Working in Germany: the official website
for qualified professionals

Finances

Your financial planning is at the heart of each business plan. After all, your business can only be successful if you’re able to make the investments you need and if it’s profitable in the longer term. Your financial plans can be divided up into several sections.

Capital requirements: choosing what to invest

As a first step, you will need to determine your capital requirements. That means that you need to write down how much money you need to set up your company. Your list should include all the expense you’ll incur before your business starts operating, for example for machinery, buildings or other investments. You should also allow for a budget for what is known as the start-up phase, which is usually deemed to be about six months. Remember how much money you need to pay for your cost of living, and don’t underestimate it.

The Startup Portal provides a template for a capital requirements plan and further informations.

Financing plan: where to get the money

Once you have determined how much capital you need, you will need to work out where to get it from. The answer to this question should lie in a financing plan.

Normally, you would finance your enterprise with a mixture of equity (your own wealth) and borrowed capital (e.g. a bank loan). You should be able to say quite accurately how much equity you have. For borrowed capital, the answer is probably not as straightforward. After all, you want to use your business plan to convince creditors to give you a loan! They should be able to tell how much borrowed capital you require. 

A template for the financing plan is available for download on the Startup Portal. Make sure to mention possible risks for your enterprise and develop a worst-case scenario as well as a best-case scenario. 

Cash budget: balancing inputs and outputs

You should use a cash budget to determine whether you can cover your running expenses with your earnings. You need to set up this budget for the first six to twelve months after you’ve launched your business. Think about how much you’re spending on fixed costs. How much does the interest for your bank loans cost you, for example? How much do you intend to spend on sales and marketing? In the input column, you indicate your intended revenue and profit. To cover a situation where you’re spending more than you are earning, you should have an adequate cash reserve. 

Profitability forecast: what is your expected profit?

In a profitability forecast, you can indicate your intended revenue, expenditure and profit for the first three business years. A template is available on the Startup Portal. Even though you will have to estimate most of the figures, your calculations will give you a feeling for whether the investment in your business is likely to pay off. In addition, the expected profit is important for convincing creditors of your enterprise.

Consultancies, for example, will support you in setting up a profitability forecast. As you estimate your profit, you should make sure to bear in mind overall trends in your industry. Information about industry trends is available at industrial and professional associations and the Chambers of Industry and Commerce. It may also be helpful to take a look at the situation of comparable businesses. 

Information on the internet

Checklist for your financing plan 

Things to bear in mind when planning your business finances (German, English)  
 

BMWi Checklist no. 6: Profitability outlook

Create your profitability outlook (German, English)
 

BMWi Overview no. 5. Capital requirements

Financing the start-up and the initial operating phase(German, English) 
 

BMWi GründerZeiten no. 6: Existenzgründungsfinanzierung (funding your startup)

Finding the right financial support for your startup plans. Here, you can get an overview and learn about some important tips and tricks (PDF) (German)

Email

Send us your questions about living and working in Germany in German or English. We will answer as soon as we can.

Write email

Hotline

You can get personal advice in German and English over our hotline. We look forward to your call!

To the Hotline

FAQs

Here you'll find answers to the most frequently asked questions about living and working in Germany, as well as about our Web site and partners.

Read FAQs

Chat

In our chat you can put your questions to our specialists in German or English, rapidly and without prior login.

To the chat

Contact

This website uses cookies. By continuing to browse the website, you agree to our use of cookies. 
 More