RLP: Fewer founders but stable companies

Founders now need a lot of courage and support from start-up centers. This is shown by the 2023 Start-up Report of the Chambers of Industry and Commerce and the Chambers of Skilled Crafts of Rhineland-Palatinate. At least existing companies in the state are holding their own.

This article is part of the special feature GründerNavi – for founders and young companies

Businesses, retailers, and craft enterprises in Rhineland-Palatinate are holding their own in the market despite the numerous crises. That's the good news. However, fewer and fewer people in the state are finding the courage to become self-employed.

Last year, 31.493 people registered a business in Rhineland-Palatinate – almost six percent fewer than in 2021. However, because there are still more new businesses than closures (27.381 businesses deregistered in 2022), Rhineland-Palatinate recorded an overall increase in the number of businesses for the fourth year in a row . In 2022, the increase was 4.112 businesses.

On the development of the craft industry

"The pandemic, the war in Ukraine, the energy crisis, inflation and interest rate jumps have also left their mark on the start-up landscape in Rhineland-Palatinate," commented Arne Rössel , Managing Director of the Rhineland-Palatinate Chamber of Industry and Commerce Association, on the joint Rhineland-Palatinate Start-up Report 2023 by the Chambers of Industry and Commerce and the Chambers of Skilled Crafts of the state.

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Rössel continued, saying that significant changes are already evident and expected, particularly in the skilled trades and retail sectors . "Especially in these uncertain times, taking the first steps towards self-employment requires courage and commitment."

Given the various crises, it's hardly surprising that the number of start-ups has declined somewhat, notes Arne Rössel. "More start-ups require confidence in the improving framework conditions as well as appreciation for entrepreneurship in society."  

Startup centers support aspiring entrepreneurs on their path to self-employment. They are a collaboration of the eight Chambers of Industry and Commerce and Chambers of Skilled Crafts in Rhineland-Palatinate. Each year, they provide approximately 13.000 inquiries , 3.000 consultations , 2.500 startup packages , and support several hundred participants in consultation days and provide expert opinions for funding programs in Rhineland-Palatinate alone. Their services are free of charge.

To ensure that existing businesses in Rhineland-Palatinate continue to hold their own in the market and that more new companies are founded, the right framework conditions and development opportunities are needed, according to the associations: "Ideal prerequisites for this are the diverse economic structure, attractive funding opportunities, and access to educational institutions and networks," explains Axel Bettendorf, Managing Director of the Rhineland-Palatinate Chamber of Skilled Crafts and Trades.

For over 20 years, the startup centers have been the first point of contact for aspiring entrepreneurs. "We are pleased that, together with the state government, the chambers of commerce, and the startup centers, we can increase the chances of success for starting a business – through tailored services and support options," Bettendorf continued.

Increasing demand for consulting and seminar services offered by starter centers

According to the startup centers, in times of new technologies and rapid business developments, cooperation, exchange and networks are becoming increasingly important for a successful business start-up.

And individual consultation is playing an increasingly important role. The number of registrations for networking events and seminars rose by a fifth last year, and the free tax or legal consultation days saw a quarter more participants.

Women’s start-ups tend to be more of a main occupation 

Also encouraging: Women's interest in starting their own businesses remains stable and is shifting more towards making it their primary source of income. According to the startup report, flexibility, better financial incentives, and the opportunity to make a social contribution are particularly important to them.

Even established companies are facing changes: In Rhineland-Palatinate, up to 9.000 companies are up for takeover by 2028.

Due to demographic trends, this number is expected to significantly exceed the proportion of young people who venture into self-employment. "Therefore, it is crucial that we work together to support entrepreneurs in our state," says Günter Jertz, CEO of the Chamber of Industry and Commerce for Rheinhessen.

"It must be easy to start a business here in Rhineland-Palatinate – politicians are called upon to reduce bureaucratic and tax hurdles and to support the step into self-employment through tailored financing assistance."

Development in the craft industry

In 2022, the number of skilled trades enterprises in Rhineland-Palatinate increased slightly again, reaching 54.825 (2021: 54.077). The movement and distribution of trades across Annexes A, B1, and B2 remained similar to the previous year. 

The number of trades requiring licensing decreased slightly in favor of those not requiring licensing. Nevertheless, licensing-required businesses still represent the largest share of the total number of craft businesses, at 65 percent.

Compared to the previous year, there was an upward trend in new entrants within the licensing trades in 2022, with a slight increase from 1.772 to 1.790. Among these new entrants, the leading sectors were hairdressing, electrical engineering, automotive engineering, plumbing and heating engineering, painting, varnishing, bricklaying, and concrete construction. 

The highest number of new business start-ups, with 2.438 new businesses, was reported in the non-licensed trades. The highest start-up rate was in building cleaning, followed by cosmetics and photography. 

There was a slump in the 956 new entrants into the skilled trades. The number of new businesses offering the installation of standardized prefabricated building components remained high. Flooring fitters also recorded brisk start-up activity.

Source: IHK Rheinhessen

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