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JOBTALK GERMANY: ENTREPRENEUR SERIES

JOBS

‘You need to learn to manage emotions’

In a new feature, The Local will look into a successful entrepreneur's life each week - the story behind their successes, major challenges and how being an entrepreneur changed their life forever. Kicking things off from Berlin this week AUPEO! co-founder and CEO Holger Weiss.

'You need to learn to manage emotions'
Photo courtesy Holger Weiss.

Founded in Berlin in 2008, AUPEO! is a leading service provider for audio content streaming with a global reach. It provides personalized content for consumers on the go, learning their listening preferences and compiling individual radio programs for each user. For businesses, AUPEO! provides its streaming platform and technologies to be integrated with their own products.

How did you come up with this business idea?

The AUPEO! of today was developed over the last four years. We began as a music streaming service, offering radio service, like lastFM. I was one of the first angel investors and board members. In 2010, I became CEO. In 2008, digital content was on its way to the cloud and more devices started getting connected via the cloud. So, the idea was to offer a specialized service infrastructure to serve these devices.

AUPEO! started as a website, in technical parlance; a platform with an application programming interface (API). Through this API, we were integrated with millions of laptops and wi-fi radios within a short time.

At that time, we also saw the connected car as a strategic pillar of growth. The massive push to mobile service thanks to the success of smartphones brought us eventually to the automotive industry much faster than we had expected.

What were the initial challenges? How did you overcome them?

The fundamental difference between an established business and a start-up is that you have no comparison data, no experience, no market analysis. So, you start with a hypothesis and off you go. My personal experience from the two companies I helped build has been that as an entrepreneur, you have to remain very flexible. Business models don’t work, you could face distribution issues, legal issues or you suddenly realize that though your idea is great, the consumer doesn’t know why he would need it. Then there are other challenges like funding and building a stellar team.

There is no recipe for overcoming these. If you see there is need for a change, don’t wait. Time matters in a young company and that counts for the product as well as team.

How has the journey been so far?

It is indeed a journey. That is also the image I use when mentoring young founders. I also use the roller-coaster image. If I learned one important thing over the past 15 years, it’s that life as an entrepreneur is not linear, you will usually not arrive where you have planned to arrive, or at least not in the intended way.

The AUPEO! story is a success. We understood that building a music streaming service would require a complete different setup from the one we had at that time. Coping with heavyweights like Pandora or Spotify is not possible. We understood our strength in technology and we built excellent relationships with automotive manufacturers like BMW and Mercedes. Today AUPEO! is clearly the leading platform globally when it comes to in-car audio streaming. We will soon introduce our new offering, which will go beyond music and will revolutionize the way people are listening to radio in cars.

Of course, the greatest moment for an entrepreneur is a successful exit. In April 2013, AUPEO! got acquired by Panasonic Automotive Systems of America and we are glad to be a part of it.

Has becoming an entrepreneur changed you personally?

Apparently it has changed me, at least that's what my family and friends say. I have tried to separate professional life from private – as much as possible. It’s important to understand there are things other than your company. Having an intact family life is one of the most important values for an entrepreneur.

Any other personal reflections and/ or message to budding entrepreneurs?

As an entrepreneur, you will face many issues. There is a lot of responsibility and you need to learn to manage emotions. You are not supposed to take things personally but you do that as you develop a protective shield.

On the other hand, you become quicker in taking decisions, which helps in other areas of life. Also, always remember Winston Churchill's words: "Success consists of going from failure to failure without loss of enthusiasm."

Sparsh Sharma holds a Master's in business administration and a Bachelor's in electrical engineering. After having worked in the top Indian media companies, he decided to come to Denmark in the fall of 2012 to study at Aarhus University and later worked at Lego. A Danish green card holder, he is currently looking for marketing or consulting opportunities globally, while working as a freelance journalist for The Local and blogging about his experiences in Denmark. You can follow him on Twitter at @sparsh_s

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WORKING IN GERMANY

7 tips for how to survive as a freelancer in Germany

Taking the decision to go it alone and freelance in Germany can be a daunting prospect. But, if you do it right, it can be an exciting and liberating path. Here are some of our top tips on how to survive.

7 tips for how to survive as a freelancer in Germany

1. Get a tax advisor

The German tax system is complicated, even for Germans. All the associated paperwork uses the Amtsprache (authority language) which is more like legalese than ‘normal’ German, and mistakes when filling out tax forms can cause you, at best, a massive headache and, at worst, a costly fine. So it’s best that you employ someone who knows what they’re doing to help you out.

That person is called a Steuerberater (tax advisor) in Germany. They will help you register with the tax office, correspond with them and submit your tax declarations.

Be aware that, in Germany, different deadlines apply for tax returns depending on whether you employ an official tax advisor or not. If you are doing the tax return on your own, the deadline for submitting your annual tax return is earlier than if you use a tax advisor’s services. 

READ ALSO: What NOT to do when you’re freelancing in Germany

When looking for a tax advisor, a top tip is to use your network to get recommendations. Ideally, you want someone who will do more than just fill in the forms for you, but who will actually advise you on how best to manage your business finances so that you can make tax savings.

