Many new entrepreneurs immediately get stuck on something very basic: their administration and tax returns. Understanding accounting rules and tax obligations turns out to be more complicated for many start-ups than expected. The lack of this knowledge regularly leads to uncertainty and even financial stress. This is evident from research by the Chamber of Commerce (KVK) among nearly 800 entrepreneurs.
Entrepreneurs consider knowledge of taxes and accounting crucial for a successful start, but much of that basic knowledge came later. One-fifth of start-ups would have liked to receive more explanation about taxes during the incorporation phase, while one in seven lacked information regarding administration and laws and regulations.
Lack of knowledge causes financial stress for first-time buyers
The open-ended comments reveal that a significant proportion of start-up entrepreneurs experienced financial stress in the initial phase of their business. Entrepreneurs state that a lack of basic knowledge led to uncertainty regarding tax assessments, accounting errors, unclear rates, or simply the question of whether sufficient revenue would be generated.
Some entrepreneurs describe extremely vulnerable situations. “Paying the bills. Will I lose everything? My house?” one entrepreneur recounts. Another writes how the start felt like “occasionally barely keeping my head above water.” Uncertainty regarding financial obligations also sometimes led to significant losses. As one entrepreneur reflects: “Losing a lot of money on the table due to too little emphasis on figures and accounts receivable management.”
These experiences show that insufficient knowledge at the start not only leads to administrative bottlenecks, but for many entrepreneurs has direct consequences for their financial stability, continuity, and livelihood.
Start-ups primarily seek information from networks and the Chamber of Commerce.
Starting entrepreneurs appear to find their way primarily through people around them and via the Chamber of Commerce (KVK). Almost half (44%) received important start-up information from other entrepreneurs, family, or friends. Four out of ten made use of information from the KVK, ranging from online explanations to other forms of start-up guidance. An equally large group discovered what is involved through trial and error. SMEs, in particular, learn in practice: almost half of them say that they simply started and discovered along the way what needed to be arranged. One entrepreneur sums it up aptly: “It was a matter of learning the hard way. I didn’t always feel like I really had things under control.”
Freelancers and SMEs have different information needs at the start.
Self-employed professionals and SMEs appear to have different information needs as soon as they start their business. Self-employed professionals primarily seek practical guidance: they consider information about taxes essential more often than SMEs (67% versus 60%), as well as knowledge about insurance (47% vs. 39%) and finding and retaining customers (47% vs. 39%). SMEs, on the other hand, look more often at the rules they must comply with. For instance, at the start, they more often wished they had had clarity earlier regarding legislation and regulations (20% vs. 14%) and subsidies and schemes (17% vs. 10%). “Did not always fully realize what was legally possible and what was not,” stated one SME owner.
Stumbling over the basics
Chamber of Commerce business advisor Christiaan Hazelaar on the importance of basic knowledge at the start: We see that many entrepreneurs start out full of good ideas, but stumble over the basics. If you struggle with administration and taxes right from the start, unrest and financial stress quickly arise. Some entrepreneurs face difficult choices within just a few months, simply because they didn’t know what was expected of them.
“Starters often learn by doing,” Hazelaar explains. “But without basic knowledge, that quickly leads to uncertainty and preventable mistakes.”
Hazelaar sees the importance of starting well-informed: “A good start is not a luxury, but a prerequisite. If entrepreneurs inform themselves well from day one, it saves not only stress, but also money and opportunities that would otherwise be missed. Reliable information is available, including from the Chamber of Commerce (KVK), but entrepreneurs do not always know where to find it in time. The KVK is there to help, and we do so wholeheartedly. Our website contains a huge amount of general information. And entrepreneurs can always contact the KVK Advisory Team. We can further interpret that information, also tailored to your personal situation.”
Reliable information and advice essential for start-ups
The results of the research underscore how important it is for entrepreneurs to have access to reliable information and timely advice. The Chamber of Commerce helps both start-ups and experienced entrepreneurs with practical knowledge, clear explanations of regulations, and personal advice. This enables entrepreneurs to make better-informed choices and stay ahead of problems at every stage of their entrepreneurship.
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