MODULE VIII
FEASIBILITY TRAINING /
COST BENEFIT ANALYSES
AGORA Europe II - Common
Integrated Management e-Learning
System for the development of
professional competition skills in the
small scale urban commerce in
European dimension
2011-1-DE2-LEO05-07994
This project has been funded with support from
the European Commission.
This publication reflects the views only of the
author, and the Commission cannot be held
responsible for any use which may be made of
the information contained therein.
LdV Project “AGORA Europe II” – Module VIII
TABLE OF CONTENTS
TABLE OF CONTENTS.......................................................................... 2
MODULE DESCRIPTION ..................................................................... 3
1. INTRODUCTION ................................................................................. 6
2. IDENTIFY THE TRADING AREA FOR THE STORE ........................... 7
3. COMMODITIES ................................................................................... 9
4. ASSESSING THE MARKET POTENTIAL ......................................... 11
5. IDENTIFYING SIZE AND LAYOUT FOR THE STORE...................... 14
6. ASPECTS OF RENT AND LEASING ................................................ 16
7. THE NECESSARY EQUIPMENT....................................................... 17
8. ANNUAL SALES AND INCOME ....................................................... 19
9. BUSINESSPLAN ............................................................................... 21
10.
REGISTRATION- LICENSES AND TAXES .................................... 24
11.
REGULATORY / ENVIRONMENTAL ISSUES ............................... 39
12.
SAFETY / SECURITY ..................................................................... 43
REFERENCES ......................................................................................... 45
APPENDICES .......................................................................................... 46
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MODULE DESCRIPTION
MODULE TITLE
FEASIBILITY TRAINING /
COST BENEFIT ANALYSES
CODE
VIII
KEYWORDS
Location,
commodities,
market
potential,
store
layout,
rent,
equipment, sales and income, business
plan, taxes
TARGET GROUP
The target group consists of shop
owners, entrepreneurs and managers
in the retail sector. Typically the
business is situated in the seed phase.
LEVEL
Corresponds to trainee Level 1-2 of
the European Qualifications Framework
(EQF).
CAREER
OPPORTUNITIES
Shop owner, retail store manager,
floor manager, entrepreneur

AIMS OF MODULE

The graduate of this program will be
able to found and lead business on a
basic level in the retail industries.
The range of skill acquired by the
participant includes mainly regulartory
issues in business administration. This
module provides steps in for the
earliest phase in founding a grocery or
convenience store and sensitizes the
manager in basic analytical skills. The
participant will be able to estimate the
market potential of a community and
find the best located place for a store.
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He outght to be able to estimate the
optimal range of commodities and the
necessary equipment. Furthermore he
will be able to administrate the
business in tax and financial issues.
LEARNING
OUTCOMES
Upon successful completion of the
module the participant will be
 Able
to
evaluate
the
environment
of
the
store
location

Able to estimate the potential
within an area with specific
competitors

Able to estimate the financial
potential of a community

Learned to respect the key
factors in successful founding

Learnd to be aware of factors
influencing the quality of a
contract

Learned
to
be
aware
of
necessary
equipment
and
commonly used materials and
Tools in Business

