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Created on 25.07.2022

Founding a company: the complete guide – from the core idea to launching your own business

A good business idea leading to the launch of a company often fails because of a lack of courage to take the first step. The most frequent questions about setting up a company concern these initial steps. This complete guide aims to ensure you turn your idea into a successful business.

Many people flirt with the idea of setting up their own company. Managing your own time, making your own key strategic decisions and creating a meaningful role is an appealing prospect.

But career independence for a startup founder doesn’t mean having an easy life. After all, starting your own business involves overcoming many challenges and assuming a great deal of responsibility. Launching a startup means you’ll become an entrepreneur. You’ll receive no more warnings about hitting deadlines. You’ll be responsible for generating revenue, financial planning and your own salary. And you’ll have to deal with much more than just your own specialist field. On top of all that, you’ll have to ride out the highs and lows. There are certain personal attributes that are vital to running a successful startup:

  • Discipline: nobody will tell you what needs to be done and by what deadline. You’ll have to decide for yourself and make sure it happens.
  • Self-belief: you have to believe in your approach and must not be put off or deterred by throw-away comments. However, you should listen to feedback about your product or service.
  • Being inquisitive / open-minded: the challenges of starting a business are an adventure. An inquisitive and open-minded approach will stand you in good stead. These attributes will help you to learn quickly and adapt in an agile way.
  • Appetite for risk: you’ll decide to leave behind the security of employment to go it alone. But don’t worry, the risks are limited. However, you’ll still have to get used to the idea of facing situations where the future of the company – or part of it – may hang in the balance.
  • Optimism: don’t dwell on the worst-case scenario and try to look for solutions rather than problems.

In this guide we distinguish between three types of new business: startups, SMEs and sole proprietorships for freelance professionals. Although the three types of company all require similar attributes, the challenges faced differ greatly. That’s why they’re sub-divided into individual sections. Let’s get started.

How to found a startup

Step 1: Find out whether founding a startup is the right path for you

Founding a startup means working on an idea that’s never existed before. It’s a really exciting prospect as you’ll establish a purposeful and innovative entity for the future, create interesting jobs and hopefully enjoy strong growth. But it’ll also be tough going. Selling a product or service that’s so new that many people don’t initially understand it calls for tremendous patience and determination. Adrian Locher, the co-founder of DeinDeal and Merantix, also underlines the importance of not giving up: “The only thing that distinguishes a successful entrepreneur from less illustrious rivals is that they bounce back.” Another thing you need to know: startup founders have to either initially achieve a great deal with little capital, or raise a lot of capital and invest it in growth. It’s very unusual for startups to generate profits in the first few years, as growth takes precedence. This is a challenge that’s daunting and exciting in equal measure and means you’ll have to get by without or on a low salary for many months.

Step 2: Develop an idea and discuss it

A great concept for a startup that only exists in your mind remains just an idea. As soon as you start talking about it, you’ll develop the idea in line with market requirements and find enthusiastic people who can help you with contacts, expertise or capital. Harbouring fears that the idea will be stolen will generally hold you back. If an idea is that easy to copy, it’s probably not particularly innovative in the first place.

Step 3: Get your idea down on paper in a Business Model Canvas

If you haven’t heard about the Business Model Canvas, it’s a kind of business plan, but a very concise one. It’s perfect for startups as you don’t need to draw up a professional business blueprint with in-depth financial planning at this stage. This is because evidence that the idea will work often has to be provided first or it has to be developed in line with customer and market requirements. This means producing a highly detailed business plan is usually a waste of time. But if you use the Business Model Canvas, only the key elements of the business model are recorded:

  • Customer segments: what’s your customer segment? Are you operating in a niche or mass market?
  • Value propositions: what’s your value proposition? In other words, how do you make life easier or better for your customers?
  • Channels: how will you interact with your customers?
  • Customer relationships: how will you structure customer relationships?
  • Revenue streams: what’s your business model? Or to put it another way: how will you earn money?
  • Key resources: what infrastructure, how much capital and which capabilities are needed for your startup?
  • Key activities: which core activities are required to implement your business idea?
  • Key partnerships: which strategic partnerships are important for your startup?
  • Cost structure: what do you need to spend money on to implement your business idea?

