Monthly Archives: May 2018

Mom Is The Boss

More and more mothers are setting up businesses. And not even though they have children—but because.

By Jens Kügler

Sounds almost like a typical story: the little ones gradually grew bigger—and their mother started selling all the baby clothes and toys on eBay that she no longer needed. For lack of time for her shopping spree, she bought other items she needed late in the evenings on the web. The step to the business idea was not far away: the online exchange and shopping platform for toddler articles.

Studies have shown that women start their own businesses for other reasons than men. Personal needs often provide the initial impetus for setting up a business, while male entrepreneurs often look for business ideas that promise most profit. For mothers, however, another factor also plays a role. They often have to earn money and find it difficult to get part-time jobs in which they can reconcile job and family life. They have certain time windows for professional activities, which can best be used for independent work. That online shop mentioned above is just one example: The operator ships her articles when the children are asleep or in care.

According to KfW-Gründungsmonitor, an annual study about business starters in Germany, mothers are particularly self-employed in the areas of services, gastronomy, tax or management consultancy, advertising/marketing, cleaning services and home care services—and for the latter preferably as child minders. But the online media sector is also playing an increasingly important role. And the proportion of mothers as entrepreneurs is increasing:

The latest figures from KfW prove this. While the number of business start-ups is declining overall, the proportion of women among company founders in Germany rose from 34 percent in 2002 to 40 percent most recently. And again about 40 percent of these founders have underage children. This means that one in six start ups in Germany is founded by young mothers. There is even already a term for mother entrepreneurs in circulation: Mompreneurs.

Apparently more and more women are recalling the strengths that are said of female managers—and thus dare to take the step into self-employment. Women are more communicative, more cooperative, more empathetic towards customers and business partners. They love networking and enjoy working in a team. As far as mothers are concerned, deals often start by small talk, which creates sympathy. Mothers speak the same language about the same subject—the children. Small talk is something that men often have to learn in seminars.

According to the market research, a typical feature of female founders is their fear of financial risks. Women often start thinking in smaller dimensions—but usually with positive consequences. They do it only when the financing is really secured and increased by subsidies. Women’s businesses don’t go bankrupt as often as men’s. And as female enterpreneurs generally tend to networking, they are sought-after by franchise systems. Many franchisee companies can be founded on a part-time basis. In addition, the local orientation and limited size of franchisee-businesses meet their minimum risk thinking.

Last but not least: Many franchise networks look specifically for mothers. Especially those whose founders and franchisors are women, too. Why are self-employed mothers in demand there? They have the topic of time management under control, think “multi-disciplinary” and are experienced multi-taskers.

Is there one more reason for mothers to start up? Sure. The children are proud of their mum, the successful entrepreneur. And the more female role models there are, the more women dare to found a company. This country needs you, Mompreneurs!

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Buy A Business. Why Not?

If you want to get self-employed, you usually think of starting your own business. A modern start-up, maybe. At the same time, old entrepreneurs are desperately looking for successors—more than ever. An opportunity that far too few people take advantage of.

Written by Jens Kügler

In Germany, the number of new business founders has been declining for years. And so has the number of those who want to take over an existing company.

According to the “KfW-Gründungsmonitor 2017” (business foundation monitor of the development bank group KfW) market research, there is record employment in Germany with the side effect of fewer founders than ever. In times of a shortage of skilled workers, the many job offers to get occupied prevent possible founders from changing into self-employment. This phenomenon is all the more evident in the market for the companies to be acquired.

According to the “DIHK Report on Business Succession 2017”, almost 6,700 elderly owners asked their chambers of commerce for advice to find a successor. Almost 3,000 of them did not find a suitable successor. This marks the highest level since the beginning of the annual survey by the Association of German Chambers of Industry and Commerce (DIHK). At the same time, the number of people interested in taking over an old owner’s business has declined, too. “The gap is widening from year to year”, as the report states.

What are the reasons? Tens of thousands of German entrepreneurs reach retirement age. They want or have to sell and retire for reasons of age or health. Of course, their increasing number is also a consequence of demographic change and an ageing society. The percentage decrease in the number of young people only partly answers the question of why, of course.

The first mentioned start-up monitor of the KfW bank provides an important indication. There are basically too few people with the courage to be entrepreneurs. In addition, many of the old SME’s are family businesses. And may it have been customary over generations that the son or daughter took over the craft of the father or parents: Generation Y usually has different ideas about professional life than the hard work of a small businessman in an uncool industry such as hairdresser, plumber, master painter or stationer.

Another reason: Many potential buyers and sellers of companies find it too difficult to determine a realistic purchase price for an existing company. Especially when it comes to the seller’s “life’s work”. Many also fear inheritance tax. Others are reluctant to adopt structures that they may perceive as antiquated. Last but not least: founders often want to realize their dreams with their own brand and business idea, preferably in an innovative start-up with a stylish office instead of a musty workshop.

What does that mean? Tens of thousands of German companies are in danger of closing down within the next years. This puts hundreds of thousands of jobs at risk. In worst-case scenarios: the entire “mittelstand”. The backbone of our economy.

The appeal to the younger generation can only read: Have the courage to take over. You don’t have to create your own brand, you don’t have to build up a new business, you don’t have to make a name for yourself, you don’t have to win customers from zero. You’ll be taking over a healthy business. A large part of the risks of setting up a business are eliminated if you continue to run an existing company. Just ask your chambers of commerce which companies are currently looking for a successor. I’m sure you’ll find the right deal. And to the old entrepreneurs: Make your offer attractive and let go. The younger generation does not want to “go on as before”—and that may absolutely stimulate the business.

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