Business start-up basics!
Enough is enough with the personal posts I have been writing on my
blog. I have been talking too much about feelings, and not enough
about business... I guess for me the two go hand in hand.. you see...
there I go again :)
SO I promised a
Serbia start up talk for all those who want to start a business in
Serbia (I know that this post might be read by no-one)
SO in order to cover
this is an orderly way, I divided the main areas to discus in a few
sections
1. Financing and
accounting
2. Preparations and
time frame
3 Ownership
responsibilities
4 Staff
5.Distributors and
suppliers
Lets go through it
one by one.
1. Financing and Accounting
Financing your
business in Serbia is of course the first thing you need to think
about. You need money to make money. The business in Serbia was
started with around 15,000 euros. This includes the paperwork and
administration fees, stocking the bar, stocking the bike shop,
building materials, promotion and marketing. We saved up all our
money for around one year to have the starting funds. I know many
businesses that started here for way less, and some that started for
way more. Calculating your costs is a lengthy procedure, you can do
this by simply asking other business owners for their costs, checking
product costs online and adding the amount. However it cannot be
accurate because of fluctuations in the market. You also need to have
a buffer of one or two months rent and bills prepared for the initial
phases of the business when it is just starting to get off the
ground.
What licences do you
need to start your business? The papers for starting a business in
Serbia are fairly simple, but you cannot do them alone, you will
need the help of an accountant (especially if you do not speak
Serbian very well) A lot of the running around to get different
papers can be done by you, but you will need the help of your
accountant to know which papers you need and to guide you through the
process. I really depend on my accountant when I need help to get any
kind of paper associated with CE, he usually knows which office to go
to (because there are lots of different ones). If you feel confused
with the business structure here, the best thing to do is to ask lots
of questions... but to the right people. If you know someone who
already has a business like the one you want to set up, or at least
some knowledge about it, be sure to ask them for their advice about
which accountant you should choose, someone here always knows someone
and the connections between people are extremely important.
Also your accountant
can give you advice on which kind of business you should set up,
there are two main structures for the tax system of businesses here
1. D.O.O is for a
bigger company, this because the taxation system is much stronger, it
also allows for export and import (we set the bike shop up as a D.O.O
because we were importing parts, not because we were making a lot of
money) The cost for opening this kind of business is 1-2 hundred
euros, If I remember right.
2. Preduzetnik: this
is for entrepreneurial businesses, with one main owner, you don't get
heavily taxed until you reach over 40.000 euros a year in profit
(that means after you take out salaries, your monthly wage and
company expenses) You can see that for a small business this is
impossible, so its better to be a Preduzetnik. As soon as you are
extremely successful and get over that amount (we haven't yet) you can
transfer your company to a D.O.O
The taxes for
opening a Preduzetnik are around 3-4 hundred euros, if I remember
correctly, it is not more.
Can foreigners take
out a business loan? As far as I know you cannot take out a business
loan without having sufficient credit in the country, meaning owning
property or having some security. You would need to ask for this at
the bank, I am not entirely sure.
Visa? You need to
set up the company before you ask for a business Visa, as you need
the starting papers to fill in your application. Most of the
paperwork here in Serbia can seem kind of confusing in the way that
you don't know what comes first, the cart and the horse trade
positions regularly. For instance shouldn't you have your visa
(permission to stay) before you can begin a business... but then
again how would they know you will set this up without the papers.
Visa's are another
subject all together, and I will have to cover this in another post.
One question I get
ask is if it is more difficult for a foreigner to set up a business
in Serbia, then for a local person. The answer to this is No, its not
more difficult. The paperwork is almost the same, you just need some
additional information on your stay in Serbia, you need no university
qualifications to set up a Cafe or bike shop. No special education is
needed or proof of previous employment (I am including this because
it is different in other countries)
The licences you
need for a Cafe
1. Business licence
in your name (this takes about one month to be finalised)
2. Music license, if
you will have music played on a laptop or other sound system, or live
shows and bands(I have to cover this in another post, its a big
subject).
3. Fire and safety
check (You need to do a short training with your staff, which they
organize, its really funny)
You do not need an
alcohol licence to sell liquor here
The licences for a
Bike shop
1. Business licence
in your name
You do not need a
separate licence for repair or sales of bike parts, this should be
written in your original paperwork, specifying the kind of sales you
will make and the kind of services you offer
How much work is the
paperwork? Well if you have an accountant, and some perseverance, its
not that much work. It does take running around to a few different
offices to sign this or that. Going to the bank a few times etc. but
in general all can be done in around a month or a month and a half.
2.Time frame and
preparation
This is dependent
mainly on you and your resources. For us we spent a year saving for
the finances of CE, we spent another 3 months looking for the right
location (though we were doing this the entire time) I will cover in
another post the process we went through to find the CE location in
Novi Sad. We spent one month exactly on building the interior of CE.
We did have a big work force, all of us joining in and working
together, plus the help of many, many friends. We put a poster on the
window with the date we would open, so we really couldn't change it.
