Starting a social media agency with a colleague: What are the real startup costs?

We set up a UG in Hamburg last year with this exact structure. Notary and register was 950 EUR, lawyer contract bundle was 800 EUR, liability insurance was 480 EUR upfront. Paid the accountant 500 EUR the first month for initial onboarding. That means 2,730 EUR flew out the door before we even wrote a single word for a client, not counting hardware.

Whatever you do, don't go for a GbR just to cut costs. In social media agencies, the risks of copyright infringement, wasted ad spend due to bad targeting, or DSGVO violations are very high. Setting up a UG right from the start and biting the bullet on the notary fees will protect your personal assets and save you in the long run.

Don't buy the top-tier plans for expensive agency tools in the first three months. The basic tiers are more than enough for scheduling posts, analytics and design. As long as you two co-founders don't draw salaries until you issue your first invoice, that 12.000 EUR will easily keep you afloat for at least 8 months.

12.000 EUR looks like enough on paper, but corporate clients in Germany rarely pay before 45 days. If you can't land a client in the first 3 months and the one you find in month four takes 60 days to pay the invoice, your cash flow could hit zero by month five. Nail down your sales plan before worrying about the budget.

Congrats, great move. The most critical thing when splitting expenses is having a shared spending card. Instead of tracking who paid for what in the beginning deposit the money upfront into a joint business account and run every software subscription exclusively through that. Partnerships usually fall apart not over big money but over little, nontransparent expenses.

How is the division of labor set up in your partnership agreement? If one of you is doing sales and bringing in clients while the other handles operations, will you still split costs and profits 50/50 if the client pipeline dries up? Have you put this in writing from the get-go, just like the financial costs?

Whatever you do, don't copy-paste client contracts and data privacy (DSGVO) documents off the internet; paying 600 EUR to a solid agency lawyer now will prevent thousands of euros in fines later.

I have a question, don't want to go off-topic though. Trying to do this alone is the most expensive way.

When making decisions, write down the worst-case scenario too, not just the best. Good luck with that.

I didn't know that.

It's rare to find an explanation this clear.

Exactly like that. Are you looking for a partner or a co-founder? They are two different things.

Of course, it varies if your situation is different.

Yes, that's exactly how it is with cost of starting a social media agency. If decision-making authority isn't defined, it causes daily issues not just during exits.

Just because everyone does it doesn't mean it's right. I'm also curious if anyone does it differently.

I agree.

There's a trap here, let me mention it. Just because everyone does it doesn't mean it's right.

Valuation methods for exits must be defined by formula; "market value" isn't enough. If I were you, I'd go this route.

My perspective changed after experiencing that. Valuation methods for exits must be defined by formula; "market value" isn't enough.

If you post the result here it will help others too.

Correct in theory, but it doesn't work that way in practice. Start with a small trial; don't commit to everything at once.

That's all, sorry if I went on too long.

here's how it went for us.. but are you looking for a partner or a co-founder? tbh they are two different things.

hope this helps.

Three different views emerged, they all complement each other. Valuation methods for exits must be defined by formula; "market value" isn't enough.

When you try to change everything at once, nothing settles. That's all, sorry if I went on too long.