Private financial needs
A company is usually founded to generate income. Your private financial requirement is therefore an important element in your financial planning. You can only plan and assess whether your professional independence will secure your livelihood if you know your own personal requirements.
Ask yourself the following questions:
- What is my monthly private rent?
- How many contributions do I have to include for health and pension insurance or other insurance (e.g. professional liability)?
- What monthly living costs should I assume for myself and my family?
- Do I have to pay off any private loans?
- What reserves do I need for new purchases, holidays or education of the children?
- What is the minimum amount I have to earn to finance my current private expenses (rent, food, insurance, etc.) and possibly those of my family?
A simple list, e.g. with the financial planning assistance of your start-up workshop, will help you here. Write down all expenses incurred in your household in one month.
This includes first of all the regular costs such as rent, telephone, and health insurance. In a second step, you must divide the costs that are only due on certain dates (e.g. annual insurance premiums, loan interest and repayments for personal loans and income tax payments) by 12 and include them in the monthly statement. In a final step, add a buffer for unforeseen expenses (such repairs to your house, apartment, or car).
Then, write down any income from other sources that your household receives on a regular monthly basis. These include, for example, the income of your spouse, child benefit, and alimony. The difference between expenses and income results in the monthly required private withdrawal. After a manageable start-up phase (usually six to twelve months), your company should be able to finance your private living expenses.
We two founders need a private withdrawal of about EUR 1,800 for the cost of living. Due to our private fixed costs (rent, telephone, etc.), there is no further scope for reduction.