If you need a pitch deck – that’s a brief presentation about your startup – for your investor search, then you’ll have all the information you need to create one to hand in the Business Model Canvas. A key point is to present your team during the pitch deck. The team is often more important than the business plan to potential investors who’d like to invest in your company at an early stage. But more about raising capital in the financing section.

Step 4: Simply get started

If you’re not sending invoices yet and are still in the process of implementing your business idea, then just go for it. Initially, you won’t need a commercial register entry nor generally any debt capital. It’s vitally important that you don’t work away on your idea in solitude in your basement, but instead regularly engage with your target group (see customer segment above). Tell them about the current status of progress and your reflections, and ideally develop a prototype that you can present or test.

You also need to make a start on branding at an early stage. The key questions you should ask yourself: what’s your startup’s story? And what’s the character and tone of its image? In the next step create your website and logo – everything else can be done later. The social media channels for marketing and communication will depend on your target group. LinkedIn is often the only worthwhile option for Business-to-Business models, whereas a wider range of channels is available in the Business-to-Customer segment. But don’t just think about your corporate profile. As a startup founder, you’ll achieve a wider reach for your idea on your personal LinkedIn channel if you publish content about your startup’s development on it. Firstly, because it’s interesting for readers and secondly since personal accounts have greater reach than business ones due to the algorithm used by LinkedIn.

Step 5: Launch the business officially when things get serious

If you can see that your idea is progressing well, is attracting great interest in dialogue with your target group and that customers are willing to pay for it, then make it official. But you need to choose the right legal form for your company. The most common option for startups is a private limited company because this form makes it easier for investor participation and to raise larger amounts of interest-free debt capital. The foundation process can now be carried out almost entirely online, for example, at the The link will open in a new window “Institut für Jungunternehmen” (IFJ).

Step 6: Raise the capital needed

You’ll have defined how much capital you need to implement the idea under “Key resources” in the Business Model Canvas that you created. For startups, the initial financing rounds usually take place in your own personal environment. Persuade friends, family and acquaintances to back your business idea to secure initial funding. This is usually provided through an interest-free loan so that you don’t need to issue shares in return. You can sometimes also obtain initial funding from ideas competitions, startup programmes or business development schemes.

But if you need more capital than you can obtain from friends and family or your bank, then working with business angels for the first pre-seed round is the best option. They don’t just invest five to six digit figures in your company, but also their time and expertise. You can meet business angels at startup events or via platforms and accelerator programmes. Christoph Jenny, co-founder and CFO of Planted Foods, provides some valuable advice on approaching investors: “Enabling investors to interact with our product was incredibly important in our search for investors. They were able to order and test it out for themselves. That’s why my advice would be not to approach investors until you have something tangible to present.” As already mentioned in step 4, investors often require a pitch deck, in which your business idea is briefly outlined. In pitch competitions, you present your idea through the pitch deck to a jury made up of investors who then decide whether or not to invest.

In a later growth phase, venture capitalists (VCs) are generally sought for even larger investments in the six to seven-digit range. VCs generally have little involvement in the company and focus heavily on the growth and profit that can be achieved through a sale or exit.

Make sure any contracts entered into with business angels or VCs are properly concluded. It’s well worth obtaining expert legal advice. The bilateral conditions between the investor and owner are agreed in what is called a “term sheet”. There are also shareholder agreements which set out how shareholders should conduct themselves for the term of their investment and what happens in the event of a parting of ways.

Step 7: Get good cover for you and your startup

Running your own company comes with tremendous responsibility – towards your employees and customers, but also investors, partners, suppliers and the public.

