Opening a kiosk: Tips for starting your own business

Kiosks, that serve as a corner shop and watering hole, are an established part of the retail scene in Germany. The focus here is on social interaction with people in the neighbourhood. Is this kind of work you think you'd enjoy? If you've always imagined setting up your own business and being your own boss, maybe opening a kiosk could be an option for you too. But before you get started, you first need to inform yourself about business plans, concepts and insurance cover. Because these are important considerations when setting up as an independent retailer as well.

The effort you put in at the planning stage can really pay off. Kiosks are popular and oft frequented places in Germany. As such, they represent a reliable source of income too. An aspect that hasn't escaped the attention of the retail industry or the self-employed in recent years either. In addition to chains and franchise kiosks, there are also sole, private and independent operators. Regardless of the business model you decide on, there are a few things you have to consider when opening a kiosk.

The current situation is far from ideal for starting a new business. But even now, kiosks still fulfil an important role as places where people can meet and socialise – while maintaining an appropriate distance, of course. So, opening a kiosk is still a good decision. The long-term outlook continues to be positive. And we'd be happy to support you with your project. 


What kind of kiosk do you want to open?

Not only does a kiosk go by many names, there are different concepts too. So, you need to first consider what kind of kiosk you want to open.

  • Are you the convenient neighbourhood store where people can get their evening meal after work?
  • Do you want to serve your customers things like coffee, snacks and newspapers when they're on their break?
  • Or is your goal to become the favourite neighbourhood meeting place? A place that brings together the generations, but also sells coffee, cake and other goodies?

Once you've answered these questions for yourself, the next steps are much easier to tackle.


Just dive right in? Not without ticking the following boxes

You don't need any special training or particular qualifications or permits to open a kiosk. In fact, you only need a Gewerbeschein (business license), which you can get from the Gewerbeamt (Trade Office). After registering, the tax office will get in touch with you. They will want to know

  • how are you going to earn your money in future,
  • which legal structure you are trading under – Einzelunternehmen (sole trader), GbR (unincorporated civil law association), GmbH (limited company), UG (entrepreneurial company)
  • and how high is your income likely to be.

The tax office needs this information in order to determine what taxation level your enterprise will be subject to. You will have to fill out a "Fragebogen zur steuerlichen Erfassung" (tax registration form) for this. You will then receive a tax identification number that you have to use on all your invoices and receipts from then on.

Will you be offering food in your kiosk that you've prepared yourself? If so, you will need a health certificate in addition to a business license and tax number. Your local health authority will explain the general regulations governing hygiene in food outlets.

Another must-have as a kiosk operator: membership of your local Chamber of Commerce and Industry (IHK). This cannot be avoided, as the IHK will be informed about your status as a self-employed worker and your business registration.


Opening a kiosk: These are the skills and abilities you need to be self-employed

Business knowledge or basic experience working in the retail industry are useful, but not essential. What you must do as a kiosk operator is keep an eye on your incomings and outgoings. You should also strive to always have some cash on hand – it's never bad to have something set aside for tough times. You also need to keep on top of the bookkeeping and pay your taxes regularly. You will most likely avoid teething troubles if you inform yourself properly at the planning stage. By doing so, you will acquire a basic understanding of business too. The rest you will learn on the job.

Other skills you need as a kiosk operator concern contact with people. Interacting with others on a daily basis shouldn't be a burden on you, it should be fun. Being physically fit won't hurt either - after all, you'll be working long hours. In addition to your regular opening hours, you'll also spend time purchasing goods, settling bills, doing tax returns, meeting suppliers and perhaps showing your own employees the ropes.


Tax: These are the taxes you have to pay as a self-employed person

It depends entirely on what legal structure you decided on when registering your business. If you want to open a kiosk, it might be sensible to set up a sole proprietorship or a partnership such as a GbR. With these legal structures, you have to pay tax on your earnings – so-called income tax. When you do your tax return, it's enough to submit a simple profit and loss statement to the Tax Office.

Then there is also the Gewerbesteuer (business tax) which is payable on a regular basis. The amount is set and collected by the city or local community. You pay this tax on profits in excess of 24,500 euros.

As a corporation – limited liability UG or GmbH – you pay 16 percent Körperschaftssteuer (corporation tax) on your profits and you are subject to Gewerbesteuer (business tax). A withholding or capital gains tax is payable if you disburse your profits to a number of partners – currently set at around 26 percent.

