‘Don’t be skimpy in rewarding top talent’

In our weekly feature series, The Local looks into a successful entrepreneur's life - the story behind their successes, major challenges and how being an entrepreneur changed them forever. This week, Sparsh Sharma talks to Bertram Meyer, one of the four German co-founders of Taulia.

'Don’t be skimpy in rewarding top talent'
Taulia co-founder Bertram Meyer. Photo: DPA

'Software-as-a-service' company Taulia lets large companies send early payments to small business suppliers in exchange for a discount.

Corporations use it to strengthen their supply chains and earn higher returns on capital than they would in bank investments, while suppliers have immediate access to cash to invest in their business.

If corporations do not want to use their own capital, Taulia’s 'reverse factoring' platform offers customers the flexibility to tap Taulia’s network of institutional investors to fund the early payments.

How did you come up with this business idea?

My three Germans co-founders and I started Taulia in 2009, after realizing that there’s a tremendous inefficiency in the global supply chain. Large corporations have an unprecedented amount of excess cash, which often earns less than 1% interest, while their small business suppliers often don't get paid until 60 days or more after delivery.

So, while large corporations earn paltry returns on excess cash, their suppliers are cash-starved and often forced to take out predatory short-term loans.

We had a simple idea: if the world’s largest corporations paid their suppliers faster in exchange for a small discount, the result would be a win-win for buyers and suppliers, while also stimulating the global economy.

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

The greatest challenge early on was convincing some of the largest corporations in the world that that they could trust us with their payables process.

Once we started getting customers, they served as great references for us and it became easier for prospective customers to trust our platform.

Fundraising is a challenge for any start-up in the early stages, but just like when you earn customers, it’s easier to gain investors when you have the validation of others.

How has the journey been so far?

It has been a fantastic ride. It’s been great to get to know and serve a diverse set of customers, who all bring their own unique set of challenges and opportunities to the table.

Right now, we are focused on accelerating our growth in Germany and other European countries and it’s been exciting to bring the Taulia product back home and provide a set of solutions for German corporations.

We feel that we can really help with European supply chains, especially those in Italy and Spain where small and medium business are stretched for cash due to limited availability of bank lending.

It is a great thrill to see the Taulia team grow to more than 200 people. We now have offices in California, Texas and Utah in the US; London; Düsseldorf; and Sofia (Bulgaria).

Our employees never cease to amaze me with their intelligence and dedication. Because all of our employees own stock or have options, we are creating a culture of co-ownership and I believe that sense of ownership shines through to our customers and partners who are part of the wider Taulia family.

How has becoming an entrepreneur changed you personally?

It’s been a tremendous journey of personal growth and development. Running Taulia has taught me so much.

As an entrepreneur, you create the culture and structure of a business. I have tried to cultivate an environment that fosters trust, allows feedback in a way that is helpful as well as motivating and creates a healthy work-life balance.

I have also learnt how important it is to be resourceful as also calm in times of adversity but that can be hard when so much of your time (and wealth) are tied up to your venture. However, it is vital as leading executives set the tone for rest of the company’s response in times of trouble.

Any other personal reflections or message to budding entrepreneurs?

Apart from having the right initial idea and direction – where a business idea has a large enough market and differentiation from competitors – the single biggest success factor is the people you bring on your team. Your workplace values and culture are very important and your employees are the ones who uphold those ideals.

Hiring, career development, and employee retention are crucial: the long-term value creation difference between a motivated top-contributor and an employee that either lacks motivation or doesn’t fit for a given position is so significant that it makes or breaks your success as a company.

For a fast-growing company like Taulia, many of the new hires need to quickly become pillars of the business and lead teams. My advice would be to invest in hiring the best and brightest – don’t be skimpy in rewarding and promoting top talent.

Sparsh Sharma works as a freelance journalist for The Local and blogs about his experiences in Denmark. You can follow him on Twitter at @sparsh_s.



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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.