Starting a business without money: these are your options

The KVK Advice Team regularly receives questions from new business owners who believe you can only start a business if you have money or financial backing .Here are the most frequently asked questions about starting a business without money:

1. What type of business can I start without money?

Most new business owners tend to start businesses with which they have previous experience, based on personal interest, educational background, or professional experience. If this applies to you, you probably already have the equipment or tools you need to start your business. For example, if photography is your hobby, you will not need to buy a camera to start as a photographer. 

Often your expertise or knowledge is sufficient to be able to help your customers. This might include garden maintenance, odd jobs in and around the house, architectural work, administrative support for businesses, and coaching or consultancy work. You can then start a business with minimal resources.

2. How much does it cost to list my business in the Business Register?

You pay a one-time registration fee for your registration. You can deduct these costs from your profit when you file your income tax return. Some suppliers or government agencies will ask you for an authenticated certificate from KVK. This is essentially a ‘passport’ for your business. Organisations can also access the information from the Business Register electronically. Be sure to ask if a paper certificate is really needed, as this will save you money.

3. Does KVK check if I have money upon registration?

No, we do not. KVK manages the registration of businesses and does not check if you are solvent. When registering your business in the Business Register, you must provide the following information:

• the name of your business
• the address of your business
• the activities of your business 
• your contact details

4. Can I opt for a free legal structure?

Anyone who starts a business must choose a legal form. This is the legal structure of your business and determines, among other factors, your liability and your tax obligations. The eenmanszaak (sole proprietorship) and vennootschap onder firma (vof, general partnership) are legal forms which are easy to start yourself without engaging the services of a notary. You only need to pay the one-time registration fee to KVK.

If you are looking to start a besloten vennootschap (bv, private limited company), you will need to see a notary. The fee you pay will vary depending on the notary and your requirements. You generally pay between €300 and €1,000.

5. How do I know if I need money to start my business?

We recommend that you write a business plan to help you systematically prepare for your career as a business owner. The business plan includes an investment budget: a list of the minimal financial resources you need to get started. If you do not need to buy anything before starting your business, the amount you need may be nil.

We recommend that you make a forecast for several years. While you can start a business with no funds of your own, you may require financial resources down the line to be able to grow, or to replace equipment or materials. You should set aside some money for this purpose.

6. What are some of the areas in which I can save money?

If you have no money, there are all kinds of ways in which you can save money. Make use of your network. You do something for another self-employed professional without staff and they do something for you in return. Networking is an important entrepreneurial skill. It can bring you clients and perhaps collaborations. Moreover, you can learn a lot from other entrepreneurs.

Workplace

You can set up your workspace in your own home. This will save you rental costs for an office. Does your workplace have its own entrance, toilet, and water connection? If so, you may be able to deduct the cost of these (in Dutch) in your tax return. If you cannot meet clients at home, it is normal in many sectors to meet in cafes or flex offices. It is not expensive to rent a meeting room with wifi for an hour or 2 and this is also a business expense that you can deduct on your income tax return.

Business transport

Do you need a car for your work? Find out in advance what will be cheapest for you. Having a company car affects how much tax you pay and what deductions you have. Use our tool (in Dutch) to calculate which choice will save you the most.

7. I do need money to start a business. How can I secure these funds?

You can go to a bank for a loan, but banks expect you to also take a risk yourself by investing. You can also start your business right away, but start small. You can do this, for example, by starting your business alongside your salaried job.You can then work on growing your business and put money into it later.

Talk to people in your network. A network can help you in your search for money and give you money-saving tips. In addition, you can also secure funding by:

• getting help from a coach or adviser/consultant. A good financial rationale increases your chances of obtaining funding.
• securing a private loan. This often involves borrowing money from family or friends. While this may be a good solution, you should make clear agreements about these types of informal or private loans.
• crowdfunding. You can use a crowdfunding platform to raise funds through crowdfunding. You explain your plans to the public and then ask them to invest money in it.
• finding out if you are entitled to government funds for investments in startups. Startups are businesses with novel ideas and products made using new technologies.
• talking to Sociale Banken Nederland (in Dutch). This is an alliance between local councils and 23 credit banks in the Netherlands. This bank serves, among other things, people who want to borrow money to fund their business, but who would be turned away by regular banks.
• applying for business capital from your local council under the Besluit bijstandsverlening zelfstandigen (Bbz). As a new business owner, you can request business capital to invest in your business. This is typically a loan, but it could also be a gift. Whether and how you receive Bbz depends on your situation.
• contacting Qredits. They provide funding to new and established businesses. You do not necessarily need to contribute funds yourself. Qcredits will assess your business plan and why you need money. They will then evaluate whether the risk of starting a business with no financial contribution of your own is acceptable. Note that having some money of your own will increase your chances of securing funding.

Do you have questions about starting up with few financial resources? An adviser from the KVK Advice Team will be happy to think along with you: 088 585 22 22.