Why this matters
Your location affects costs, jurisdiction, proximity to customers, storage, delivery routes, lease agreements, professional image, and sometimes permits. Especially for a side business in Germany, the best solution is often not the most impressive location, but the one that keeps effort, risk, and costs low.
Turn knowledge into a start plan
This guide explains one topic. Whether it is really a priority for you right now depends on your answers in the start plan.
Create start planA Location Does Not Automatically Mean a Shop or Office
Many side businesses in Germany do not start with a retail space, office, or workshop. A desk at home, a digital setup, a rented storage space, a coworking spot, or working directly at the client's location can be perfectly sufficient depending on your model.
A better starting question is: Where does the actual value creation happen, and what kind of environment do you really need for it? An online shop has different requirements than a florist, a consulting service, a photo studio, or a local repair service.
What matters for your planning: your location is not just a matter of preference. It is connected to costs, jurisdiction, registration, client contact, suppliers, storage, insurance, and potentially required permits.
Check Whether Working from Home Is Really Enough
Working from home can be the easiest starting point for many digital, creative, or consulting-based side businesses. It saves on rent, furnishings, commuting, and ongoing fixed costs.
However, working from home does not automatically mean all business-related questions are resolved. Relevant considerations can include your rental agreement, house rules, client visits, storage, noise, data protection, legal notice (Impressum), separate filing, and the tax treatment of a home office (Arbeitszimmer).
If you store goods, receive clients, process food, use loud machinery, or employ staff, a regular desk at home may not be a clean solution.
External Premises: Weigh the Benefits Against Fixed Costs
An office, studio, storage unit, retail space, or coworking spot can appear more professional and may make certain activities possible in the first place. At the same time, it creates ongoing fixed costs, contracts, commuting, and organisational obligations.
For a side business in Germany, this is a central question: Does the space need to be in place from the start, or can the idea be tested on a smaller scale first? The fewer fixed costs you incur before your first revenue, the easier it is to keep your start manageable.
Coworking or shared workspaces can be a middle ground if you need infrastructure, a professional network, or a business address, but are not yet ready to take on your own commercial unit.
Location Factors Depend on Your Business Model
For local offerings, factors such as accessibility, walk-in traffic, parking, neighbourhood, competition, target audience, and visibility matter more. For online offerings, logistics, storage, shipping routes, returns, internet connectivity, a quiet working environment, and efficient processes may be more important.
For product-heavy ventures, questions around minimum order quantities, storage space, packaging, quality control, and delivery capacity come into play. For service-based businesses, the focus tends to be on client appointments, data protection, travel time, equipment, and professional presentation.
Your location choice should therefore follow from your business model — not from a desire to look like an established company right from the start.
Quick checklist
- Do you need client access, storage, a workshop, a kitchen, an office, or just a quiet place to work?
- Does your rental agreement, house rules, or landlord permit the type of use you are planning?
- Are noise, deliveries, goods storage, or visitor traffic a concern?
- Does the location suit your target audience, suppliers, shipping needs, and working hours?
- Can you financially sustain external premises even if revenue takes time to come in?
- Is coworking, shared space, or renting later a sensible interim solution?
Common mistakes
- Renting premises too early just to make the venture feel more real.
- Assuming that working from home is automatically unproblematic.
- Only thinking about storage, shipping, delivery times, or client visits after registering the business.
- Underestimating fixed costs and unnecessarily raising the break-even threshold.
- Not connecting your location to your registration, insurance, and business model.
What this guide can and cannot do
This guide helps with
- help you assess your venture in terms of home office, external space, storage, client contact, and costs
- formulate location-related questions for your registration, business plan, and operations as a checklist
- help you plan a lean start without unnecessary fixed costs
This guide does not replace
- definitively check whether your rental agreement permits commercial use
- decide individual questions relating to planning law, trade law, or tax
- replace a location analysis based on real market data