Insurance policies which are usually required from the outset:

  • Accident and health insurance: to protect yourself and your employees from the financial consequences of occupational accidents.
  • Employee benefits (2nd pillar): mandatory for all employees subject to Old Age and Survivors’ Insurance, if their annual salary exceeds 21,150 francs a year.
  • Private provisions: self-employed persons are not automatically insured by an employer scheme under the Occupational Pensions Act/Accident Insurance Act. This means startup owners should obtain financial cover, for example, by taking out a life insurance policy.
  • Business and building insurance: this provides company founders with protection for their startup against damage to property, loss of earnings, damage to machinery, IT infrastructure and technical equipment, as well as against transport damage and liability claims. If the company can get by with a laptop for each employee, but doesn’t require any other infrastructure, you can initially do without insurance.
  • Legal protection insurance: this type of policy protects startup founders against substantial financial risks in the event of legal disputes and provides them with professional support when facing legal issues.

Step 8: Get networking and ask for support

Networking is one of the most valuable things company founders can do. Sandra Tobler, co-founder and CEO of Futurae, also recommends this approach: “Right from the outset, establish a good network made up of other companies and mentors who have faced similar situations.” It’s now a question of where networking activities are carried out. You won’t get far by simply sending non-personalized requests on LinkedIn. Instead, focus on taking part in startup events or keynote presentations in your field of research or innovation. This is where you’ll find the right people to discuss your startup, concept and business plan with, to develop them and to forge the links you’ll need with investors, employees and customers.

As you’ll have to deal with absolutely everything as the owner – especially during the initial stages – including areas you know nothing about, knowing where to seek support when needed is vital. There are also often free services, incubators and accelerator, coaching and support programmes for startups. For example:

  • Startup support from universities (e.g. Runway Incubator at ZHAW, Entrepreneurship@ETH, Startup@HSG etc.)
  • Innosuisse
  • Genisuisse
  • IFJ Coaching
  • Entrepreneur Clubs such as ETH Entrepreneur Club, Entrepreneur Club Winterthur, Startfeld St.Gallen

These kinds of coaching and innovation promotion schemes are extremely valuable for startups to help them refine their business idea, establish key contacts, benefit from experience and sometimes also have the opportunity to utilize infrastructure. The coaches provide highly individual support and have extensive first-hand experience. There is a wide range of services and support available, as the promotion of startups, innovation and entrepreneurship is increasingly broad-based.

How to set up your own SME

Step 1: Find out whether founding an SME is the right path for you

SMEs are founded by people who want to own a company that’s similar to ones that already exist. The business idea and model are largely emulated. Compared to startups, it’s obvious that demand exists and you’ll ideally already have contacts with potential customers to ensure you get off to a solid start. In this respect, the starting position is much easier and the pathway to generating your first revenue is shorter than for startups. But the competition is fiercer and the chance of standing out on the market slimmer. When launching an SME, you also need to adopt an entrepreneurial approach, be able to deal with issues on many fronts and assume responsibility for your own job and salary, as well as those of your workforce. This means being able to cope under pressure.

Step 2: Develop an idea and discuss it

This step is only really necessary if you’re questioning the status quo of the business model. For example, you’re not opening a run-of-the-mill hairdressing salon but instead an all-in-one, get-ready studio offering a full range of services – haircut, shaving, make-up, etc. – before your customers pursue their own activities? You’ll need to explore this with customers beforehand to find out whether this service would actually be used.

Step 3: Get your business idea down on paper as a business plan

Admittedly, producing a business plan is a really arduous and abstract task. But your business plan will help you to identify who the competition is, what you need for your own company and what your financial position will look like. These are fundamental considerations that lay the foundations for your company. For guidance, you can look at templates and examples (link below) or seek advice where needed.

