Do you start a company, just to try out a business idea? | Hacker News Reader

Do you start a company, just to try out a business idea?

7 pointswaspight11 comments

It would be preferable to have a registered company when launching a saas, just to not be personally responsible for issues with GDPR, terms of use and such things. But, at least here, it costs about 2500$ to register a business. How do one think about this in the early stages, when you are just testing your ideas with the market? It is a bit expensive if it does not succeed.

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I’m curious how European economies justify the high cost of starting a business?

Maybe I don’t fully appreciate the situation. I have known some German freelancers be stuck, unable to afford to start a business. However without a business the freelancers clients will be seen as participating in disguised employment. Same goes for issues the OP cites like personal liability, etc. In the US, business licenses are relatively easily obtained to protect individuals. It would seem to benefit society to encourage new ventures. Though this is perhaps my American biases. I’m sure I’m misunderstanding something.

> I’m curious how European economies justify the high cost of starting a business?

Short answer: they don't.

Longer answer: countries in Europe don't want some guy opening a business out of his garage. They want somebody with fat stacks of cash who will be able to afford to pay high fees and taxes right from the start and then pay some more when/if his business actually makes revenue/profit.

Things are slowly changing, especially in the smaller economies, but change is slow.

SOME countries, perhaps. Many - no.

At least in the Nordics starting up an LLC equivalent costs around 100$ in registration fees and takes about an hour (plus a week or so waiting time). Of course, you’ll need the initial capital. In Sweden it’s SEK25000/$2500.

> Of course, you’ll need the initial capital.

Which is quite reasonable compared to say Germany or Switzerland (or hell, even Croatia) but still not $0 like in the USA.

In the Netherlands there’s a lot of freelancers operating as a sole proprietorship. If you make a 100.000$ or more you can consider a business license.

In Germany starting a GmbH starts at 500€, and to be a freelancer you don't need one. You just need insurance to limit you liability.

You can start offering your Saas for free (so no need to stablish a company since you are not actually selling anything online, nor making money). Let if run free for 3 months, see if people actually use it and if so, then proceed to make things official.

It makes absolute no sense to setup a company just to check if your idea works.

But what if I for some reason get sued? Or break gdpr? I get my personal finanse at risk anyway I guess.

Depends on your jurisdiction, but in many places putting up a website and taking signups doesn't require a registered business.

In the case of OnlineOrNot (https://onlineornot.com) - I just used my name. It hasn't stopped people signing up and paying me.

The general feedback I have seen around this is to launch and re-evaluate as you go. As soon as you are making enough to justify the expense, do it.

You could run a more general software house-type company, and spin off successful startups if it's necessary.

Wait until you actually have a business, though.

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