Why Should I Be Part-Time Self-Employed, Rather Than Full-Time?
First things first: full-time self-employment is always worth considering – even if you know that the first months can be really tough and the risk factor feels enormous. It’s brave and it can be immensely rewarding – if you put in the work, are self-motivated, disciplined and diligent, you can really build that life and career path that you’ve always dreamed of.
However, if you are the type of person that prefers keeping the risk minimal, then part-time self-employment might be a better option. It’s a bit of a compromise: on one hand, you’ll still have your regular job to attend to (whether that’s part or full-time). That will take up significant time but it also pays your bills. On the other hand, you’ll be free to try out self-employment life and also earn extra cash this way. If you have few clients to begin with, it won’t hit you as hard because you’ll still have your regular gig covering your bases.
Part-Time Self-Employment as a Transition Phase
Being your own part-time boss can enable you to make a gentle transition to full-time self-employment. Consider it as a test phase in which you can figure out whether your business idea is sound or needs tweaking. It also enables you to slowly build a client base and evaluate whether or not you’d be able to do this full-time.
The figures from the German KfW Gründungsmonitor ( Source: ) highlight that around 50% of all people who end up founding a business in Germany will first try out their idea and choose part-time self-employment.
How Will Part-Time Self-Employment Affect My Regular Job?
The answer is simple: it shouldn’t affect it at all. There are, however, a few things you should pay attention to, to make sure you don’t get yourself into a pickle. As a rule of thumb, it’s only fair to inform your boss about your plans – depending on your contract, you may even be legally obliged to do so. You should assure him/her that it won’t interfere with your regular gig and, of course, misusing company time for your own personal pursuit is a strict no-no. That means clearly splitting your time is essential. Obviously, it should go without saying that poaching clients from your 9-5 can get you into a lot of trouble and is definitely not the recommended way to fast-track your career!
How to Properly Split Your Time
A word of caution: as long as you are an employee, this job should continue to be your priority, at least during the hours you’re obliged to work. As a general rule, in Germany you can work up to 18 hours per week in addition to your regular job. You should also be aware that you can’t hire someone, as consequently your part-time self-employment will immediately be classified as full-time self-employment.
Do I Have to Register My Part-Time Self-Employment?
Unfortunately, bureaucracy is something you can’t avoid, even if you’re only pursuing your boss-dream part-time. This means that you’ll have to register your business with either the trade office, the tax office, the trade association, the trade register or the IHK (chamber of industry and commerce), depending on what you do. The office where you need to register depends on the legal form you’ve chosen for your business.
What Legal Form Should I Choose?
If you are a freelancer (journalist, artist, academic etc.), you just need to register with the Finanzamt /tax office and obtain a tax ID number and you’re good to go. But there are also many different legal forms that you can choose for your business and many different factors which determine which one is right for you.
The IHK says: “If you start up your buspart-time-self-employmentiness alone, it will be a sole proprietorship from then on. A partnership constituted under civil law (GbR) or a general commercial partnership (OHG), if your enterprise requires a commercially organised business operation, is set up as a team effort. Since the legislation which applies to your business depends on its legal form, it stands to reason that the choice of legal form is of particular importance.”
For more details, check out their extensive PDF document here or, if your German is good/you have a German buddy to hand, this test by GO AHEAD can help you determine what’s right for you!