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Start-up step by step
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In order to determine what type of business is best suited as sales channel for the product you want to market, you can categorise businesses by type.
Below you will find the most frequently occurring business types in Denmark and their definitions:
Wholesaler
A wholesaler is typically an intermediary between a manufacturer and a retailer. Thus, a wholesaler´s customers are often other businesses. Wholesalers usually do not sell to private consumers unless they are also owners of a retail business. You can run a retail business and a wholesale business on the same CVR (VAT) number.
Many wholesalers also function as importer of goods. After importation such goods are distributed to several retailers.
Usually, starting up a wholesale business requires a substantial amount of money as stockpiling is cost-consuming.
Good salesmanship can, however, have your goods sold even before they arrive at your warehouse. Your customer may even have committed to a 40% prepayment on ordering.
Store
A store is defined as a business selling goods directly to consumers. A store could deal in millinery, vegetables, oriental foods, radio and TV repairs or something completely different.
A product´s sales price is always: (purchase price + expenses + profit) + 25% VAT.
Selling to private consumers, certain rules apply. In Denmark the law protects private consumers against companies. Among other rights, consumers have a 2 years´ right of return of defective products.
Opening a store is usually costly as considerable stockpiling, inventory, rent, maybe also advance rent just to get the lease, etc. require capital.
Restaurant and grill bar
The term "catering trade" comprises restaurant, pizzeria, take-away, café, bar or any other type of food processing outlet.
In Denmark high standard hygiene rules apply to producers of foods. Such rules include mandatory full tiling of kitchens, stainless steel sinks and refrigeration/freezing appliances and daily and weekly cleaning schedules must be made.
Thus, it is important to consult the local department of the Danish Veterinary and Food Administration for a specification on statutory requirements (www.foedevarestyrelsen.dk).
As is the case for stores, opening a restaurant is too costly as this type of business also provides stockpiling, furniture, equipment and rent and maybe advance rent just to get the lease. In return you will be able to make money right away as long as you make sure to attract many customers from day one.
Service industry
In the service industry, services are offered to businesses as well as privates. Services carried out by a service company include interpretation and translation, software engineering, entertainment, cleaning, gardening, designing, etc.
Getting started in the service industry is often inexpensive. Often you just need a phone, a PC and a head full of specialised knowledge. So you actually just have to make enough money to cover your private consumption.
Manufacturing
If you bake bread, produce iron rods or stainless steel containers you are producing new physical objects.
Only a very few people start a production plant as this requires a huge investment, production expertise and sales channels access.
Craftsmanship
Craftsmanship indicates that you are a craftsman. Danish craftsman´s businesses are typically bricklayers, roofers, plumbers, and sewer constructors.
Often, owners of craftsman´s businesses have obtained their education from a technical school.
It need not be expensive to start up a craftsman´s business - all you need is proper tools and a van.
Thomsen
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