Able to estimate the monthly
and annual sales and incomes

Able to create a qualitative
Business Plan and estimate the
deficit of it

Learn to overview the current
tax and registration regulatories
PREREQUISITE(S) Use of basic ICT
SKILLS:
PREREQUISITE(S) I - Some Basic Concepts of Grocery
Retailing
COURSE:
III - Supervisory Soft Skills
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V - Workplace Computer Skills
VII - Operations/Account
Managements
GUIDED
LEARNING
HOURS:
6 houres
COMPETENCY
Cost benefit analyses
ASSESMENT
Assessment will consist of a multiplechoice test. Each test will consist of
multiple-choice questions which will
test
candidates’
knowledge
and
understanding across the Learning
Outcomes.
CATEGORY
COST (cost optimization)
TIME (Efficient time management)
S-QUALITY (Service quality)
M-QUALITY (Management quality)
SUPLEMANTARY
MATERIAL(S)
NONE
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1. INTRODUCTION
Dear Participant,
Welcome to this Module! This module is intended for persons who about to
found and manage a store at retail sector, especially at markets and
groceries. If you have the aim to bring a store to success and administrate a
business profitably without having fundamental education in this area you
might want to consider doing this learning module. Knowing these basics
gives you the opportunity not to step in the fundamental mistakes of
administrating a grocery or convenience store. It gives you a fundamental
overview to know where to start or what to learn.
This module compiles together typical explanations, some practical tips
which must be known to be able to make founding successful.
Warm regards,
Agora Project Team
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2. Identify the trading area for the store
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Choosing the Location
“There are several factors to consider in
determining a location. The store should
be accessible to potential customers with
ample parking. Proximity to other
businesses and traffic density are both
important. The history of the site and
restrictive ordinances may make the site
undesirable. The rentpaying capacity of
the business, terms of the lease, or the
rent-advertising relationship should also
be considered. The final considerations in choosing a location are (1) the
community in which to locate and (2) the specific site within the community.
Selecting a site location for a grocery store is extremely important for
success. A location for any retail operation can cause failure. The cost of the
store’s location is often directly related to the store’s success. Positioning a
store away from high traffic counts reduces sales. Stores should not be
positioned so as to depend on revenue from traffic along small highways if it
is a possibility that an improved alternate route will be developed in the
future. Also, consider the danger of establishing a store near a single large
employer that may close or relocate. Zoning is another site consideration.
Many communities have zoning restrictions on industrial, commercial, and
residential properties. Some communities are further zoned within those
classifications such as to the number of commercial units in an area or the
size and architecture of the building.
The community selected must have a large enough customer base to
support the store. The economic base of the community should be stable
and the demographic characteristics compatible with the intended market.
Entrepreneurs may want to contact wholesale food distributors for help in
determining the probability of success in a community. Many distributors
have store or real estate development specialists who can provide a formula
based on “per capita weekly expenditures” used to estimate the probability
for success. Distributors may use formulas to determine the expected
income of the store based on profit margins expected. Generally, stores
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range in size from 2.1-2.8 square feet per capita to 4.0-4.5 square feet per
capita with inventory averaging $17 per square foot. Weighing these
considerations according to the business’s needs and goals will help in the
decision process.
The following information helps in formulating a community’s economic
base: (1) percentage of people employed full-time and employment trends,
(2) average family income, and (3) per capita total annual grocery sales (if
no information is available for the community, perhaps compare similar
communities). It is also helpful to learn about the community by looking and
listening. What does the local newspaper report about the community? How
do residents feel about their community? Do high school and/or college
graduates have to leave the area to find gainful employment? Are other new
businesses opening in the area? Is there new construction? Is there a
progressive chamber of commerce or a local economic development group?”
[HEN – 1998]
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2. Purchasing pool
Another aspect that should
be considered is a purchasing
pool. This is an important
survival strategy. Purchasing
pools or buying groups are
groups of retailers in an
industry where historically it was initially just about lowering purchase prices
by bundling the purchase of goods. Meanwhile, the composite group of trade
also open up other synergies, such as in advertising or design of the Internet
site.
If you want to press in an already well-staffed retail business, such as shoes,
it is now generally available only through participation in a purchasing
cooperative. Otherwise you would incur too high costs of procurement.
[DUN]
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3. Commodities
3.1. Commodity Mix
“Small stores must carefully
stock merchandise to
maximize sales and profits
per dollar of inventory.
Generally, store stock
ranges from 2,800 to 3,200
items in up to 400
categories.
A store owner, manager,
distributor, and, most
importantly, the customer
determines what makes a
good product mix. Location,
competition, season, and availability of items are all important factors to be
considered. Over time, the inventory can be fine-tuned by tracking what
sells and what is left over. Non-movers should be marked down to help
make space for faster moving items.
Grocers should also consider which categories provide the typical gross profit
margins to sustain operations. Lower margin items such as baked goods and
dairy products are stocked to provide a balanced product mix. Nonfood
inventory such as health and beauty aids, magazines, and ice add to a
balanced product mix. These items are typically available only through route
vendors or rack jobbers who both supply the racks and maintain them for
the stores.” [HEN – 1998]
3.2. Suppliers
“The types of items that customers purchase dictate the inventory selection
and the number of suppliers needed. As in any business, supplier
relationships are important. Solid relationships with some reliable suppliers
are key to operations. Usually no one supplier can meet all needs. Most
stores buy either through a manufacturer representative or through
independents who represent several companies. Stores also buy from
wholesalers or jobbers, known as distributors, who represent two or more
manufacturers. Distributors are generally more expensive than
manufacturers; however, they can supply stores with smaller orders from a
variety of manufacturers. Generally, the only items stores can get from
manufacturers are milk and bread. Moreover, wholesalers provide many
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services, such as store design, financing, and other retail support services
that can help a retailer be competitive and profitable.
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4. Assessing the market potential
One way to approximate the potential markets for grocery stores is to
examine the average sales, the average number of employees per store, and
the average number of residents per grocery store.
Average sales (p.a.) = total sales / 12 (months)
The total sales represent the amount of the respective monthly revenue.
This amount has to be divided by the number of months (12) per year.
Average number of employees per store = number of all employees /
number of all stores
The number of all employees can be
calculated by the personnel policy. It
has to be divided by the number of all
stores which should be known by the
owner, Director or Manager.
Average number of residents per
grocery store = number of all residents
/ number of all grocery stores
The number of all residents means the
amount of residents in the areas
around the grocery stores. The sum has to be divided by the number of all
grocery stores we offer in these urban districts.
Classifying these ratios by size of county permits some insight into the
extent to which the markets are already saturated. In other words, if a
potential entrepreneur was interested in a county that is well above the
average in concentration of grocery stores already, more time should be
spent considering the viability of this area as a potential site. “In 2011 the
nationwide retail sales in Germany was about 414 billion €. Stuttgart
counties in 2011 show an average of 13.89 billion € annually in counties with
a population of 10,000 and larger. Therefore the retail sector in Stuttgart
counties achieves at least 26.3 % of the total sales in Baden-Wuerttemberg.
In 2011 the retail sales per capita was about 6,832 € with a population of
601,646.” [IHK–2011]
The average citizen has therefore in 2011 a purchasing power of € 19.684
expected to be spent on consumption, among other things like the rent or
living expenses. The purchasing power is not always spent at their place of
origin. Information on purchasing power flows contains the so-called
centrality index. The retail centrality of a place is the ratio of locally made
retail sales to the existing at retail relevant purchasing power (Retail
purchasing power per capita, according to GfK Berlin: EUR 4780 in 2010).
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The greater the centrality of a place is, the greater the suction force in the
purchasing power of the surrounding area. Factors for the centrality of a
place are as the industry mix, transport links and the quality and quantity of
retail space.
These averages, of course, conceal many differences among stores. Location
is especially important and the fact that a store already exists may make a
store in a neighboring city not profitable. The average number of employees
per store also varies by population size. In 2010 2.94 million people were
employed in the retail sector in Germany. The total population in Germany
was about 80 million people in the year 2010. In the smallest counties, the
average store employs 10 workers compared with an average of 23.6
employees in counties larger than 50,000. There is a steady progression in
staff size by county size. This information can provide potential business
owners with an idea of the number of employees they may need to hire
when starting a business. Detailed information by county is provided in
Appendix C. Another approach to determining store viability is to examine
the number of stores per population. Regions with a larger number of
persons per store are more likely to support an additional store. These
comparisons, however, do not compare for size of store and therefore must
be used carefully. In counties larger than 50,000, the average store serves
2,721 residents compared with an average of 1,461 in counties smaller than
10,000.
While the market comparison information can provide broad insights into the
feasibility of an additional business, more detailed data is necessary to make
sound business decisions. This information is available from several sources.
First, Dun & Bradstreet’s Marketing Service can provide lists of businesses
and limited information about output and sales volumes. This information
can be obtained at the city level. Second, some information regarding sales
tax receipts in broad Kind of Business categories is available from the Illinois
Department of Revenue. Third, the Illinois Department of Commerce and
Community Affairs has a network of Business and Industry Data Centers to
assist the business community in locating information needed to start a
business. These centers, combined with the Small Business Development
Centers, can offer a range of useful services to help determine market
feasibility. Fourth, more specific information about the number of stores a
region can support is often available from professional groups and trade
associations.” [HEN – 1998]
Direct competitors are companies who offer goods and services in the
catchment area of your business identical or substantially similar with yours
and thus competing for the purchasing power of your customers. To
determine your opportunities in comparision to your competitors, you should
collect the competitors quantitatively that are relevant for you. Distinguish
for example between good, satisfactory and poor characteristic and assign
points accordingly. The higher the score obtained by a competitor, the more
your business can be affected by it.
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Important aspects are








the outward appearance (advertising, store design, window, image)
the sale room (available space, merchandise presentation)
the range (range of width, depth range, quality, price range)
the service (service line, service, consulting)
the customers (How is the customer base, how is the customer
traffic?)
the location
the parking areas
the suppliers.
For more relevant questions you should ask yourself about the competition
see Appendix A.
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5. Identifying size and layout for the store
5.1. Layout and Size
“Independent grocery stores range in size: A store of 1,500 to 4,999 square
feet provides enough space to stock a variety of merchandise but small
stores with only 400 square feet can also be successful in meeting certain
market segments. When laying out the store, generally about 25 percent is
devoted to the checkout-customer service area. The checkout should be
within ten feet of the front door and contain impulse items such as candy,
magazines, cigarettes, film, batteries, and razor blades.
The balance of the display aisles may be 60 percent. Position the aisles so
that customers must walk
through in-demand items to
reach milk and other
beverages in refrigerated
coolers. Often inventory is
relocated to avoid
customers establishing
“shopping routes” and
therefore, additional items
are often seen and
purchased when customers
seek regularly purchased
items. The aisles should be
as wide as possible with
clean, no wax, no slip floors
for easy maintenance—
cleanliness is essential.
Walls painted a light color or
white make the store look
larger and allow brightly
colored signs to stand out.
Only 10 percent of the floor space should be devoted to receiving and
storage, and 5 percent to office space. Remember customers are not in the
back room or the office; although necessary, that area does not create
profit. Receiving should be on the same side of the store as the milk and
other refrigerated or frozen foods to avoid delays in refrigerating new stock.
Generally, carbonated beverages and beer are delivered by the vendor and
can be located on the opposite side of the store, creating a cross pattern of
impulse buying for customers purchasing only a few items.” [HEN – 1998]
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5.2. Layout of Inventory
“Large supermarkets are organized differently from smaller stores.
Customers who visit the smaller stores shop differently than in
supermarkets. Small grocery stores have two types of shoppers: destination
customers who know what they want and head directly for it, and shopping
customers who move throughout the store gathering pre-specified items and
goods that catch their interest.
Design the layout of the store with the general objective being to take
advantage of merchandise exhibited with the customers’ traffic patterns and
to encourage additional traffic flow in other areas. Designation merchandise
is placed in the rear of the store (milk and beverages). Slow selling
merchandise is also placed near the rear of the store. Convenience goods
are placed near the front of the store with the cash register and the impulse
goods.” [HEN – 1998]
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6. Aspects of Rent and Leasing
“If a business owner does not own the real estate, leasing can be structured
in several ways. New stores often do better with a short-term lease of only
one or two years with a set renewal option of five years if the business
achieves targeted profits. This set renewal option prevents a business owner
from losing the lease after a short period of time at a desirable location.
Percentage leases require businesses to pay a portion of the gross revenue,
in addition to a fixed monthly amount. This lease agreement provides
landlords a definite base rent plus an additional amount as the business
grows. Other issues to consider are who pays for remodeling; what
alterations are allowed; snow/ice removal; lawn care; internal and external
signs; and permission to expand or engage in additional lines of business. A
lease is a binding legal document. Money spent on competent legal counsel
is well worth the expense. Negotiation is always an option. If the lease does
not seem acceptable, look elsewhere and come back if there are no better
offers or locations.
Leasing Checklist:








Siding (Is the facade designed in a modern way? Is there any chance to
attach outdoor advertising? Is sun protection guaranteed?)
Entrance zone (Is the entrance at a favorable place within the pedestrian
flow and accessible from the street? Is there unhindered access?)
Technical facilities (power supply, heating, ventilation, air condition, if
necessary lift or freight elevator)
Lighting (Is the room lighting sufficient and appropriate?)
Equipment (How is the position of the shop window? Is there enough
decoration area? Is the sales room designed in an appropriate and
attractive way?)
Sales room (Is the sales room offering a good accessibility and enough
opportunities to move for the clients and employees? Is it usable for
wheelchair users?)
Delivery of goods (Are there enough opportunities to stop at the
receiving department? Does the receiving department need technical
features?)
Amount of rent (How much is the rent per square meter? Is the rent
customary in a place?)” [IHK – 2012]
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7. The necessary equipment
7.1 Intruduction
Equipment and fixtures are a major portion of the start-up cost for a new
store. It may well be worth the time to shop around. Also, consider a
leasing-purchasing agreement for equipment to conserve capital. Suppliers
of equipment can be found under “Store Fixtures” or “Restaurant Equipment
and Supplies” in the Yellow Pages and the internet.
“Suggested fixtures and equipment:









Shelves, cupboards, tables, display cases, clothes racks
Floor coverings
Checkout and packing table
Seating areas
Lighting, air condition
Storage systems for goods
Emergency arrangements (fire extinguishers, first aid kid)
If necessary kitchen, lounge, dressing room
If necessary service counters, office work places, workshops”
[OGUM – 2004]
7.2 Used Equipment
Buying used equipment, or a combination of new and used, can substantially
reduce start-up costs. However, new equipment also contains warranty and
service agreements. Again, shopping around may save money and also
remember to check the “Business Opportunities” section of the newspaper.
While the advantage of leasing is significantly less initial cash outlay, the
disadvantage is that you do not acquire equity and build a balance sheet. A
financial statement showing a healthy net worth is good for any business.
Consult an accountant for help in making informed choices. Changes in tax
laws regarding depreciation have made purchasing equipment more
advantageous. If the equipment is needed short-term, a leased item ceases
to be an expense when it is no longer needed. Office Equipment Used desks,
chairs, file cabinets, and book shelves, can be purchased. Computers can be
great time savers and software is available for special businesses. Standalone microcomputers are effective tools for billing and inventory in small
businesses. A workable system must be devised before it can be
computerized in order to justify the expense. Due to the changing nature of
computer technology, care should be used when purchasing a system to
make sure that it allows adjustments to changing technology. Other general
office equipment and supplies will be needed. Sales receipts can be printed
or standardized forms can be used. A few hundred dollars should buy
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letterhead stationary, envelopes, business cards, bags, boxes, cash register
tape, writing supplies, and other minor supplies.
7.3 Phone and Utilities
Although single line telephones may serve the purpose,
if the store will be sending and receiving faxes, using a
computer to place orders with the supplier, or is simply
busy, a multi-line system may be required. Telephone
companies and other utilities require security deposits if
a payment record of some type has not been
established. Be sure the utility companies and service
provided to the building can grow with business needs.
7.4 Security
Small merchandise, office equipment, and cash attract more than paying
customers. A well-lit store can be a deterrent to burglars and shoplifters.
Store owners attempt to reduce costly shrinkage by adding mirrors, burglar
alarms, and closed-circuit monitors for security. “Nevertheless, a large
amount should be stored in a safe. Besides, shop owners should avoid
employing one person in the shop during opening hours.” [OGUM – 2004].
Costs for security systems vary widely; however, some security firms
specialize in grocery and retail security.
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8. Annual sales and income
8.1 Sales and Profits
Since most stores operate on narrow gross profit margins of 29 to 33
percent, operating expenses must be watched closely. Inventory must be
accurately priced and be current. Electrical expenses vary depending on the
number of refrigeration and freezing units. Large signs should not be placed
on the front of glass doors, forcing customers to open the door to make a
selection. Given these types of factors, it helps to estimate sales and profits
before the store opens. Projections can be adjusted once operating
information is available.
The following steps can help in estimating monthly sales and profits
(Entrepreneur, Inc. 1988):
1. Start with the store size in square feet.
2. Estimate the annual sales per square foot for the business based on
sales per square foot for other businesses in the same trade area and
similar businesses in other areas.
3. Calculate the total annual sales volume: dollars per square foot x
square feet = total sales.
4. Estimate the seasonal sales patterns for the business, attributing
varying percentages of the total volume to each month of the year.
5. Allocate the total annual sales calculated in step 3 to months: annual
sales x monthly percentages = monthly sales.
6. Adjust these normal monthly sales totals to reflect the start-up period;
this is strictly a value judgment.
7. Totals of goods sold deducted from the monthly sales. The remainder
is your gross profit margin. Then deduct fixed and variable expenses.
The remainder is net profit before taxes.
Most new stores face difficulties in starting and are able to achieve success
only after several hurdles are overcome. Knowing ahead of time what to
expect can help: Consider the failure factors listed below (Entrepreneur, Inc.
1988):










Inefficient control over costs and quality of product
Bad stock control
Underpricing of goods sold
Bad customer relations
Failure to promote and maintain a favorable public image
Bad relations with suppliers
Inability of management to reach decisions and act on them
Failure to keep pace with management system
Illness of key personnel
Reluctance to seek professional assistance
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
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


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

Failure to minimize taxation through tax planning
Inadequate insurance
Loss of sales momentum
Bad personnel relations
Loss of key personnel
Lack of staff training
Lack of knowledge of merchandise
Inability to cope adequately with competition
Competition disregarded due to complacency
Failure to anticipate market trends
Loose control of liquid assets
Insufficient working capital or incorrect gearing of capital borrowings
 Growth without adequate capitalization
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9. Businessplan
“The creation of a business plan is essential to obtaining financing and gives
the business direction. The business plan is an excellent way to
communicate to bankers, partners, suppliers, and other businesspeople.
Creating a business plan gives the owner a realistic approach to short-term
implementation of the business for the next three to five years.
Business plans vary with the type of business for which the plan is prepared,
in addition to the business’s reputation and age. However, business plans
generally follow a similar format. The aid of an accountant or the area Small
Business Development Center is helpful in preparing a thorough plan. A
Small Business Development Center business plan checklist is provided in
Appendix A: Business Plan Checklist by.” [HEN – 1998]
Generally, a business plan includes the following components:
A Plan Summary should include the following:







