Doing Business in the Netherlands

Introduction to Starting Out

Starting a business is the one thing that many people dream of in life -yet new start-ups do not make it past the first year. Knowing what you are capable of, and where you want to be in the future, is the essence of your business and this can come about with a good Business Plan. In today’s global and highly competitive business environment, enterprises, whether large or small, cannot hope to compete and grow without proper planning.

Get a business plan sorted – Writing a business plan helps you think about what you are doing, helps you focus and develop your ideas. Priorities are identified. Non-priorities are dropped, saving precious time. Even having a simple spreadsheet showing how the business will grow in terms of sales and all your costs coming in will show the cold light of reality and just how much money you may need to fund the initial start up phase.

Putting a business plan in place will also ensure that you will research your market – and that means customers. Your customers are going to buy your products/services. Just imagine your typical customer, their age, where they are based and their income. Why on earth will they buy from you and not one of your competitors?

There are reliable sources that provide customer and market information at no cost and these statistics can help prospective small business owners. The National Statistics Office in your county publishes data related to different sectors such as environmental transport, and tourism statistics that can be of help in researching your market.

Central Bureau of Statistics
Central Bureau of Statistics - Dutch

Spend time on your pricing – a lot of people believe that the lowest price always wins, and sometimes it can when you are selling a commodity product but with services it can be tricky. You can learn a lot from your competitors and what type of customers you are targeting. It can be difficult to increase prices once you have had low pricing for a while but easy to have sales and special offers. Higher pricing also suggests increased perceived quality so it’s not just about the actual figure but how your business is perceived in the marketplace that also matters.

How many customers do you need to meet your profit projections? Once you have your business plan ready break it down, so you know just how many sales you need per day to meeting your weekly, monthly or even yearly profit projections. Then you can know instantly if you are ahead or behind. You can easily put a spreadsheet together to add up sales and costs on a weekly basis then you can make adjustments if things are not quite going to plan.

The Business Plan is also the medium through which you can discuss your ideas – but of course with only those you trust. When you are deep within your own project it can be hard to think outside of what you know and getting a friend or family member who you really can trust and who will provide honest feedback is essential. If you know someone who already has a successful business, then get them to go through your ideas as there maybe something you are missing or could do better with. Many a good idea has been stolen so be careful who you discuss your plans with especially if you are developing something online.

Consider you start up costs – sometimes these can be low (for example if you are going to offer consulting services and you already have some clients). Even if you are offer consultancy services, you will need to check out the costs such as internet, phone line, administration and social security costs. For many these are huge (to open a restaurant there are so many initial costs such as shop fitting and equipment) so make sure you account for them all, so you don’t get too many nasty surprises.

A business plan:
  • Helps highlight aspects of the business that need special consideration
  • Helps identify your core competencies (what you can do best) and internal weaknesses
  • Helps identify internal weaknesses and external threats
  • Makes you aware of new opportunities that may arise
  • Helps you understand your competitors
  • Helps you plan your operational setup better
  • Helps you use your financial resources more efficiently and ultimately more profitably
  • Helps you manage your business better
  • Helps you measure actual performance compared to what was planned
  • Assists your management capabilities in relation to specific tasks and functions as well as bring awareness to human resources and capacity needs
  • As part of the process of a business plan, you set concrete objectives, milestones and timelines and plan how you will achieve them. Putting the plan in writing makes it easier to spot any gaps where you have more to do. The plan sets out your strategy and action plan for the next one to three years, or sometimes longer.
  • Once written, the plan is a benchmark for the performance of the business. It can elevate and build up a successful, committed team spirit within your enterprise by involving your employees in the complete planning process.
  • A business plan is essential if you are require finance, government or EU grants and incentives or If you are looking for a business partner or outside investors. A good plan can also help you attract new senior management, or business partners such as distributors and agents even so when you are starting a new project or venture.

There are many sites to refer to when writing a business plan.

For support in writing your business plan, you can contact your local incubator or Chamber of Commerce. For tips, tricks and examples on the development of a business plan for a more traditional company (for which a lot of data is already known), you can go to the website of the Chamber of Commerce or for example to If you want to start a business where relatively little information is about (based on innovation or new trends) the Lean Model Canvas or the Business Model Canvas are more appropriate.

For support on all these topics, you can go to Startup Program (there are costs involved).

Here are some tips to help you start out:

Start whilst being employed – Consider carefully if it is possible to start your own business besides your employment. Starting your business with fulltime attention has certainly advantages, but it can also be risky.

Starting your business from an employment situation can be beneficial (still an income), but also gives some points of attention. Make sure you understand and follow your employment contract and manual. This is particularly important so that you ensure that you abide the contractual obligations, refers to inventions and intellectual property (IP) developed as part of your job. Almost always, anything developed on company time and using company property belongs to the company.

Start small and grow big – some of the most profitable businesses are in small niches and are the biggest player in the niche– almost no new business becomes a big success overnight although we all think that our ideas are the best so when it comes to planning be realistic and not believe your business will keep doubling in turnover in the first 3 years. The break-even point for your business should be calculated to make your aware how fixed costs, variable costs, total costs and total revenue change with the level of output.

Look into Social security, licences and tax before even starting out - there are so many hoops to jump through from letting the tax office know that you are now self employed and registering for VAT to setting up a limited company if you are going down that route to any health and safety certificates if you need them. So, make sure you know what is required otherwise you may find yourself with a big fine.

Keep all receipts as you are setting your business up because all of this can be claimed against tax at the end of your first financial year and expenses that have VAT attached to them can be reclaimed if you register for VAT.

Location – it has all too easy to see an empty shop in your high street and think that you can open a business there and make your fortune but many a time a business is not there for good reasons. So, think really hard on your location because in reality you only get one shot at getting premises and once you have signed that contract it’s going to be hard (and expensive) to get out of it.

Get professional advice – you may read which legal company set up is right for someone yet it may not be right for you because of your personal circumstances . It is always wise to seek the advice of a qualified account if you are setting up your business as a legal format. Most certainly you should speak to a personal tax advisor especially if you are not separating business in a legal format or if you are setting up a business overseas as you need to understand how this affects your personal tax. It is important to distinguish between an accountant in the case of business accounts and a personal tax advisor with regards your personal tax matters as knowledgeable persons are specialised in one field and not both. Likewise, it is important to separate your personal and business bank accounts as it really is a lot easier to account for everything. Besides your personal bank account will not accept cheques and payments made out to your company. Find out which Bank can offer you free business banking and do your homework on how to avoid paying unnecessary charges for transfers and payments. Consider that time is also money so easy access to online bank is a must.

Outsource tasks – if you are going to run your business alone, you probably need to decide on which key tasks you will focus. It will be difficult to do everything such as accounting, answering calls and emails, marketing your business etc. It all takes time, and you should focus on the tasks that are your expertise and bring in the cash. Take a close look at which tasks you can outsource, which gives you more time to focus on your strengths and building the business.

Do something you know – if you want to start a business but have no experience in the field you are entering then you have a steep learning curve to climb. Although this can be done people with the knowledge will likely succeed more than you. If you need the knowledge, then acquire it via training or get someone how has the experience to help you.

Do something you enjoy – it is no use running a business you hate. Prepare for hard work – because starting a business requires a lot of your time and energy.