2. Keep your accounting in order

The better you keep your own accounts in order, the easier it will be for your tax advisor to compile your tax declarations and therefore the cheaper their services will be.

As a freelancer, there are a lot of costs you can deduct from your taxes – from train tickets, working materials, to meals out – so it’s best to keep hold of all your receipts and to keep them in good order.

2 euros and 50 cents lie on a receipt in a beer garden. Photo: picture alliance/dpa | Peter Kneffel

In Germany, you’re obliged to keep hold of receipts for two years, in case of a tax inspection, so it’s a good idea to photocopy the type of machine-printed receipts you get from restaurants so that they stay legible for a long time.

There are also a few things to be aware of when writing your own invoices. Firstly, make sure that you include your tax number. This isn’t the 11-digit Steueridentifikationsnummer that everyone gets when registering in Germany, but the 10-digit Steuernummer you get from the Finanzamt after registering yourself as a freelancer. 

Most companies won’t pay you if you don’t have this on your invoices so make sure you include it.

You should also make sure that you number your invoices properly – ideally in ascending order so that you can easily keep track of them. You are not allowed to issue two invoices with the same number and if you do so and the finance office notices, you could face an inspection of your whole accounting system.

There are numerous great accounting software programmes you can use to help you, such as Lexoffice and Sevdesk and, even if you have to pay for them, the costs will be tax deductible!

3. Find out if you’re eligible for financial support

In Germany, there are several opportunities for freelancers to gain financial support and to cut their outgoings, and its worth finding out if you’re eligible for them.

If you’re claiming unemployment benefits under ALG 1 and are thinking about becoming a freelancer, the employment office offers a special type of financial support to help you to get your freelance business off the ground.

Called the Grundungszuschuss (“foundation grant”) the payment is a six-month grant equalling your monthly entitlement under ALG 1 plus €300 towards your insurance costs can be applied for those in receipt of this unemployment benefit.

READ ALSO: Will freelancers benefit from Germany’s €300 energy allowance?

If you are engaged in some form of artistic profession in Germany – which can include journalism to pottery – you may be entitled to membership to the Kunstlersozialkasse (artists’ social insurance).

Being a member of the KSK means you only have to pay half of your health insurance and pension contributions, and the KSK will pay the rest.

4. Work out how much you think you will earn

As with starting any business, you need to have some idea of your expected earnings from the outset.

If you’re just starting out as a freelancer, or have some freelance gigs on the side of an employment position, then it might be worth considering registering yourself as a Kleinunternehmer (“small business”).

As a Kleinunternehmer, you can currently earn up to €22.000 per year without having to charge VAT and having to submit only yearly tax declarations. 

An income tax declaration form lies on a table. Photo: picture alliance/dpa/dpa-Zentralbild | Hans-Jürgen Wiedl

Be aware that if you are registered as this kind of freelancer, you must include the following sentence in your invoices: ‘Gemäß § 19 UStG wird keine Umsatzsteuer berechnet’ which means ‘In accordance with Paragrah19 of the German VAT law, no VAT has been added to this invoice.’

READ ALSO: Everything you need to know about your German tax return in 2022

If you think you will earn more than €22.000 per year, you will need to pay Umsatzsteuer (VAT) and will have to submit tax declarations in advance and more often. Depending on how much you earn, this could be every month or every quarter. 

5. Get your insurance in order

In Germany, it’s a legal requirement to have health insurance.

If you’ve just made the move from employment to being a freelancer and want to keep the same health insurer, you should get in contact with your health insurance provider straight away to tell them about your change of circumstances. They will ask you to re-register and to tell them your projected freelance earnings for the year, so they can amend your monthly fees.

If you don’t keep your health insurer provider updated, you could continue to be charged the higher rate that you had from your previous salary.

The insurance cards of the health insurance companies DAK, AOK, Barmer and Techniker-Krankenkasse TK lie with euro notes under a stethoscope. Photo: picture alliance / dpa | Daniel Karmann

It’s not just health insurance you need to think about as a freelancer. It’s also wise to think about protecting yourself from any sort of claims that could arise as a result of any working mishaps. 

If, for example, you lose your laptop which contains confidential client information, you need to be protected against claims.

That’s why it’s good to have both Betriebshaftversicherung (business liability insurance) and Rechtschutzversicherung (legal protection insurance).

6. Plan your time wisely

All of these bureaucratic obligations take time. So it’s really important that you take account of that when planning your time. For example, planning half a day a week to deal with your invoices, filing, emails to clients, and conversations with authorities can be really beneficial when scheduling your working time. 

7. Grow your network

As a freelancer, networking is absolutely crucial to success. 

Keep an up-to-date profile on websites like LinkedIn and German equivalent XING and keep in contact with anyone you’ve ever worked with, no matter how brief the contact was. 

Having a network is not only about getting more clients, but also about building a support network in your field to exchange advice, tips and generally for your own enrichment. 

Participating in workshops related to your field, going to seminars, and meet-ups, can be great ways of broadening your network. 

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