“company’s name
name of the entrepreneur
business purpose
what is so special about the business purpose?
description of the customers and how they are achieved by the offer
capital requirements for starting a business
planned start of starting a business.” [SCH – 2008/2012]
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A Market Analysis should include the following:
“a) customer
 Who are the customers?
 Where are the customers?
 Are there customers already?
 short- and long-term sales potential,
 dependence on a small group of major clients,
 requirements and needs of the customers,
 relation between the business purpose and the benefit for customers.
b) competition
 Who are the competitors?
 Where are the competitors?
 prices of comparable products and services from competitors,
 advantages over the competition,
 disadvantages over the competition.
c) location
 Where is the location?
 Why is it your location?
 What are the advantages of the location?
 What are the disadvantages of the location?
 development of the location.” [SCH – 2010]
A Marketing Plan should include the following:
“a) price
 pricing strategy
 price of the product
 Why at that price?
 calculation.
b) sales
 sales targets (short-, medium-, long-term),
 sales areas,
 sales partners,
 distributions costs.
c) advertisement
 advertising strategy,
 advertising effort,
 advertising costs.” [SCH – 2010]
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“Recordkeeping, payroll, and accounting are also necessary for the success
of the business. Recordkeeping and payroll are functions provided for or by
the business. Accounting is the analysis of those functions. Accounting gives
the owner a clear picture of the strength and status of the business.
Accountants may assist in establishing the type and arrangement of books
most suitable for the business. Accountants may also provide tax advice and
reminders. Attorneys generally cover a variety of specialties. It is important
to hire one with the specific expertise needed. Among those most important
are availability and time for clients, and expertise in the grocery or retail
field. It is important to choose bankers, accountants, and attorneys wisely in
order to utilize the services of these skilled professional consultants.” [HEN –
1998]
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10. Registration- licenses and taxes
10.1 Formal steps of a business-startup
Before implementing your business-startup, a series of formal steps is
necessary. The following chart shows where, by whom and what has to be
done. It is taken from the IHK website and does not lay any claim to
completeness. Take the opportunity to talk to an official employee or a
foundation consultant about the necessary formalities.
In principle, these steps shall apply throughout Germany and any business.
Only rarely marginal differences could apply between individual federal
states. Some of the “what” could be done at the same department
depending on each community.
Where?
What?
Who?
Registration directly
at the tax office
freelance independence
(gem.§18 EstG)
You
Trade Office
business registration*). To
City Hall of the
some extent there are
municipality where
permission and monitoring
you run your
duties:
You;
a data transmission
by the trade office
does not relieve you
from your other
obligations.
business.
Data of the business
registration are
going to be
transmited to the
marked institutions.
*)
 in trade (see below)
 in industry, commerce
and services: trade in
certain products,
brokers, developer,
financial services
provider, auctioneer,
security, catering,
traffic and itinerant
trade
Tax office *)
depending on the
location of the office
 record keeping and
accounting obligations
 questionnaires about
You; data
transmission of the
trade office
future accounting
types, sales and
profits.
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 Then you receive a tax
number.
Chamber of Crafts *)
chamber of industry
and commerce *)
State Statistical
Office *)
employer's liability
insurance
association *)
www.dguv.de
registration obligation if a
trade is operated according
to the craft codes. For some
trades a master’s certificate
is required.
Registration if a trade, which
is no craft is operated.
statistical coverage
 registration of a
You; data
transmission of the
trade office
data transmission of
the trade office
data transmission of
the trade office
You
compulsory insurance
for employees
according to § 192 SGB
VII within a week
 A binding or voluntary
personal insurance for
entrepreneurs depends
on the industry. A
voluntary insurance
must be requested in
writing.
Employment Agency
If you hire employees you
You
have to apply for a
permanent number at the
Betriebsnummern-Service
Bundesagentur für Arbeit
Eschberger Weg 68
66121 Saarbrücken
other social
insurance carriers
(health insurance,
BfA )
commercial register
at the responsible
local court
 compulsory insurance
You
(for employees) or
 optional insurance (for
entrepreneurs)
If you require a registration.
It is binding under specific
conditions.
You; it goes
through your notary
public.
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professional
association
If you want to become a
You
member: voluntary
registration
*) This applies corresponding to every single type of business registration –
thus also for registration or re-registration.
10.2. Corporate taxes of entrepreneurs
10.2.1. The most important taxes
When opening the company,
every entrepreneur gets a
questionnaire for tax purpose
by the tax office. Therein he
has to supply information of
personal data and especially of
the estimated profit and
additional income. At
tradesmen the tax office
receives information about the
company’s foundation by the trade office. Self-employed workers have to
display their work on their own with the tax office.
10.2.2. Income Tax
Assessment basis of the income tax is the taxable income of a natural
person within the assessment period. The assesment period is generally the
calender year. The Income Tax Act (ITA) examines a total of seven income
types, which are liable to the Income Tax. This includes the so-called profit
income, which means income from the trade business and freelance work.
The determination of the taxable income is as follows (simplified):
Total revenue of the different types of income
+ additional renumeration amount
- loss compensation
= Total income
- relief amount
- tax allowance for farmers and foresters
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= Total income of income
- loss carried forward or loss carry back
- special expenses
- extraordinary expenses
= income
- various tax allowance
= taxable income
10.2.3. Loss consideration
In principle losses are fiscally recognized. The loss compensation primarily
takes place within the same type of income, secondly with positive income of
other types of income. That’s why for example a loss of commercial activity
can be charged with positive income from renting and leasing. The not
considered losses can be carried back up to 511.500 € into the previous
assessment period. Higher losses can be performed. Losses up to a million
Euro are unlimited compensated. Higher amounts can be reckoned up to 60
per cent within the loss carried forward. Non-compensated losses have to be
performed for an unlimited period of time within the next years.
10.2.4. Income Tax Rate
Is the taxable income underlying the basic tax allowance no taxes has to be
paid. Depending on the income the tax rate is progressively increasing
within the progression zone. If the undermentioned income limits are
exceeded, the income tax rate will not be increase and the tax rate is going
to be proportional.
Most recently the income tax rate and tax allowance had been changed
within the Konjunkturpaket II enacted on 5th march 2009. They are now at:
2009
2010
2011/2012
Tax Allowance
7834 Euro
8004 Euro
8004 Euro
Tax Rate
14 %
14 %
14 %
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Top Tax Rate
42% (45 % *)
42% (45 % *)
42 % (45 %*)
Application Of
52.552 Euro
52.882 Euro
52882 Euro
* Note: For taxpayers, whose income is at least 250.730 Euro (2009:
250.400 Euro, since 2010: 250.730 Euro) for single persons and 501.460
Euro (2009: 500.800 Euro, since 2010: 501.460 Euro) for married persons,
there is a three percentage higher top tax rate of 45 per cent since 1st
January 2008. Even the heretofore expected profit income of the business,
freelance work or agriculture and forestry of the so-called „tax for the
wealthy“ is underlying this tax.
10.2.5. Retained Profits
Since 1st january 2008 a possibility of retained profits exists for companies.
So accumulated profits, that means retained earnings of reporting
enterprises are taxed with a tax rate of 28,25 per cent (plus solidarity tax).
Furthermore the simultaneously accumulating trade tax is going to be
charged. But there is a hook in the case of subsequent removal of retained
profits: a subsequent taxation is going to be made analog to the taxation of
dividends at capital companies. The subsequent taxation rate is 25 per cent.
Compared to the “standard tax treatment” a higher tax burden can be
submitted with the subsequent removal. That’s why the use of the retained
profits should be carefully examined.
10.2.6. Disposition/Prepayment
Following the end of the calender or financial year the taxpayer is assessed
for income tax. This method consists of two parts. Firstly, the preliminary
proceeding, where the tax base is going to be determined (income, special
editions etc.) and secondly, the assessment procedure, where the tax
liability is going to be set and announced per tax bill. Basically the income
tax is taken by disposition; the wage tax and the dividend tax, which are
special forms of the income tax, are taken by tax deduction. During the
assessment period the taxpayer has to pay advance payments in the amount
of the estimated owed income tax. The tax office determines advance
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payments by advance tax payment notice. The advance payments are
calculated according to the income tax, which has been set with the last
disposition. The first advance payments in the year of the business start-up
are set according to the data of the Betriebseröffnungsbogen. The advance
income tax payments are payable quarterly, on 10 March, 10 June, 10
September and 10 December.
As a taxpayer you have to file a return until 31 May of the following year
when the assessment period is expired. The tax declaration has to be
personally signed. If you have a tax consultant this period is extended until
30 September, in exceptional cases even longer. At the double-entry
bookkeeping a copy of the balance sheet as well as a copy of the profit and
loss account has to come within the tax declaration.
10.2.7. Wage Tax
The wage tax is a special form of the income tax. She is calculated by a
deduction from wages. Debtor of the wage tax is the employee.
If you employ workers, you are required to retain the wage tax with every
wage payment and discharge it to the tax office. This has to be done at least
10 days after the wage tax application period is expired. The applications
should generally be communicated by electronic means. In hardship cases
(for example when there is no computer with internet access) a transmission
of hard copies can be applied in written form and allowed by the tax office.
Since 2011 there are no longer wage tax cards, because it should be
switched to electronic wage withholding procedures (ELSTERLohn II). In the