In Germany, goods are subject to different rates of Umsatzsteuer (VAT) – either 19 or 7 percent.


Insurance cover: Protecting yourself as a kiosk owner

Without a certain degree of protection, it's likely that you would have to bear many costs yourself. This doesn't have to be the case. Business liability insurance protects you against losses caused by you, your employees or a third party.

Apart from that, it's up to you what insurance you want to take out. Consider what coverage might make sense for your kiosk, whether there are risks and how you would deal with such events yourself.


Business plan: No plan, no successful business and no financial backers

Yes, you need a business plan. A business plan will help you get to know your business from another angle. Even months or years later, you'll be able to recall details that you would never have dealt with, had there not been a business plan.

If you don't have sufficient capital of your own to open a kiosk, you will need this plan in order to persuade financial backers about your idea. You will only be able to secure financing with a business plan.

A business plan will specify what kind of goods you want to sell and at what prices, who your customers are, the location and the reasons for choosing this location, how you intend to differentiate yourself from the competition, how much you expect your profit, costs and turnover to be and how much money you require to realise your idea.


Concept: All the pieces fit together perfectly

You can't win over customers with low prices. Why not? Many of the goods that are sold in a kiosk are subject to price fixing. The solution: Make sure that you choose your product assortment to fit your location, customers and kiosk concept. But don't overdo it. Too wide a product range will overwhelm your customers plus you need sufficient space to store all your goods.

If you want to become a culinary hot spot in your neighbourhood, keep in mind that your kiosk will then be subject to the Gaststättengesetz (Licensing Act). You'll then have to meet various conditions and pay a lot of money for certain concessions. If you have a good business plan with a financial budget, you'll quickly discover whether the expense is really worth it in your case.


Location: Be where your walk-in customers are

The choice of location is crucial for success. You have to be where the majority of your customers are. Wherever they spend time, you have good chances of succeeding. Keep an eye out for hubs, like popular shopping streets and arcades or public transport stops like underground stations, bus stops etc.

Be aware that such locations can be expensive. Before you sign a contract, you should calculate all the costs and work out whether a higher rent will eventually pay off or not.

Try to strike a sensible balance between the ideal location and affordable rent. On closer inspection, some locations may turn out to be perfectly suitable after all.


Start capital: What you need it for and where you have to invest it

A large portion of your start capital will be spent on outfitting your kiosk and initially stocking it with products. You can save a little money by outfitting your kiosk functionally. You can get freezers and display racks from your suppliers if you use them to merchandise their products. Then you just need shelving for storage and a sales counter.

Bear in mind that these investments aren't the only things you need the capital for. You have to secure your liquidity as well, because your takings may not be that large at the beginning. With the help of your business plan, you know how much money you're investing in total and when the moment you start making a profit should arrive.

How much start capital you'll need depends on a number of factors, such as your rent and the goods you wish to sell. 30,000 euros is a good place to start your calculations – but this figure really represents the absolute minimum amount of start capital.


Three options for setting up your own business

You can open a kiosk in one of the following ways:

  1. Open a new kiosk from scratch. This approach offers you a lot of creative and decision-making freedom. To go this route, you need a lot of start-up capital and it carries a certain financial risk, however. It's also difficult to evaluate in advance whether your kiosk will be successful.
  2. Take over an existing kiosk. You already have a customer base – and a fully outfitted kiosk. Take your time in making the decision, though, and insist on seeing the previous operator's accounts. This is the only way to tell whether the kiosk has been doing well up to now or not.
  3. Open a franchise kiosk. The advantage: The concept, promotional activities and interior design are already predetermined. In return, however, you have to hand over a portion of your revenue to the franchise company. The financial risk is a bit lower here as well.


Upshot: In everything you do – always keep your customers in mind

With all the plans and concepts, you should never neglect your customers. After all, the success of your kiosk depends not only on whether you are aware of the needs and wishes of your potential customers, but whether you are actively engaged in fulfilling them every day. You can determine what they are and document them with the help of your business plan.

Don't forget to talk to your future customers as well, and ask them – perhaps in the context of a small street survey – what they would like to see and be able to buy in your kiosk. You can use this knowledge to update your business model, if needed, or tweak your business concept. And keep on asking them, because customer needs change and you should adapt to them accordingly.

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