Starting an own business comes with challenges, many starting entrepreneurs have to make alot of personal sacrifices in the first years of starting their business. It is not always easy for starters to accomplish their goals, or to make a business that is self sustainable.
In this article we will discuss some of the common difficulties of starting entrepreneurs.
Starting a business or paying the bills?
Starting entrepreneurs have the difficulty in the beginning of not always having enough profits to cover the bills . This means that they will have to find a way to be able to pay the bills in the time until they archieve a healthy client base.
Finding credit in the starting phases is generally difficult, as the lender will want some guarantees to ensure the loan will be paid back.
This means that many people do not start a business until they build up a sufficient bankroll. Or they are able to acquire initial funds from friends and family.
When you are just starting up and have a limited budget, you should of course make due with the resources you have. Many CEO's pride themselves for doing everything for their own business in the startup phase.
But watch out for taking on too many aspects yourself. If you want to do everything from marketing, sales, backoffice, accounting, graphic design, website and so on. You could get overwelmed and forget your core business. Tim Ferriss, author of ''The 4-hour workweek'', advises you to set yourself an hourly rate. If outsourcing a certain aspect of your business costs you less than your hourly rate, you should outsource it.
Reaching (potential) customers before you start
Another philosophy is written in the book ''The Ultralight Startup'' by Jason Baptiste. The book is aimed at internet and tech based entrepreneurs. A core idea is to release a minimal viable product as soon as possible, or even to already reach out to the potential customer audience before your company is operational. This can be done for example by launching a ''coming soon'' page, in which you have a signup form to which potential future clients can subscribe.
The idea of finding customers before you launch a service, with the minimal viable product (the concept or idea) is happening more and more. For example on kickstarter.com, it gives starting entrepreneurs the possibility of finding buyers before the product is made, fully completed or even before a prototype is designed.
Of course the imagination does not end there, if you are a photographer, you can start by publishing your portfolio. If you are a writer, you can start with one blog post. And so on.
But when is the perfect time to start a business?
Many people who consider starting an own business wait for the perfect time to start their business and realize their dreams. Waiting to archieve a certain own capital on the bank, waiting until they finish their studies, waiting because they have recently bought a new house, married, have got a promotion, are out of a job, or have recently become a parent. When is the perfect time? When the economy recovers? When the housing market is back up?
Robert Kiyosaki, the author of ''Rich dad poor dad'', would say the perfect time will never come, if you have a dream, the best time is now to start working on it. If you are working a job, nobody is preventing you from making preparations for a business in your free time. Making a small test case of can be a perfect way to test the waters for your business idea.
A similar concept comes from the book ''Think & Grow Rich'', by Napoleon Hill. Napoleon mentions that the best way of archieving your goals, is by working on them right away. He is also not very conservative in his advice to ''burn your ships behind you'' and press forward towards your goals. For most, this is an absolutely terrifying concept. However, it might be the only way to overcome the infinite possible doubts and reasons why you should NOT do something. While the reason that you should, is simply because it is your desire to do so.
What entrepreneurs gave up to start their business
Everyone is well aware of the sacrifices that some famous entrepreneurs make, Elon Musk is working somewhere in the region of 100 hours per week. Some famous entrepreneurs have bet their entire fortune on the company to succeed.
But what are the main sacrifices that small businesses entrepreneurs make? Annamaria Mannino White is featured in a Business article on CNN, about her firm White Star Communcations. A marketing and public relations agency. She mentions that she just started her business as her husband had to relocate to another country with the military. She had to stay behind and run her business, despite the personal cost.
Starting today
If you need assistance with starting a business in the Netherlands, you can contact Intercompany Solutions. We provide accounting services, company incorporation services and much more.
Businesses importing goods from third countries into the EU and Holland, in particular, need to declare the goods at the customs. Some imports are subject to VAT and customs taxes. Due to the established Customs Union the whole EU is considered one territory with respect to customs policies. Therefore, in general, the same rates and rules apply for all Member States (MS). Once goods enter “free circulation” (all duties are paid and the import formalities are completed) in a particular MS, for example Holland, they can circulate freely between the other MS without any further duty payments or customs formalities.
