Points to Consider When Starting a Small Business In Switzerland

Switzerland consistently ranks among the top countries in the world for doing business. In fact, 51,637 new companies were founded in Switzerland in 2023 alone.

This encouraging environment, coupled with a stable economy and skilled workforce, makes Switzerland a choice destination for aspiring entrepreneurs. 

But before diving headfirst into opening that business, plan carefully and do your own research. Besides fulfilling legal requirements for company registration, consider other significant factors like your business location, financial resources, hiring model, etc.

Let's consider other factors when starting a small business in Switzerland.

Compare terms and conditions for business loans

Securing adequate funding is a crucial hurdle for any aspiring entrepreneur, and statistics show it can be tough to overcome—almost 50% of all loan applications in Switzerland are rejected.  

While tempting, relying solely on a string of small loans can place your budding business in financial trouble. The multiple loan payments will eventually become overwhelming, jeopardizing your ability to meet installments and manage other pressing bills.

You can avoid this situation by meticulously comparing business loan offers.  This is especially true for traditional installment loans, where loan terms can vary significantly between banks.  Don't settle for the first offer that comes your way.  Take the time to compare interest rates, repayment schedules, fees, and any collateral requirements.

Foreigner entrepreneurs looking to start a Swiss small business should be particularly proactive in planning their financial resources.  Researching and comparing loan options before approaching lenders can give you a significant advantage in securing the perfect loan to ensure your business thrives.

Check premises and location

Finding that perfect location and premises is a foundational step for any small business. Your business address should be a strategic decision aligned with your business model and growth aspirations.

Here are some key questions to consider:

• Customer Accessibility: Is a high-traffic city center location ideal for your customer base, or would a more suburban setting with ample parking be a better fit?
• Digital Presence vs. Physical Footprint: Can your business thrive primarily through online channels, or do you require a physical storefront to build customer trust and brand recognition?
• Growth Potential: Does the space allow your business to expand its operations or team in the coming years? Does it provide opportunities for networking and collaboration within your industry?

A strong online presence is crucial for attracting customers, even for brick-and-mortar businesses.  Look for a location with good internet connectivity to support your digital marketing efforts.

Legal requirements are also essential.  Zoning regulations and permitting processes can vary depending on your location and industry.  So, conduct thorough research and consult with local authorities to ensure your chosen premises comply with all legal requirements.

A thorough environment analysis can be carried out to avoid situations such as opening two more shops on the same street or right next to your direct competitors. This increases the chances of a successful business start.

Don’t start a business without having a solid plan

A business plan is more than a fancy document with numbers, statistics, charts, and graphs. It serves as the roadmap for your entrepreneurial success from concept to execution. That is why companies with business plans are 2.5x more likely to secure funding.

Here are some key questions a robust business plan should address:

• Market Analysis: What problem are you solving, and who is your target customer? What are the current market trends, and how will your business position itself within the competitive market?
• Financial Projections: How much capital do you need to start, and what are your projected revenue streams? Creating a realistic financial model is important for attracting investors and securing funding.
• Operational Strategy: How will your business operate on a day-to-day basis? This includes outlining your staffing needs, marketing strategies, and production processes.
• Legal and Regulatory Considerations: Understanding the legal and regulatory framework that applies to your business is essential to avoid costly challenges down the line. Researching permits, licenses, and favorable tax rates in your chosen Swiss canton is important.

Addressing these questions in your business plan will give you a clear understanding of your business's viability and increase your chances of surviving the initial challenges startups face. You should revisit and revise your business plan and grow your entrepreneurial vision into a thriving Swiss enterprise.
  

For more details and assistance regarding company formation in Switzerland, feel free to contact our expert consultants. Our highly experienced and well-informed team is ready to answer all your questions and give you all the help you might need.