meantime this project is postponed to 2013 because of technical difficulties.
Nevertheless the wage tax cards in 2010 have been the last in paper form.
Everyone who needs a new wage tax card in 2011 or 2012 is getting a
replacement certificate.
The application period of the wage tax is usually the calender month. At
relatively small amounts the application period of the wage tax could be the
calender quarter or the calender year.
In addition to the wage tax the solidarity tax and the church tax have to be
withheld and discharge for the employee. The latter should obviously only
occur, if the employe is a church member, where the church is raising a tax.
Assessment basis is the retained wage tax of the employe.
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Particularities apply for short-term and slightly employment contracts.
For more information, see our IHK-Information for minijobs and short-term
employment, which you can request by the laterally link list.
10.2.8. Corporate Tax
The corporate tax applies to all corporations and extends to all of their
income. She starts with the conclusion of the articles of association (see 1.3
organization cost), but not before the outwardly business activity. The tax
rate is 25 per cent until 31 December 2007. With the corporate tax reform of
1 Januar 2008 it has been reduced to 15 per cent. Investigation period is
usually the calendar year; a varying financial year is also possible. The
advance notification of the corporate tax has to be done at the same date of
the advance notification of the income tax. A tax return has to be filed when
the assessment period is expired.
The determination of the taxable profit is made by the business assets follow
the rules of the ITA and the Corporation Taxes Act (CTA).
10.2.9. Profit Distribution
Profit distributions of the corporation to the partners are once again subject
to the taxation of income as income from capital assets. Since 1 January
2009 innovations resulted in the so-called Flat Rate Tax (before is the socalled half-income system). Distributions from units, which had been held in
private assets of the partner, are regularly imposed by a Flat Rate Tax of 25
per cent (with a assessment option at a lower personal tax rate). If the units
had been held in the operating assets (for example a Ltd.), a taxation is
going to be make according to the partial income system. This implies, that
60 per cent of the distribution is included in the assessment basis of the
taxation and that 40 per cent is exempted from the tax.
If the shareholder is a corporation, for example a Ltd., 95 per cent of the
dividends are exempted from the tax due to the establishing multiple
taxation.
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10.2.10. Salary for managing directors
One of the most common form of corporation is the Limited Company (Ltd.).
As an institution it needs director. Whose salary is wage taxable and at the
same time it is business expense of the Ltd. Problems could occur, if the
partners-director gets a salary which is not corresponding to the market
conditions. Then there might be a hidden profit distribution with the effect
that the salary is not recognised as business expense and it might be add to
the profit. Thus there are three levels on which a Ltd. has to pay taxes: the
Ltd. itself has to pay corporate tax on the profit, the partners have to pay
flat rate taxes on the dividend payout in private assets and the director
wage taxes.
10.2.11 Trade Tax
The trade tax is liable to every domestic business enterprise. Members of
liberal professions do not have to pay the trade tax. The person liable to pay
the tax is the sole trader, who is responsible for the business enterprise; at
business partnerships and corporation the company is the person liable to
pay the tax. The community imposes the trade trax; it is their source of
financing.
10.2.12. Operation Profits
The operation profit is the assessment base for the tax calculation. Basis of
the operation profits is the determined profit by ITA and the Corporation Tax
Act. It is corrected by several additions and cutbacks. Especially in the field
of additions, essential modification had been resulted within the Corporate
Tax Reform in 2008. Accordingly 25 per cent of interest payments as well as
interest portion, which is contained in rents, rentals and leasing charges as
well as licenses, have to be added. Thereby the particular interest portion is
determined on a flat-rate basis by the law and it is
 20 per cent for rents, rentals and leasing charges of mobile economic
goods,
 50 per cent for rents, rentals and leasing charges of commodities
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 and 25 per cent for licences.
10.2.13. Calculation of trade tax
Operation profits has to be rounded down to full 100 €; for individual
enterprises and partnerships it has to be reduced by 24.500€, but not more
than the rounded operation profits. At corporations there is no such tax
allowance. Next the operation profit is multiplied by the tax base. Since 1
January 2008 it is about 3,5 per cent for individual enterprises, partnerships
and corporations.
Example:
Operation profits of a general partnership: 50.357 Euro
Rounded down: 50.300 Euro
Minus tax allowance: 24.500 Euro
Corrected operation profits: 25.800 Euro
thereof
25.800 Euro x 3,5 per cent
tax base: 903 Euro
The tax base is multiplied by the assessment rate of the particular
community, in which the business is based.
trade tax liabilities:
903 Euro x 420 per cent (Stuttgart) = 3792,60 Euro.
10.2.14. Charges to the profits tax
A compounded charge of the income tax is made at partnerships and
individual enterprises, and omitted to the percentage of business income.
Charges is made in the amount of 3,8-gang version of the base amount of
trade tax. As a result the tax effect of the trade tax at municipality with
rates of assessment up to 400 is neutralising itself, as far as there is
sufficient income tax for charges. In cases when the trade tax liability is
higher than the income tax due to the business taxable addition, the
overcompensation does not take place within charges.
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10.2.15. Advance payments
The taxpayer has to discharge advance payments on 15 February, 15 May,
15 August and 15 November to the community, where the business is
based; at the end of the enquiry period (normally the calendar year) he/she
has to deliver the return of tax to the responsible tax office. The advance
payments are going to be cleared with the tax liability.
You can finde detailed information about the trade tax in our IHKInformation “Property tax atlas – Information about real estate and trade
tax”, which you can request by the laterally link list.
10.2.13. Sales tax
The sales tax is imposed on sales, which a business is achieving at home.
Primarily it means sales from delivery of goods or others services such as
services. Entrepreneur is anybody who is independently responsible for a
business and professional activity. Since 1 January 2007 the tax rate is 19
per cent, for certain sales only 7 per cent. The reduced tax rate applies to
books and magazines, for many foods and also for the production of
transport performances in public transport.
10.2.14. Tax exemptions
Certain sales are exempted from the sales tax. The most notable example
are export delivieries und intra-community supply.
10.2.15. Turnover tax advance return/Input tax deduction
Usually you receive preliminary work from other companies, which you need
to create your own services. The sales tax is charged by the upstream
supplier. You can charge this amount, the so-called input tax, against the
sales tax, which you have to pay to the tax office, if you sell goods or other
services. As the sales tax liability is starting with the entrepreneurial activity,
the input taxes, which come up by acquisitions within the business start-up,
can be assert by the tax office. For the establishment of a GmbH applies,
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that the company prior to registration and the GmbH is taxable considered
as a subject.
Example:
During the appointment period you deal 10.000 Euro worth of merchandise
purchase plus 1.900 Euro input tax and 20.000 Euro worth of sale of goods
plus 3.800 Euro sales tax. You have to pay 1.900 Euro (3.800 Euro - 1.900
Euro) to the tax office as a sales tax prepayment.
During the first two years you – as an entrepreneur – are obliged to the
turnover tax monthly repayment notice. Otherwise the prepayment period is
the calendar quarter, unless the tax of the previous calendar year is more
than 7.500 Euro. In this case you have to make monthly applications after
the first two founding years. With a sales tax payable of the previous year of
less than 1000 Euro the tax office could free the entrepreneur from his/her
notification obligation and prepayment. The entrepreneur has to deliver the
turnover tax advance return by the 10th day following the end of each
appointment period to the tax office; at the same time he/she has to
discharge his/her calculated sales tax burden. If it comes up to an input tax
surplus, because the paied input tax exceeds the received sales tax, the tax
office is refunding this surplus. It should, however, be borne in mind that the
tax office could hinge the refund on a deposit of a security, for example a
bank guarantee. The applications should generally be communicated by
electronic means.
In hardship cases (for example when there is no computer with internet
access) a transmission of hard copies can be applied in written form and
allowed by the tax office. Entrepreneurs, who deliver a monthly application,
are able to submit a time extension notification until 10 February.
Preregistrations and advance payments are due a month later. The
extension is conditional on the registration of a special advance payment
amounting to an eleventh of the sum of the advance payment of the
previous year; this special advance payment has to be performed until 10
February (§ 47 Abs. 1 UStDV). This special advance payment is credited to
the due advance payment on 10 February of the following year.
Usually the tax is calculated according to the agreed fees (imputed
taxation). It does not matter whether the customer has paid or not. The
sales tax arises by performing the service. Departing therefrom an actual
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taxation can be made on request. In this case, the uniform remittance of the
sales tax is based on the collected, thus the accruing fees. The only
requirement is that you meet certain conditions. This is that the sales of the
previous year or the founding year do not exceed 500.000 Euro.
Entrepreneurs, who are exempt from bookkeeping duties because of
easement provision could similarly apply for the acutal taxation; as well as
freelancers.
10.2.16. Sales tax declaration
At the end of the calendar year the entrepreneur has to submit a personally
signed sales tax declaration, in which he/she has calculated the sales tax
burden or the surplus of the whole calendar year.
10.2.17. Issue of invoice
An entrepreneur, who is negotiate sales taxable income is obliged to make
out invoices, at least at sales with companies. In accounting private persons
this obligation only exists when a delivery or service is deducted in
connection with a property. A bill is particularly relevant for the
(entrepreneurial) beneficiary because he/she can only deduct the shown tax
when a correct bill is present. The bill must include the following:

complete name and address of the providing company

complete name and address of the beneficiary

date of issue

continuously invoice number

value added tax or in the absence a tax office tax number

quantity and commercial designation of the object or design and size
other services

time of delivery or other services

fee

the amount of tax, which is omitted of the fee and which has to be
shown separately or a reference to the tax exemption

reductions in the renumeration which had been preliminarily agreed,
e.g discount, bonus, rebates
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fees according to tax rates and exemptions.

A simplification rule exists for invoices whose full amount does not exceed
150 Euro. It is enough to furnish the following particulars in the invoice for
the input tax deduction:

complete name and address of the providing company

date of issue

quantity and commercial designation of the object or design and size
other services das Entgelt und den Steuerbetrag in einer Summe

the tax rate

in case of a tax exemption an indication of the existance of a tax
exemption is necessary.
For more information on billing, see the IHK-information „Required
information on invoices“, which you can request by the laterally link list.
10.2.17. Regulations for small businessman
At companies whose sales does not exceed 17.500 Euro including the added
sales tax within the founding year, a sales tax is not prescribed by law. This
means you do not have to pay it to the tax office. The same shall apply to
the years after founding the company, if the following double condition is
met: The sales of the previous year did not exceed 17.500 Euro; it is not
expected to exceed 50.000 Euro in the current year. Therefore we
recommend referring on regulations for small businessman, so that the
invoice recipient knows, why there is no sales tax shown. This can be done
by the following addition:
"No tax statement due to the application of regulations for small
businessman (§ 19 UStG)"
What must be considered, however, is that entrepreneurs, who make use of
the regulations for small businessman, can not claim the input tax. In turn
this can be detrimental; for example if large investments are made within
the initital operating phase. That’s why you can dispense with the application
of the regulations for small businessman by a declaration to the tax office
with the effect that an input tax deduction is possible. Such waiver should be
considered thoroughly, as it is binding for five years.
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10.2.18. Choice of legal form and taxes
The legal form of your company has an impact on the tax burden. That’s
why you should consider this aspect when founding your company. However,
this is not the only determining factor for the choice of a legal from. Also
liablity, legal form expenditures, disclosure obligations and possibilities to
raise capital are playing a decisive role. The following chart gives an
overview of some important aspects within the choice of legal forms:
Individual enterprise/
partnership
profit tax

income tax

progressive schedule
(course see above)

tax allowance

tax base:
3,5 per cent

tax allowance 24.500
Euro
trade tax

charges on
Corporation

corporation tax

unifrom tax rate: 15 %

no tax allowance

tax base:
3,5 per cent

no tax allowance

no charges on
corporation tax
corporation tax
loss
account

types of income for

wages of income,
pension provisions
and loan interests
(business to
business) are not
no compensation for
losses of the company
the company

determina
tion of
income
possible with other

wages of income,
pension provisions and
loan interests (limit: §
8a KStG) are business
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deductible as a
expense
business expense