A typical business plan has the following structure:

  • Company including SWOT analysis
  • Services / products
  • Market
  • Competition
  • Marketing
  • Location / production / administration
  • Management / internal organization
  • Risk analysis
  • Financial planning

A good business plan will help you with planning and setting up your own company. A common mistake made in the business plan is not putting enough thought into positioning and market niche. Try to define your target group and what you can offer them as precisely as possible. This will make your business plan more incisive. It’s also worth outlining three financial planning scenarios with pessimistic, realistic and optimistic outlooks. This means you’ll be prepared psychologically and in terms of planning if your business fails to develop in the way you’d hoped – this may be due to certain economic developments and may not be to do with your personal capabilities.

You can find a free business plan template on The link will open in a new window SECO’s SME Portal.

There’s a complete checklist in our download “The link will open in a new window How to draw up a business plan (PDF, in German)”. 

Step 4: Simply get started

How you start out is vital: while it’s all about testing whether the business model actually works for startups, getting everything in place to ensure you can start production or win your first customers for your services is what really matters when it comes to SMEs. A website and an office may well be enough depending on the business idea. But you may also need a production facility, company car or tools. You’ll know instantly if you’re familiar with the sector. But if you’re entering a new industry or an unfamiliar environment, you should talk to other business leaders during this initial phase. Also consider the opportunities presented by franchise systems in relation to your startup. With a franchise licence, you could participate in a business chain, benefit from a generally well-known brand and receive support with an induction and materials from the franchiser.

Step 5: Found your company officially

Before you can generate revenue with your own company, without ending up in hot water legally, you have to go through the official foundation process so that your company is listed in the commercial register. The most common legal forms for SMEs are limited liability company and private limited company, depending on the starting capital required and the organizational structure.

Step 6: Raise the capital needed

Companies often start out with private equity or debt capital from a bank to cover the costs of manufacturing and selling products, or their IT infrastructure and personnel expenses in the case of service providers. No further financing rounds are usually required, as newly founded SMEs can generally generate revenue more quickly after foundation than startups. To ensure adequate funding of a growth strategy, for larger investments or to handle large orders, further cooperation with the bank, or private equity firms and family offices in the case of some growth projects, is the best approach.

Step 7: Get good cover for you and your SME

Insurance is also important for SMEs to provide cover in the event of any claims, health problems or for old age. SMEs do not differ from startups in this respect. In step 7 read how you can provide your employees and company with adequate protection.

Step 8: Network and develop synergies

The main responsibilities of the CEO of an SME are ensuring the company is financially sound and that wages can be paid. Networking helps to build and extend trust with existing and potential customers, to achieve extensive range and to raise your profile. There may also be synergies for joint projects, construction sites or store concepts. Events held in your sector on key topics or those organized by the industry association are ideal networking opportunities.

How to become self-employed by starting a sole proprietorship

First off: founding a sole proprietorship for freelancers is very similar to setting up an SME. You can basically follow the steps for launching an SME. There are no specific requirements for this form of company and from a legal perspective, sole proprietorships can be founded from the age of 16.

A company founded for freelance activities differs in the following respects:

  • Pressure: as you won’t have any employees as a freelancer, there is no pressure to pay staff salaries.
  • Motivation: the risk of letting certain things slide is greater because as a sole proprietor you’re only responsible for yourself and not for any employees. Your motivation is essentially intrinsic.
  • Self-discipline: in a sole proprietorship you can generally grant yourself more freedom and flexibility than in your own SME. That’s why greater self-discipline and enjoyment of working independently are called for.
  • Legal form and liability: instead of a limited liability company or private limited company, you set up a sole proprietorship. No initial capital is needed, but you bear unlimited liability with all your private assets.
  • Business idea: sole proprietorships are ideal for artists, photographers, self-employed therapists, freelance journalists or one-man shows in consultancy firms and agencies.
  • Financial requirements: as you bear the full business risk, it’s important that you’re financially secure or can flexibly reduce your expenditure. But this can prove challenging, for example if you have children, a large apartment or run a car.

You’ll find more about founding a sole proprietorship and everything you need to consider in our article “A complete checklist for founding a sole proprietorship”.

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