Rise of the small business

Since late last year, the topic of entrepreneurship has come under the spotlight. The number of self-employed people (ZZP’ers) had risen from 784,000 in 2013 to 809,000 at the end of the third quarter in 2014, which caused concern for the Dutch government – there were plans to abolish the tax rebates (zelfstandigenaftrek) for small entrepreneurs. Finance Minister, Jeroen Dijsselbloem also told RTLZ that self-employed people have few social securities but enjoy relatively high income tax breaks.

Several reasons are being quoted by experts and business owners with regards to the increase in the number of self-employed people across the country – the economic crisis that left many without paid employment, the desire to be one’s own boss and the relatively straightforward and conducive business climate to become an entrepreneur in The Netherlands.

Why the increase?
Azra Secerbegovic, Entrepreneur and Owner of ASPA & Wellbeing Studio@ASPA, says: “The mentality of one job for ever is over. More and more people are interested to put their own stamp on their future and technology and the society are enabling it to happen.”

Stephanie Ward, marketing coach for small business owners and owner of Firefly Coaching, concurs. She states that there has been an increase in the number of small businesses since the economic downturn of 2008. “Over the past several years many people lost their jobs. Instead of looking for another job they took their newly found situation and decided to go out on their own.” She also adds that established support networks and Dutch infrastructure make it really easy to get a business started.

Certainly, the Dutch regulations have made it easier to start a business here with the ZZP status for both locals and internationals. Jonathan Talbott, TIP (Talbott International Presentations) and director of network group BNI Seagull, states: “Approximately 10 years ago, the Dutch government made it significantly easier to become self-employed, with the creation of ZZP status and the associated VAR. These made it possible to work for multiple parties without having tax and social security issues. All of a sudden the idea of starting your own business became attractive.”

Recently, the Dutch government introduced the Modern Migration Policy Act that promotes international entrepreneurship –start-ups and entrepreneurs outside the EU can apply for a one-year residence permit to start an innovative business in The Netherlands.

Look out for pitfalls
It is not all rainbows and butterflies when it comes to becoming your own boss; there are major challenges that all business owners need to overcome – from the language barrier (if you are not local) to being entirely responsible for your retirement funds.

Ward says that the language is an obvious challenge. “Even though The Netherlands boasts an incredibly high rate of English language mastery, if you don’t speak Dutch, your market will be limited by that. With that in mind, if there are enough English language speaking people in your target market, then it’s not a problem,” she explains.

Managing one’s own revenue, expenses and pension is also a major challenge for small business owners. A recent study by insurer, Centraal Beheer revealed that 41% of self-employed workers are not saving for their pensions and 21% of respondents felt that their monthly retirement income was insufficient.

Talbott explains that the tax policy that makes it easy to be self-employed also means that a person is entirely responsible for his or her pension and insurance. “Going out on your own means that you don’t have the support system of working in an office. Nobody is taking care of you. Running a business is completely different to following your passion,” he adds.

However, an increasing number of insurers are providing plans for entrepreneurs to save for their pensions. According to Nu.nl, pension administrator, APG in January launched a flexible pension fund for self-employed people and start-ups Bright Retirement and Insurance Brand New Day launched plans for freelancers.

Seeing the bigger picture
Experts advise entrepreneurs to look at the bigger picture and research their targeted markets before getting started. “There are so many new ZZP’ers who have no entrepreneurial experience and who have a difficult time seeing the larger, long-term picture, because the smaller, short-term picture seems attractive,” explains Talbott.

Secerbegovic says that entrepreneurs should get to know their markets. “You need to do good market research. If you like something, it does not mean that other people will like it. Get a good accountant and learn the rules. Do your own paperwork and do not think that somebody else will do it better than you,” she says.

Networking is also quintessential for conducting a business and there are a multitude of networking groups available in The Netherlands for both locals and internationals. Each gemeente or municipality in the country also provides links to business networks in the region. Amsterdam’s I amsterdam site and The Hague’s DenHaag.nl, feature various networking groups and links on the essentials to setting up a business in the cities.

“BNI Seagull is a network of international and Dutch entrepreneurs whose purpose in getting together is to help each other’s businesses grow. Probably the biggest challenge for our entrepreneurs (international or otherwise) is identifying and approaching their market,” says Talbott.

He adds that internationals often have the problem of knowing only other internationals but those markets are not always large enough to be sustainable. “In order to be successful, we need access to more than just the internationals that we know,” he explains.

By Priya de Langen