It must be noted, however, that even though the regulations are common for the EU, their application and/or interpretation may be different depending on the MS. Holland has long-standing traditions in trade and offers a business friendly, open environment. As regards customs supervision, the local Customs Authorities put a lot of effort in providing flexible solutions. There are not any reductions in duty taxes or customs control, but the Dutch Authorities usually try to perform their supervision and control in a way that has as little impact as possible on the companies’ activities.
Customs duties in Europe
The duties payable for import of goods from third countries into the EU are determined by the three main criteria described below.
Classification
The Combined Nomenclature (CN) of the EU (a list of goods with assigned codes and customs tariffs) determines the extent of payable duties as it states which goods are taxed using ad valorem duty rates (a certain percentage of their value), other specific duty rates (for example, a set value per unit of volume), or are not subject to customs duties (the so-called zero rate). When an application is submitted, the Customs Authorities issue a resolution on the product classification. A Binding Tariff Information decision ensures the correct classification of goods, because it binds all EU customs administrations and its holder. We can help you determine your goods’ classification and assist you in preparing and justifying your Binding Tariff Information application.
Valuation
When ad valorem duties apply, the EU rules for customs valuation are based on those of the World Trade Organisation and correspondingly require the application of an approach related to transaction values: the payable or paid price of the goods determines their customs value, i.e. the valuation is based on a sell/buy transaction. So basically the business transactions of the trading parties are used to specify the transaction value. The customs administrations may additionally request proof that the parties are independent and on an equal footing to demonstrate the arm’s length quality of the purchase prices. Alternative methods can only be used when transaction values are unavailable or inapplicable.
When a sell/buy transaction is used for customs valuation, particular cost elements can be added, if they have been excluded from the paid price (e.g. insurance and transport to the border of the EU, research and development costs, royalty payments or assists). Under particular circumstances some elements such as inland transport or installation can be excluded, provided that they constitute a part of the purchase price.
Origin
The European Union has concluded agreements for preferential and free trade with many countries. Provided that the strict requirements specified in these agreements are fulfilled, goods originating from the participating countries can enter the Union at a lower duty rate or free of customs charges (i.e. zero rate). Still the EU applies measures for trade defence related to imports, namely safeguard, anti-subsidy (countervailing) and antidumping measures, which usually result in additional duty. Such measures are frequently taken for goods that originate from specified countries. Therefore the customs expenditures must be carefully considered when making any production or sourcing decisions.
In contrast to the United States of America, the European Union lacks a general system for refund of paid customs duties. Therefore, when imported goods are re-exported any duties paid at the time of importation cannot be refunded. For the purpose of avoiding needless payment of duties for goods destined for markets outside the EU one can use different suspension arrangements, including customs transit (with regard to transport), inward processing (for processing) and customs warehousing (for storage). Such arrangements can also be made to postpone the transfer of import VAT and customs duties. The use of these suspension regimes usually requires authorisations that may be granted only to companies established in the EU.
Various customs reliefs are available to importers if they meet specific criteria.
Also there are simplified customs procedures for export, import and/or transit. These procedures often allow for more flexibility in managing the (logistics) operations, as customs supervision can be performed at the company’s administrative division instead of requiring a physical check. The simplification can also allow exporters to self-issue origin certificates and origin statements for commercial documents, e.g. invoices (authorised exporters). By virtue of these origin statements or certificates reduced duty rates may apply at import in the state of destination.
Excise duty
By definition excise is a type of consumption tax on particular consumer goods specified in the context of the EU. Examples of excisable goods are wine, beer, spirits, mineral oils and tobacco. Payable excise duties may reach substantial amounts and such imports require more complex customs procedures. Therefore it is advisable to seek consultancy before importation.
UCC (Union Customs Code)
At the beginning of May, 2016, the existing Community Customs Code was replaced by the new UCC. The main principles considered above remain unchanged, but the UCC introduces some significant amendments with respect to the provisions for customs value. Also the first-sale principle can no longer be applied in determining customs value.
