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‘Something had to be done’ says founder

In our ongoing feature series, The Local looks into a successful entrepreneur's life - the story behind his successes, major challenges and how being an entrepreneur changed him forever. This week, Sparsh Sharma talks to Stéphane-Bertin Hoffmann, co-founder at Berlin-based Sciencebite.

'Something had to be done' says founder
Stephane-Bertin Hoffmann of Sciencebite. Photo: Sciencebite

Sciencebite is an online platform connecting technology companies with highly specialized scientists for short advice and consulting sessions.

How did you come up with this business idea?

The idea behind Sciencebite came from the experience co-founder Samson Rogers and I gathered in our previous jobs working with research and development (R&D) companies.

Samson got his PhD in Physics from Cambridge before going on to work at the University of Manchester as a post-doc research assistant. During his years in academia, he was amazed at how rarely PhDs were connected to industry although they had much to gain from it, including job opportunities.

Later on, Samson joined a product development company based in Cambridge, UK, where he led several scientific and engineering projects and did some consulting for large companies.

He quickly understood that companies sought external advice from young, specialized scientists, and that something had to be done to connect those two groups that did not talk much to each other.

I met Samson when this idea was already in his head and decided to quit my consulting job to start Sciencebite with him and another friend, Lester Perez (now our CTO).

My own experience with R&D is two-fold. I first worked for a knowledge brokering firm in Berlin where my job was to manually identify and engage industry experts who could advise my clients. Later, I served R&D companies directly by advising on public funding for their technology projects.

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

We started off Sciencebite with the assumption that scientists from all trades would find immediate benefit in our offering. Many scientists actually tried our web application and found it useful, but overall we learnt that, in order to be successful, we had to start by establishing ourselves into a specific market before moving on to other industries.

We learned this by reaching out to our early users and asking them about our site: How did they find us? What did they initially expect? Were their expectations fulfilled?

I am convinced that talking to your customers as early as possible is the best way to build a product people will want to use. That’s even more true in the B2B market where there’s little room for irrational decisions.

How has the journey been so far?

Overall, it has been a great journey with lots of learning and some exhilarating moments. We released our first beta application in September 2014 on the stage of TechCrunch Disrupt Battlefield, one of the largest startup conferences, in San Francisco, USA. Although we did not make it to the big finals, we got to experience the Silicon Valley mindset first-hand and brought lots of learning back to Berlin.

We also participated in the first edition of the Google Launchpad Berlin, a one-week accelerator programme that helps startups kick start their business. Since then, we have been working hard with our early users and just released a new version of the site about a week ago.

We’ve changed our approach a little but our core concept has remained: connect industrial R&D companies with young, talented scientists for consulting sessions.

How has becoming an entrepreneur changed you, personally?

Becoming an entrepreneur has had a major influence on both my professional and private life. By becoming your own boss, you suddenly have to take on more responsibility as well as lead by example. This obviously influences how I feel and think outside of work.

You also have to deal with pressure. I found practicing meditation regularly helped me maintain a healthy balance as well as a calm mind. I would recommend it to anyone.

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

My advice would be to carefully consider why you want to start off on your own and what it will mean both in your private and professional life. It is quite normal to be afraid of the unknown before taking the plunge into the entrepreneurial life.

However, I have found that by imagining the worst that could happen to me in case my company would fail, I could easily see that the worst really wasn’t that bad and that the risk was worth taking.

At the end, it is all about following your dreams. After all, what’s worse? Having regrets for missing a chance that was waiting for you or temporarily relinquishing the security of a job you didn't like anyways? Personally, I would always say the first.

Are you an entrepreneur in Germany? Contact us and we might feature your story

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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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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