As for the time
frame for the paperwork, it is mentioned above.
3.Ownership
responsibilities.
The owner of the
business on the paperwork (me) is responsible and held liable for
everything that happens within the company. Anything
that is found illegally is held to your name. You will have to at the best go
to court for any infractions, at the worst case, go to prison. Also
your signature is needed for every decision, unless you sign the
power to another person within the company, which is what I will have
to do, as we expand the company in other countries (I cannot always
be here). Every week you have to bring the income for the business to
the bank, see the form below.
It is written out
like this, your signature needs to seal the deal, also to pay any
bills, you must be the one to sign, employees signatures will be
noted as a forgery and could cause problems. If you have a question
about this, you should ask your accountant.
Your taxes for the
business will be paid monthly, to do this, you will get the correct
forms from your.. yes you guessed it.. accountant. You need to sign
the papers and bring them to the bank, the amount will be subtracted
from your account.
The bad news is that
there are many laws in Serbia covering every area of business.. the
good news is that no one keeps them. One of the most confusing areas
of being an owner is that there is really so many grey areas in the
law. Things that are written that you must do, but if you ask your
accountant or other business owners they will tell you that its not
necessary and that no one does it. If you are confused and wonder if
you can get into trouble for this, they will always tell you in the
very Serbian way... 'don't worry, nothing bad is going to happen'.
Not always true, but yes very optimistic.
There is also a list
of requirements that every business must have before it opens. You
can obtain this from the inspection office (ask your accountant where
it is). Before we opened CE, I heard a lot about the merciless
inspections that happen here. I went to the inspection office before
we opened and talked to the main lady in charge, I explained that we
wanted to set up the business to fulfil every expectation. She was
friendly and gave me the list of things they check for in a Cafe.
Such as the smoking signs being correct, the fire escape signs, the
correct number of seating for your licence, the amount of bathrooms
you need. (Your accountant can tell you most of these things as well,
and you will need to know them before you build anything, but it can
help to find out exactly what infractions they look for)
4.Staff
Staffing your
business is going to be different depending on the size of your
operation.
The taxes for one
staff member is roughly 120 euros a month. You pay this to the
government through your bank account. Not all the staff who work for you
need to on a permanent legal basis at your business (check this with
your accountant) there are loopholes.. that's all I will say. Every
business in Serbia has people working on black, whether you choose to
do this or not is up to you. Your immediate family can work in the
business without taxation.
Also all employees
whether legal or on black must do a hygiene test, to see if they are
healthy enough for the working environment.
To do this, you must
go to a building on Futoska Street where they do a few tests, they
ask you for a poo sample (in a small bottle which you get at the
pharmacy) I still remember that me and Suzy brought ours on the wrong
day and had to keep it in the fridge overnight.. disgusting. Also one
time I got a very official letter stating that one staff member had
not given enough poo in her sample, really funny. They also stick
something in... wait for it... your nose and mouth, you sort of line
up and they just attack you with two cue tips. After this you wait
for a week and you get the results, almost everyone passes, but its
best not to go if you the flu or are sick, wait till you feel better.
The cost of this test is about 10 euros. Everyone must do it,
including you as the owner, if you are working within the business of
course.
The normal wage for
someone working in Serbia is about 900 din per working shift,
incredibly low, the minimal wage I think is 850 din, this is for 8
hours of work.
If you are employing
legally, you will have to take their salary from your bank account,
if they are working on black... well you figure it out.
5. Distributors and
Suppliers
The suppliers from
the companies that give you beer or other drink products will most of
the time supply you with the fridges, glasses, promotional material
etc. You need to call them to set up a meeting and discuss what you
are doing. They will come to the premises and suggest to you what
they can give and what they need from you. You can find their contact information online.
You will have to
sign some contracts with them.
They will come
regularly to check on your sales and to also maintain the equipment.
You can choose to
also get your coffee and machine from a supplier, in that case you are bound to use their blend, and a certain amount of coffee per month. We chose to get our
own machine (second hand) because we wanted the freedom to change our
coffee suppliers if we wanted to have different blends. ( I will
cover the subject of coffee in another post, also where to source
some of your equipment from, as in second hand or new, will have to
be written another time)
Ok so also when it
comes to your business you will be pleased to hear that there are
many inspections that frequent Cafe businesses. I will talk about our
experience in this, in yet another post.
I hope I covered the
main areas for business start-up in Serbia. Unfortunately I cannot
verify my figures exactly because its been 2 and a half years since
we started and some taxes might have changed. This post took me about
4 hours. I hope its useful. To re-cap the first things you should do
are
1. Find a good
accountant (preferably who speaks English, because a lot of things
are really hard to explain in Serbian, they are complicated legal
terms)
2. Find out what the
requirements are legally for your kind of business
I hope this helped
you :) write me if you need more help
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the fire escape plan in CE, you need this to be in a visible place legally, no matter how obvious the exits are |
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My draft for this post :) |