Anyone who wants to become self-employed in a trade usually needs a master craftsperson certificate. However, it is possible to start a business without a master’s degree. In this article, you will learn what prerequisites tradespeople must meet to establish their own business and in which cases a craft business can be established without a master craftsman’s certificate. We will also discuss the pros and cons of working for yourself without a master craftsman’s license and give tips on how Stripe can help with administrative tasks.
What’s in this article?
- What requirements must tradespeople meet to set up their own business?
- In which cases can a business in the trades be founded without a master craftsman’s certificate?
- Advantages and disadvantages of being self-employed without a master craftsman’s certificate
- How can Stripe help self-employed people without a master craftsman’s certificate?
What requirements must tradespeople meet to set up their own business?
Tradespeople who want to become self-employed with their own business need to fulfill certain legal, personal, and professional requirements.
From a legal standpoint, registration with authorities such as the trade office, the tax office, and the professional association is required. It is also necessary to comply with contract and employment law and, in particular, health and safety regulations. It is also advisable to take out select insurance policies. Business liability insurance protects handicraft businesses from high liability costs in the event of damage. It is especially useful when there is an increased risk of harm to people, property, or the environment, such as in construction, electrical work, or work on water or gas lines. Self-employed tradespeople need to also consider legal expenses insurance to protect themselves financially in the event of a legal dispute.
In addition to numerous personal skills such as flexibility, resilience, assertiveness, willingness to take risks, organizational talent, and communication skills, self-employed tradespeople also need to have technical skills. Anyone who runs their own business needs commercial knowledge, among other expertise, because it involves writing quotes and invoices, calculating costs and managing budgets, paying taxes, and keeping the books in accordance with the principles of proper accounting (GoBD).
However, the basis for someone to run their own business is first and foremost mastery of their craft. The foundation is a solid apprenticeship, but for many trades, vocational training alone is not enough to start your own business—a master craftsman’s certificate is also required.
What is a master craftsman’s certificate?
A master craftsman’s certificate is an official document that certifies the successful completion of a master examination in a skilled trade. It is awarded by the Chamber of Crafts and is considered the highest qualification in the sector. The master craftsman’s certificate confirms an individual has comprehensive technical, vocational, and business management knowledge, practical experience, and the ability to run their own business.
A master’s certificate is awarded upon successful completion of a master’s examination. This is usually preceded by one to two years of training at a master craftsman school or similar educational institution. In addition to qualified vocational training in a trade and several years of work experience, some chambers of trade also require a minimum age, special proof of specialized knowledge, or both to become a master craftsperson.
In which cases can a business in the trades be founded without a master craftsman’s certificate?
The German Trade and Crafts Code divides the more than 130 professional activities into occupations that require a license, occupations that do not require a license, and occupations that are similar to crafts.
Activities that require a license with a master craftsperson certificate
Trades that require a license typically require a master craftsperson certificate to start a business because special quality standards and safety requirements apply to them. The professions that require a license are listed in Appendix A of the Trade and Crafts Code. These include:
- Automotive technicians
- Bakers
- Body and vehicle builders
- Bricklayers and concrete workers
- Butchers
- Carpenters
- Chimney sweeps
- Dental technicians
- Electrical engineers
- Glaziers
- Hairdressers
- Information technology specialists
- Metalworkers
- Opticians
- Painters and varnishers
- Plumbers
- Road builders
- Roofers
- Scaffolders
- Stove and air heating engineers
License-free professions without a master craftsperson certificate
Trades that do not require a license do not require a master craftsperson certificate to start a business because these are activities from artistic and creative fields or activities in which safety aspects play a less important role than in trades that require a license. Appendix B, Section 1 of the Trade and Crafts Code lists the crafts that can be practiced without a license. These include:
- Beauticians
- Bookbinders
- Building cleaners
- Ceramicists
- Engravers
- Glass and porcelain painters
- Luthiers
- Metal sculptors
- Metalworkers
- Milliners
- Photographers
- Precision opticians
- Precision tool mechanics
- Sailmakers
- Shoemakers
- Tailors
- Textile cleaners
- Undertakers
- Watchmakers
- Wood sculptors
Craft-like activities without a master craftsperson certificate
Craft-like professions can also be practiced independently without a master craftsman’s certificate. Appendix B, Section 2 of the Trade and Crafts Code lists the craft-like trades, including:
- Art stuffers
- Brush and paintbrush makers
- Cable installers in building construction (without connection work)
- Carpet cleaners
- Concrete drillers and cutters
- Fabric painters
- Floor layers
- Iron weavers
- Jointers in building construction
- Makeup artists
- Metal grinders and metal polishers
- Muldenhauers
- Piano tuners
- Pipe and sewer cleaners
- Shoemakers
- Tanners
- Theater and set painters
- Theater costume makers
- Watchmakers
- Wooden hoop makers
Without a master craftsman’s certificate but with professional experience: the old journeyman’s regulation
In certain cases, the Trade and Crafts Code lets people start a business in licensed trades without having a master craftsman’s certificate. One such case is the old journeyman’s regulation (HwO Section 7b), which means tradespeople can start their own business without a master craftsman’s certificate if they have passed the journeyman’s examination and have at least six years of professional experience. They must have worked in a managerial position for at least four years. If extensive technical and commercial knowledge can also be demonstrated, the individual receives an authorization to practice.
