclude liability for external links. 
• You should have the necessary image rights for any images you use on your website. Note that if you’ve purchased licenses for images, you may be required to credit the copyright holder. You can include this information in the legal notice, for example. You’ll need to clarify all details in advance on a case-by-case basis.

Social Media

To market your business and increase your visibility to potential customers, you should consider using various social media platforms: a Facebook Page, an Instagram account, Pinterest, YouTube, Vimeo, etc. On all of these channels, make sure your legal notice is visible on the first page.

A Google Account

You should definitely set up a Google Account for your business. Here, you can enter various details, such as business hours, photos of your business, contact information, etc. These days, you’re not visible without Google!

Your Logo/Brand

It makes sense to create a logo as your distinguishing mark or brand symbol. This allows you to develop a corporate identity. Your business cards, flyers, website, and even your studio should all follow this design.

GEZ

If you want to listen to the radio in your studio or have a TV running, you must pay GEZ fees.

Insurance

Business liability insurance is required in all cases. Depending on your needs, you may also need your own health insurance and/or retirement insurance.

Price List

Your price list should be set from the start and displayed prominently in your business. Be sure to create a detailed cost breakdown as the basis for your prices.

Customer Consent Form

We recommend that you have each customer sign a written consent form. This form should include the following:

• All details regarding the treatment 
• Client information Medical history 
• Reference to the GDPR (You should definitely study this topic in more detail) 
• Permission to take photographs and, if applicable, the client’s permission to use them on platforms such as social media. 
  
  

The client should also confirm their satisfaction in writing following the treatment.

Cash Book and Accounting

Keep a cash book and record your daily income and expenses. Provide customers who pay in cash with a receipt, either by issuing a cash register receipt or an appropriate invoice.

Legal Notice: This blog post does not constitute a legally binding statement. We are simply sharing our experiences with you.

We hope this information is useful to you and provides guidance for your self-employment.

Your CFB Cosmetics® Team