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Start-up balance improved in 2019

Starting a business and giving up self-employment have leveled off in 2019. Although the number of founders fell, fewer self-employed than in previous years had to give up their companies. It was not examined whether subsidies were used before or after the foundation.

Company formations versus liquidations

Just 1.6% fewer self-employed than in 2018 dared to take the decisive step last year. Of the trend towards decline is nothing new, however, 2019 was the ninth year in a row. Commercial liquidations also declined. While there were around 21,100 business closures in 2018, there were around 9,900 in 2019.

See you at the liquidations If you take a closer look at the individual reasons for reporting, a clear picture emerges: it was mainly the small businesses that posted a negative balance and thus contributed to the poor overall figures. The sideline founders, on the other hand, were more successful in their entrepreneurial activities. Registrations for sideline businesses rose by 5.3%, sideline assignments fell by 13%. This resulted in a balance improvement of 15,800.

More entrepreneurial success could have the main branches. With around 88,000 new registrations, the number rose by 1.1% compared to the previous year. At the same time, business closures in this sector fell by 3.5%, which led to an improvement in the balance by 3,400 businesses. The company takeovers and handovers through purchase, lease and succession also contributed to the good overall balance (reading tips: Business takeover and company succession). Here the balance was 5,500.

Regional ranking when starting a business

Every autumn, the IfM Bonn publishes the NUI region ranking (NUI – New Entrepreneurial Initiative, external link). This statistic reflects how many trades were registered in the corresponding previous year, based on each 10,000 inhabitants of working age. kick at it Differences between the individual federal states clearly in the foreground: the city-states of Berlin and Hamburg led the way. Here it was 100.5 or 84.9 residents who decided to register a business. Hesse leads the ranking among the non-city states with 65.0 business start-ups per 10,000 inhabitants.

Also seems the industry not insignificant for the success of an entrepreneurial activity. As the IfM Bonn states, it expects more start-ups in the IT sector and with correspondingly structured concepts based on digitization in the next few years.

It is also positive that more and more Women dared to take the step of “founding a company”. Their share increased in the case of commercial start-ups of sole proprietorships. While it was still 28.8% in 2018, it reached 29.3% in 2019. On the other hand, a small number of women left the sideline sector, where their share fell by 0.3% to 40.9%.

Business start-up 2020: (K) A way to self-employment

For 2020 they are forecasts unsure. In the first half of the year, it became apparent that the number of start-ups would decline. In the opinion of the IfM Bonn, this applies above all to the sectors that were and are particularly badly affected by the coronavirus pandemic. The experts consider different developments to be possible: Some of those who have been daring so far will lack the courage to tackle the challenge of “going independent” right now. Others, in turn, dare to switch, not least because of short-time work, the threat of job loss or even existing unemployment (reading tip: ALG 1/2: Make yourself self-employed out of unemployment).

It is also unclear how many of the companies founded in recent years will experience the effects of the corona crisis can overcome. So far, the first few years of self-employment have not always been what the young entrepreneurs had hoped for. After just one year, only 78% of the start-ups were still on the market, and in the fifth year it was only 40%. Anyone who had started out in a future-oriented branch of the economy had better prospects. In addition, companies with employees have been in the market longer than those without. Only having to show responsibility for oneself may be one reason. However, more industry knowledge and business management knowledge, which are essential for starting a business, may have been the decisive factor for the successful survival of companies with employees.

Irrespective of whether a business start-up is planned or has been completed, it is advisable to be accompanied by subsidized business start-up advice. Especially for existing companies in difficulty, there is also the BAFA funding for management consulting with a 90% cost assumption.