For self-employed people and freelancers, dealing with bureaucratic tasks is increasingly becoming a major burden: on average, they spend around eight hours, or one full working day, per week on bureaucracy. “And actually everyone assumes that there will be even more,” said Karsten John, managing director of the opinion research institute Infas Quo, when presenting a study on the economic situation and the concerns of the self-employed.
The burden varies significantly, also depending on the size of the company. While only seven percent of smaller self-employed people spend more than ten hours per week on bureaucratic tasks, this figure increases to almost one in three with a turnover of 150,000 euros or more. Increasing documentation requirements, tax guidelines and data protection require more and more effort.
The burden also becomes significantly greater when a company hires employees. While solo self-employed people have to spend an average of six hours per week on bureaucratic tasks, companies with employees spend an average of ten hours. However, even among those surveyed with higher sales, seven percent still say that they spend a maximum of one hour a week on bureaucracy, and among the smaller ones it is even one in three.
“It would certainly be helpful if the government thought about how this could be made easier for the self-employed,” emphasized John. A growing number of small entrepreneurs feel that their business activities are restricted by bureaucratic regulations: the figure is now 56 percent, compared to nine percentage points less last year. For the self-employed risk barometer, Infas Quo surveyed 608 small self-employed and freelancers for the second time on behalf of the specialist publication Versicherungsmonitor. A good half of them were solo self-employed without employees. The survey was supported by the insurer Hiscox.
Relief from bureaucracy is therefore at the top of the wish list of self-employed and freelance workers. However, entrepreneurs expect the opposite to happen, namely a worsening of the situation. Three out of four respondents assume that political requirements will result in even more regulation and bureaucracy. This means that the existence of more than one in three people would “definitely” be at risk. The situation is similar when it comes to taxes. Here too, 74 percent fear further increases, which would even threaten the existence of almost a third.
The vast majority would still choose self-employment again
Almost 60 percent of all entrepreneurs also complain about the frequency of new regulations. It is therefore not surprising that many people do not feel well informed about current rules. This is particularly true for small self-employed people with an annual turnover of up to 70,000 euros: just 36 percent of them are sure that they are up to date.
Overall, politics and its behavior have developed into one of the major external risks from a business perspective. She is in fourth place. The list of risks is headed by the fear of further rising costs.
When it comes to threats related to the entrepreneur himself or his business, illness or accidents combined with a longer period of downtime continue to be the number one major risk. Nevertheless, at 39 percent, not even half of those surveyed had taken out an appropriate insurance policy for this eventuality. And the willingness to complete one has actually decreased compared to the previous year.
Despite all the burdens, the vast majority of small business owners, 85 percent, would choose to become self-employed again. The freedom that comes with it is the most frequently mentioned reason. “The past year was a difficult one. Nevertheless, optimism is relatively high,” said Demoskop. Only a minority of 13 percent expect their company’s economic development to deteriorate in the next twelve months, while one in three expect sales to grow.
Many self-employed people also forego insurance in the event of other operational risks such as IT or machine failures or a cyber attack. The main argument is high costs or the belief that there is no need for insurance. The cyber risk in particular is still massively underestimated by small companies, says Infas Quo boss John. “Many people believe that a good computer with a virus program will solve the problem.” This could be true for some tradesmen, but for many other self-employed people their entire work depends on IT. “You have to make that clear to people.”