Become self-employed without equity? 8 clever ways for founders: From KFW funding to crowdfunding.
Table of contents
- Tip 1: Become self-employed without equity: apply for KFW funding
- Tip 2: Become self-employed without equity: Become a franchisee
- Tip 3: Become self-employed without equity: Convince business angels and investors
- Tip 4: Become self-employed without equity: finance your self-employment with crowdfunding
- Tip 5: Become self-employed without equity: team up with others
- Tip 6: Become self-employed without equity: Work independently as a part-time job
- Tip 7: Become self-employed without equity: bootstrapping
- Tip 8: Become self-employed without equity: Guarantee banks
Self-employment is the dream of many employees. No wonder… Because being your own boss has many advantages. However, being self-employed also requires a lot of work and discipline. It is not for nothing that the term “self-employed” is often taken precisely and divided into the terms “self” and “permanent”. Anyone who becomes self-employed has sole responsibility for the company and is heavily involved, especially at the beginning.
To be successful, you not only need a lot of work and discipline, you also need a well-thought-out business idea. So before you decide on this path, you should think carefully about whether starting your own company is really the right thing for you. At the beginning, for example, you can talk to other self-employed people and founders and ask them about their experiences.
Even if you want to earn money with your business in the long term, when starting your own business you not only need perseverance, but also capital. It's not uncommon for prospective founders to lack exactly that. We'll give you 8 tips on how you can become an entrepreneur without spending a euro.
Tip 1: Become self-employed without equity: apply for KFW funding
A practical way to become self-employed without equity is government funding from the Kreditanstalt für Wiederaufbau, or KFW for short. One like thatPromotional loanFounders get it even without equity. The condition is that the loan must be applied for within the first five years of starting the business. You also need a business plan and a profitability forecast.
KFW also offers various loans, which vary in terms of amount, repayment schedule and how long the loan can be used after it has been founded. The size of the company also plays a role here.
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Tip 2: Become self-employed without equity: Become a franchisee
A practical way to become self-employed is a franchise partnership. Many large companies, especially in the catering sector, have a franchise model. This means you can open a new branch of the chain yourself. You are then a licensee and continue the concept of the chain, but are responsible for your own business. Often you don’t need any equity or only a little.
It is important to think intensively about the franchise concept beforehand. You are self-employed, but not with your own business idea. This means that you have to stick to the guidelines and concept of your franchise partner. One of the most famous, if not the most famous franchises is the fast food chain McDonald's.
Tip 3: Become self-employed without equity: Convince business angels and investors
Anyone who has ever seen the lion's den will already be familiar with the following option for founders without equity: You can also look for an investor instead of turning to a bank or applying for government funding. Of course, you also need a sophisticated business idea and a good business plan to convince the investor of your project.
You can get even more support from so-called business angels. These are also investors who also support you financially. At the same time, they give you help with starting a business.
You then benefit from the know-how of business angels who have built up their knowledge either through their own company or because they have worked in a management position for years. Business angels can not only help you develop a business plan, but also support you in building a network of suppliers and service providers, for example. Business angels can also help you with topics related to marketing and customer acquisition.
Tip 4: Become self-employed without equity: finance your self-employment with crowdfunding
An alternative financing option is crowdfunding. Crowdfunding, as the name suggests, is about being financed by the masses. You present your project on a crowdfunding platform and try to convince people of your business idea. However, the people who support you financially usually do not receive anything in return.
As a “thank you,” many founders give their supporters discounts or even give them the product. Therefore, it should be a project that is of interest to the general public. Basically, the crowd that helps you with financing are also potential customers.
The difficulty here, of course, lies in getting a large number of people excited about your project. This not only requires a very good business idea, but also a lot of persuasiveness.
Tip 5: Become self-employed without equity: team up with others
In some industries there are many people who want to start a business. So you can simply join forces with others and found a start-up together. Especially if your strengths and skills differ from those of your co-founder, you can benefit from each other and complement each other as much as possible as a team. Of course, the chemistry has to be right and you have to have a common vision that you stand for.
It is important to clearly define the business relationships and always protect yourself contractually. You can find other founders on startup platforms, on career portals such as Xing or LinkedIn or at networking events.
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Tip 6: Become self-employed without equity: Work independently as a part-time job
Before you fully become self-employed, you can also become self-employed on a part-time basis. This has the advantage that you are not completely dependent on the income from your start-up. In addition, not everyone feels ready to start a new business straight away. The start as a founder is a little softer. Of course, this model is not suitable for every industry.
If your business model is more complicated and you are aiming for rapid growth, the double burden will probably quickly become too much and you will have to concentrate completely on your self-employment. Here too, it is important to weigh things up and always keep an eye on the expected costs.
Tip 7: Become self-employed without equity: bootstrapping
Bootstrapping is another way to start your own business without equity. Here, however, the founder needs to be particularly disciplined, as outside capital is largely avoided.
However, this model only makes sense if it is already clear that you will quickly reach the so-called break-even point. In other words, the point at which costs and sales are identical.
However, it is rarely the case that you reach the break-even point quickly. Especially in the beginning, a company or start-up is not a sure-fire success and involves a lot of work. The likelihood that you will get along without support entirely is slim, but not impossible. In any case, you have to manage well and be extremely economical.
Tip 8: Become self-employed without equity: Guarantee banks
You can also contact a guarantee bank. Private guarantee banks are supported by the state and help young entrepreneurs on their way to self-employment. As the name suggests, these development banks guarantee you and take on the risk if you are no longer solvent. Each federal state has its own guarantee banks, where you can find out the exact conditions.
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We hope our tips were able to provide you with initial orientation and that you now know the many different options for becoming self-employed even without equity. However, you should be aware that self-employment involves many risks. Find out in advance what challenges you will face and clarify any questions. In any case, we wish you much success with your project.