double-entry
duty to double-entry
bookkeeping
bookkeeping or cash
basis accounting
The Information had been prepared with demanded diligence, for the
completeness and accurancy of the content, however, no guarantee can be
given.
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11. Regulatory / environmental issues
11.1. Food control administration
The retail sector is affected the same way by the food control administration
or the food regulatory as the gastronomy. But there is no definition of this
control or a checklist you could use. Consequently a counseling interview
with the food control administration is necessary. Besides the first session
there is another appointment needed for the inspection of the equipped
facility. These dates should be kept to prevent further complications. A
secondary aspect is that these regulatories differ in each state.
With the control of the food hygiene there is no department in the first
place. First there comes the common sense: Is the cold chain on the way to
the customer interrupted? Are there risk points for the increase of bacteria?
Where could pollution arise? All the way to customer the vendor is
responsible for the products. Important to this is a self-created checklist to
avert the danger (eg through control of thermometers, etc.).
The concept of HACCP is a preventing system that ought to ensure the
safety for food and consumer. It is important to deal with this concept.
The HACCP-concept requires:
 All the risksfor the safety of food in the
sphere of responsibility of an enterprise need
to be analysed.
 Points of control need to be analysed which
are relevant relevant for the food safety.
 Critical limits for each critical control point or
control device need to be established.
 Procedures for monitoring of the control
points need to be established.
 Corrective actions need to be established.
 It is important to ensure that the procedures
established by the shop owner are working
as intended.
 Record keeping procedures have to be
established.
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11.2. Waste Acts
Federal government, state governments, and local authorities have waste
acts that are built on each other. They have regulations and statues which
build the frame for your in-house waste management.
In summary, the following applies:
 Waste need to be avoided, exploited or to be
given to current, sorted disposal.
 Waste for elimination and waste for
exploitation must be declared and preset
ways in waste management must be kept.
The disposal of so called waste with special
need of dedication and observation has to be
verified. Exception: small amounts of special
waste within 2000 kg per Year do not have
to be observed until the handover.
 All packinging of transport, sell or outer packaging including special
waste need to be disposed out of the public waste disposal.
 Check the Chemicals Act because it might have relevance for your
business!
11.3. Packaging
Transport packaging must be disposed out of the public waste disposal. It is
the duty of the producer or the deliverer to take back this packaging.
Transport packaging that is taken by the customer becomes sales packaging.
11.4. Your Duties
There are three ways to dispose your transport packaging:
 Return to the deliverer:
If you insist the deliverer is in charge to take the transport packaging
back. According to the judgment of the Bavarian Supreme Court, the
supplier must revoke the transport packaging at his own cost if the
product is directly unpacked in the supply and delivered regularly.
 Disposal by the store itself:
The trade takes recovery and after consultation relays the cost to the
supplier. Check that the industry rate contracts offered cover the
actual cost of disposal.
 Industry Solutions:
For plumbing, furniture, construction and electrical industry there are
so-called industry-specific solutions. The manufacturers and importers
to pay to the relevant waste management associations (eg Interseroh
Resy, VFW, etc.) for a fee, with the disposal will be funded. The trade
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has only the costs of sorting and, where appropriate, to carry the
container rental.
 Packaging
The store is required to allow the free abandonment of packaging in
the store or in their vicinity.
 The collection container must be placed clearly visible and easily
accessible. The Customer has to be explicit informed about this
possibility. The overpacks are given for recycling.
11.5. Checklist avoid waste
11.5.1. Packaging
 Packaging are often unnecessary. Involve your sales items without
unnecessary packaging.
 Waiver of shrink films for carton goods.
 Use reusable systems in the transportation sector.
 Campaign displays only on returnable pallets.
 Replace foils by metal bands or in smaller units with paper wrappers.
 Make sure that the moldings or fillers which are used for secure
transport, can be reused by the supplier.
 Use existing boxes from
delivery of goods for
returns, store supplies
and goods deliveries to
customers.
11.5.2. Office
 Copy both sides.
 Use faulty copies as
scratch paper.
 Re-use refillable toner
cartridges.
 Ban disposable products, such as disposable pens.
 Watch for capacity to expand and their compatibility when buying the
computer equipment.
 Use recycled paper.
 Do without solvent-based office supplies such as correction fluid, glue,
felt tip pens.
 Use PVC-free sheet protectors.
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11.5.3. Range of goods
 Serve drinks in returnable bottles as possible.
 Sell fruit and vegetable packing free.
 Take advantage of the sale of meat, meat and dairy products, the
ability to deliver goods in bulk containers brought. In Bavaria it is valid
that brought vessels may also be used behind the counter.
 Provide more refills of poor packaging.
 Make sure that your products are easy to repair and thus offer a longer
useful life.
 When selecting the products watch for the "Blue Angel".
 Replace difficult to utilize materials such as PVC or composite
packaging.
 Prefer products made from recycled paper.
 Avoid products containing hazardous substances such as wood
preservatives, stain removers, aerosol sprays and disinfectants.
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12. Safety / security
12.1. Store Security
Small merchandise, office equipment, and cash attract more than paying
customers. A well-lit store can be a deterrent to burglars and shoplifters.
Store owners attempt to reduce costly shrinkage by adding mirrors, burglar
alarms, and closed-circuit monitors for security. “Nevertheless, a large
amount should be stored in a safe. Besides, shop owners should avoid
employing one person in the shop during opening hours.” [OGUM – 2004]
Costs for security systems vary widely; however, some security firms
specialize in grocery and retail security.
12.2. Insurance
Proper insurance only helps manage risk, but no business can completely
eliminate it. It is important to know what kind of insurance
and how much to carry. Factors to consider are probability
of loss, resources available to meet the loss, and size of
potential loss. Considering the size and frequency of loss
to the store will help determine if insurance is required or
if the loss should be considered part of normal business.
Bad-debt losses and shoplifting are two examples. The
store’s financing source may have insurance guidelines or
special requirements. Types of coverage commonly considered:
 Fire and general property insurance—covering fire losses, vandalism,
hail, and wind damage
 Plate-glass insurance—covering window damage
 Consequential—loss insurance covering loss of earnings or extra
expenses when business is suspended due to fire or other catastrophe
 Burglary insurance—covering forced entry and theft of merchandise
and cash
 Fidelity bonding—covering theft by an employee
 Fraud insurance—covering counterfeit money, bad checks, and larceny
 Public-liability insurance—covering injury to the pubic such as
customer or pedestrian falling on the property
 Product-liability insurance—covering injury to customers arising from
the use of goods purchased through the business
 Worker’s compensation insurance—covering injury to employees at
work
 Life insurance—covering the life of the owner(s) or key employee(s)
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 Business-interruption insurance
 Malpractice insurance—covering owner against claims from customers
who suffer damages as a result of services performed
 Errors and omissions insurance—covering the store against claims
from customers who suffer injury or loss because of errors made, or
things that should have been done but failed to be done.
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REFERENCES
[HEN – 1998]
[IHK – 2012]
[OGUM – 2004]
[SCH – 2010]
[DUN]
Henning, Katherine J.: Grocery/Convenience Store
Start-Up Profile. Springfield: Illinois Department of
Commerce and Community Affairs 1998. (Source:
http://www.illinoisbiz.biz/nr/rdonlyres/8D0B90B6C149-437C-9C16131E0D62CB9E/0/GroceryConvenience
Store.pdf)
Industrie- und Handelskammer zu Berlin:
Einzelhandel. (Source: http://www.ihkberlin.de/linkableblob/
819182/.19/data/Existenzgruendung_im_Einzelhandeldata.pdf)
Otto-von-Guericke-UniversitätMagdeburg(Hrsg.)/Rodewald, Carla (IAF)/Denecke,
Sandra (IAF): Erfolgreich und gesund handeln. (Source:
http://www.gussnet.de/fileadmin/media/Projektwebsites/GussNet/Dokumente/service/downloads/Infos_spezielle_bran
chen/GUSS_Broschuere_Einzelhandel.pdf)
Schwerd, Udo: Existenzgründung Phase 3:
Businessplan (Source:
http://www.iyotta.de/index.php/checklisten/existenzgru
endung/549-businessplan.html)
"Dundas Street East" by Diego Torres Silvestre,
http://piqs.de/fotos/166377.html, CC-Lizenz (BY 2.0)
http://creativecommons.org/licenses/by/2.0/de/deed.de
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Appendices
Appendix A: Business Plan Checklist by [HEN – 1998]
Title Page
 List name of business and name of owner(s), business address,
telephone and fax numbers.
 Show date business plan was originally prepared and any revision
dates to identify most current version.
Plan Summary (develop last; place first)
 Identify the business as a new venture or expansion of current
business. If existing business, summarize history.
 Identify your products and/or services.
 Summarize financial needs: state amount of loan requested, expected
interest rate and length of loan, for what purpose(s) you will use the
requested funds (e.g., real estate, equipment, inventory, working
capital, etc.), and how loan will be repaid (usually from cash flow and
retained earnings of business).
Management
 Indicate legal structure of business organization.
 Identify owners, officers, and other key personnel. List addresses,
phone numbers, and percent of business ownership.
 Describe responsibilities for all key personnel and emphasize
management expertise.
 Identify management consultant team: attorney, accountant or tax
preparer, insurance advisor, other.
Marketing Plan
 Describe industry history and trends. How might current trends affect
your business?
 Identify number and kinds of firms in your industry.
 Show a basic understanding of the importance of appropriate target
marketing. Describe your target market(s) and what criteria you used
to select them.
 Describe your geographic market area and projected market share.
Competitive Analysis
 Identify your competitors and explain how you investigated them.
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 Estimate competitors’ market share and financial resources.
 Consider your competitors’ strengths and weaknesses compared to
those of your company as you discuss the following four categories:
 Product/Service
 Describe your product and/or service line(s).
 What makes your product or service beneficial to the
potential customer? Compare to competitors.
 Analyze your product/service life cycle and identify current
stage.
 Discuss intellectual property rights (patents, copyrights,
trademarks) or other legal or technical protection for your
products/services.
 Discuss plans for expansion of product lines or for new
product development. Place (Location/Distribution)
 Analyze pros/cons of business location and physical
features of the building relative to your competitors.
 Indicate that you have investigated local zoning laws.
 Describe facility location and general demographics of the
neighborhood, city, or target market area.
 Is site owned or leased (state terms of lease)?
 Comment on location costs (rent, property taxes, utilities,
maintenance).
 Explain any planned capital or leaseholder improvements
or expansion.
 Explain how you will get your products and/or services to
the customer. Show consideration of any alternative
distribution systems.
 Pricing
 Describe pricing for each product/service.
 Explain your sales terms and discounts.
 Discuss your pricing policies and constraints — compare
with competitors’ pricing strategies.
 Promotion
 Identify your public relations and advertising strategies.
Discuss which types of media (print, radio, television,
direct mail, trade shows, etc.) you will use to promote your
business and why.
 Establish an advertising budget.
Operations
 State hours of operation. Note any seasonal variations in sales or
hours of operations.
 Identify special equipment or materials needed to produce your
products or deliver your services. Explain plans for equipment
acquisition, lease, and/or schedule of replacement. List approximate
costs and methods of financing.
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 Describe production planning, methods, and specific procedures you
will apply to maintain efficiency and technical competitive edge.
Identify how physical store or plant layout supports this system.
 Identify key suppliers, usual terms and conditions of delivery and
payment, and projected dollar value of purchases per year.
 Discuss importance of establishing and maintaining a positive
purchasing/vendor relationship.
 Describe your recordkeeping system. Identify who will prepare
financial statements and tax returns (owner, employee, or accountant
/ bookkeeper).
 Explain your inventory management and control practices.
 Explain your credit and accounts receivable policies.
Human Resource Management
 Identify the key functions or departments in your business.
 Describe staffing plan, number of employees,and key personnel.
Prepare organization chart if structure warrants.
 Identify which functions will be subcontracted and which will be
handled by employees. Indicate who will prepare payroll and complete
required reports (owner, employee, or accountant/ bookkeeper).
 Discuss recruitment strategies and hiring time frame.
 Specify proposed salary schedule.
 Discuss commission structure (if applicable).
 Outline employee benefits program.
 Discuss employee training (initial and continuing).
 Discuss employee evaluation and termination policies.
 Demonstrate understanding of and compliance with government
agencies which regulate human resource management practices.
 Identify unions which may be affiliated with your business and how
they may affect your operation.
Quality Control/Customer Service
 Discuss your specific quality control standards and monitoring
procedures for each product/ service.
 Identify how you plan to overcome potential quality problems with raw
materials or purchases.
 What policies and procedures will you employ to avoid lawsuits?
 Describe warranty/servicing and return policies for your products or
services.
 Indicate your intent to inform all employees about your quality control
and customer service policies.
Regulatory/Environmental Issues
 Identify any federal, state, or local agencies or industry programs that
could regulate or impact your business.
 Consider potential environmental impact.
 If your business creates a waste stream, describe how you will handle
it.
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Financial Data (minimum requirements)
 If currently in business, submit historical data for last three years or
since inception—include income tax returns, income statement,
balance sheet, monthly cash flows. Be prepared to furnish aging of
accounts receivable/payable.
 Determine initial startup or expansion costs.
 Prepare minimum of three years’ cash flow projections (first two years
by month, third year annualized). Show sales seasonality (variations in
income and expenses) if applicable to your business.
 Document sources and uses of new funds.
 Prepare personal financial statements for all owners/guarantors.
Appendices/Exhibits
This section should document any items that are not or cannot be addressed
in the narrative, such as:








résumés of owners, officers, and other key personnel
pictures of unique products
pictures of location exterior/interior
copy of lease agreement
copy of distribution or franchise agreement
copies of patents and other intellectual property protection
copies of contracts for the purchase of your product/service
copies of operating licenses or permits.
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Appendix B: Useful addresses
In the following part you find adresses that could be interesting for your
recherches in regulatories and market evaluation.
IHK Newsletter Handel und IHK Publikationen
Der Newsletter erscheint monatlich und enthält interessante Informationen
für den Handel, wie z.B. Gesetzesänderungen, Marktbetrachtungen,
statistische Erhebungen oder Hinweise auf branchen-spezifische
Veranstaltungen und Workshops. Abo unter www.ihk-berlin.de/Newsletter.
Sämtliche Publikationen der IHK Berlin finden Sie in unserem Online-Shop
unter www.ihk-berlin.de/shop.
Branchenbriefe der Berliner Volksbank
Übersicht aller vorhandenen Branchenbriefe finden Sie im Internet unter
www.berliner-volksbank.de
Die Geschäftsidee
Verlag für die Deutsche Wirtschaft AG
Theodor-Heuss-Str. 2-4, 53177 Bonn
Tel: 0228/ 8205-0, Internet: www.geschaeftsidee.de
Hauptverband des Deutschen Einzelhandels (HDE)
Am Weidendamm 1 A, 10117 Berlin
Tel.: 030/ 726250-0, Internet: www.einzelhandel.de
Handelsverband Berlin – Brandenburg e.V. (HBB)
Mehringdamm 48, 10961 Berlin
Tel: 030/ 8817738, Internet: www.hbb-ev.de
FfH – Institut für Markt- und Wirtschaftsforschung GmbH
(vormals Forschungsstelle für den Handel)
Am Weidendamm 1 A, 10117 Berlin
Tel: 030/ 590099-610
IfH – Institut für Handelsforschung an der Universität zu Köln
Dürener Straße 401 b, 50858 Köln
Tel: 0221/ 943607-0, Internet: www.ifhkoeln.de
Handelsverband BAG
Bundesarbeitsgemeinschaft der Mittel- u. Großbetriebe des
Einzelhandels e.V.
Friedrichstraße 60 (Atrium), 10117 Berlin
Tel: 030/ 206120-0, Internet: www.bag.de
BBE Handelsberatung GmbH
von – Esmarch - Straße 168, 48149 Münster
Tel: 0251/ 87119-0, Internet: www.bbe-muenster.de
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BGHW Berufsgenossenschaft Handel und Warendistribution
68145 Mannheim
Tel: 0621/ 1830, Internet. www.bge.de
Bildungszentrum des Einzelhandels Niedersachsen
Kurzer Ging 47, 31832 Springe
Tel. 05041/ 7880, Internet: www.bze-springe.de
Zentralstelle für Berufsbildung im Einzelhandel e.V.
Geschäftsstelle Berlin:
Mehringdamm 48, 10961 Berlin
Tel.: 030/ 780977-3, Internet: www.zbb.de
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