A license to practice might be granted if the individual can compensate for the lack of a master craftsperson’s certificate with other training. The same applies if they can prove the training for a master craftsperson’s diploma and the master craftsperson’s examination represent an unreasonable burden at the time of application and in the future. In these cases, the professional experience requirements of HwO Section 7b must still be met.
Takeover of an existing business
A tradesperson can take over an existing business and run it without a master craftsperson’s certificate. Often, businesses in the trades are passed on to employees with many years of professional experience. In this case, professional experience replaces the title of master.
Operations managers with a master craftsman’s certificate
Anyone who wants to start their own business without a master craftsperson certificate can also employ a technical operations manager with a master title. Their expertise is sufficient for the Chamber of Crafts to approve the establishment of the business.
Recognition of professional qualifications from other countries
According to Section 9 of the HwO, individuals who are not European Union (EU) citizens and who cannot present a master craftsperson certificate from the German Chamber of Crafts are entitled to set up a craft business in Germany. The prerequisite is a certificate from their home country with which they can prove their professional qualifications in a specific trade. They also receive a right to exercise their profession.
Advantages and disadvantages of being self-employed without a master craftsman’s certificate
Being self-employed in a trade without a master craftsman’s certificate has advantages and disadvantages. The most important points are summarized below.
Advantages
- Easier access to self-employment: Tradespeople can start their own business more quickly without a master craftsman’s certificate. The possibility of founding your own business on the basis of a right to exercise a trade eliminates a major entry barrier.
- Time and cost savings: Those who do not undertake the master training process save time that would otherwise be spent on education and money. Depending on the trade, training costs range from €4,000 to €9,000. In addition, there are examination fees and travel and accommodation costs.
- Greater flexibility in the business model: The elimination of the master craftsman requirement opens a wide range of career opportunities for individuals without a master craftsman certification. This flexibility lets them enter new markets, explore niche markets, and provide specialized services without being limited by formal master requirements. They can also more easily respond to current market developments.
Disadvantages
- Lack of recognition: The master craftsman’s certificate serves as recognized proof of high technical and entrepreneurial competence. Without this title, a tradesperson can find it more difficult to gain the trust of customers and business partners.
- Competitive disadvantages: In some industries, a master craftsman’s certificate is synonymous with high-quality standards. This can be a disadvantage in attracting customers when compared with competitors who have a certificate.
- Limited training opportunities: In many skilled trades, the master title is a prerequisite for the training of young employees. As a result, people without a master certificate cannot train apprentices in the relevant trades.
Advantages and disadvantages of self-employment in the trades without a master craftsman’s certificate
Advantages
|
Disadvantages
|
---|---|
Easier access to self-employment | Lack of recognition |
Time and cost savings | Competitive disadvantages |
Greater flexibility in the business model | Limited training opportunities |
How can Stripe help self-employed people without a master craftsman’s certificate?
Tradespeople who are self-employed without a master’s certificate face the same challenges in managing their business as their counterparts who are master’s certified. This includes administrative tasks. Stripe can help in many ways.
Instead of creating each invoice manually and sending it individually, you can digitize your processes. Stripe Invoicing automates the creation and sending of invoices. This saves you a lot of time, which you can instead spend on orders from customers. In addition, recurring invoicing is possible with Stripe Billing.
You can also fine-tune your payment transactions digitally: With Stripe Payments, you can offer your customers more than 100 payment options and accept and manage all payments quickly and easily. Digitizing your payment processes lets your customers pay in the way they prefer.
Your customers can also pay for your services directly on site with Stripe: With Stripe Terminal, you can process payments quickly and easily with an iPhone or Android device with Tap to Pay. You can also use a precertified card reader such as the Stripe Reader S700 or a mobile device such as the BBPOS WisePad 3. This way, you will receive payment as quickly as possible and all transactions will automatically be transferred to your accounting systems.
With Stripe Revenue Recognition, you also get a quick and comprehensive overview of all sales. In addition, it is possible to post transactions periodically or automate sales reports.
El contenido de este artículo tiene solo fines informativos y educativos generales y no debe interpretarse como asesoramiento legal o fiscal. Stripe no garantiza la exactitud, la integridad, la adecuación o la vigencia de la información incluida en el artículo. Debes procurar el asesoramiento de un abogado o un contador competente con licencia para ejercer en tu jurisdicción si deseas obtener asistencia para tu situación particular.