Business plan tips for your Hungarian freelancing visa

This guide and list of tips is to help you to create a robust business plan with the objective of applying for the Hungarian freelancing visa, which by the way is officially called: Residence Permit for the Pursuit of Gainful Activity in the website of the immigration office in Hungary. Nonetheless, the business plan will not only help you for the application, but also for instance when getting funds from a bank, or when negotiating with partners or investors. Coming back to the application to the freelancing visa, the business plan really needs to be robust, it is a crucial factor for you to be granted with the permit.

Note: although I will write some additional guidance on the permit, this article is about the business plan due to its importance. For a guide about the permit itself please see here: Hungarian Freelance Residence Permit or Freelance Visa.

What is a business plan?

A business plan helps you to organize and forecast your project step by step. It is crucial if you want to convince someone regarding your business idea such as banks, the immigration office, or an investor.

In other words, it is a very useful tool to organize your business idea through the different parts or fundamental pillars required for it to succeed.

Although there are indeed many formats of business plans, one of the most famous templates is the business canvas. Canvases can give us a practical and simple interface that will facilitate group discussion and and try new ideas or business models.

What should it include?

The following is a list of sections and specific points that you will need to include in your business plan in order to successfully apply for your freelancing visa or residence permit.

At a general level, you will have to prepare a business profile by gathering all your relevant personal documents with which you intend to convince the immigration office that your business is attractive for Hungary.

 Before you start, you should ask yourself the following questions:

• What is my offer‘s unique selling proposition?
• What are my professional and entrepreneurial skills?
• Who is my target market?
• Who are my competitors? 
• What is the company organisation, including its legal structure?
• Does my business plan include a financial plan with figures and equity requirement, liquidity, profitability and financing?
• Does my business plan list the most important financial statements?
• How my business is contributing to the country and why it should be located in Hungary?
• Can third parties easily understand my business plan? Are all the data and figures realistic? 
• Do I have the documents needed to prove my expertise as well as future customers, operations or costs?

After answering these questions, we can start with the preparation of the business plan. The following are the key points to keep in mind:

Characteristics of the business project

This section is about a short introduction on your business idea.

You should describe exactly what the business is about, how the services will be provided or the product will be sold, personal motivations for starting the business, vision, mission, etc.

People in charge of the project (team)

Here you should talk about who will be in charge of the business, either you as an individual entrepreneur, or the other founding partners in case of a joint venture.

Who will run the business and what will each partner do?

Academic qualification and experience

In this section you can prepare a short introduction of your Academic information. You need to demonstrate that the people or the person in charge of the project has the necessary qualifications and experience to execute your business idea.

You will have to mention your professional background and attach a CV, in which you emphasize the experience or academic formation related to the business that you will try to develop in Hungary.

What to do in cases in which you do not have sufficient experience or academic qualification to validate ? We propose 2 solutions, because in this case:

1. Look for experienced partners. If you had the idea of starting a business individually but lack the necessary knowledge, it would be a very good idea to look for another partner who does have that knowledge.
2. Undertake related training, either postgraduate or master’s degrees.

Product or service analysis

The next step is to conduct a slightly more detailed analysis of the products or services you will bring to the Hungarian market as a freelancer.

This also includes who the end consumer is and the characteristics of the value proposition you will provide through your offering.

Execution and logistics

How will you run your business idea on a day-to-day basis? What are the internal processes and operations needed to run it smoothly? 

You should detail, for example, whether you will have an office or work from home,  whether you need a license, how you will deliver your products to the customer in case you sell online, how you will get in touch with your customers, etc.

Target market analysis

Here you should identify the main competitors and analyse the specific geographic area or target market in which the services or products will be offered. Also, please describe how your business fits into the current characteristics of the market.

Commercial plan

Here you must answer the question: What will you do to attract clients and market your products?

The answer, therefore, includes your marketing and sales strategy. This can involve the use of search engine optimization (SEO), social media, affiliate programs, etc. Whatever your customer acquisition channel is, it should be detailed.

In case you need to outsource or hire professionals to develop, for example, your brand image, you would also include it here.

Initial investment

Any business needs a minimum amount of start-up capital to finance its initial fixed and operational costs. How much will it be in your case? 

In this section you must define the capital you will need, as a minimum, to get the business running. In other words, you need to show the officials that you have enough capital, materials or equipment to start the business. We recommend that you keep the invoices of expenses of any equipment or material you have purchased and that is related in some way to your activity. For example cell phones, laptops, software, etc.

Financing

What will be your external sources of financing? If you are going to ask for a loan initially, you will have to detail the amount and the entity that will grant it.

Profitability forecast

This is undoubtedly one of the most important sections, as it will be used to determine the viability of the proposed business.

You should include a 5-year projection of the expected results (income and expenses). Try not to underestimate the costs or tend to define a very high income; especially in the first year.

In order to prove that you will have clients, you’ll also need to provide a collaboration agreement or letters of intent from at least three clients who are willing to pay for your services, specially located in Hungary. 

Annexes

Finally, the last section is the annexes. In the annexes, you must include all the documents that you have been mentioning through out the business plan, which validate and verify the provided information , such as:

• Copy of academic degrees
• CV or portfolio
• Copy of lease of the premises in case you have one for your activity or letter from the landlord authorizing you to exercise gainful activity in your flat.
• Self-employed registration if applicable
• Bank certificate with necessary investment to start an activity
• Letters of interest, contracts, invoices that support the income analysis.

I got to the end of this guide. If you feel you need help with all this, I recommend you to reach to Juliana of JCE who has been through the process herself and later on has helped others as well.

Sponsored content, collaboration with JCE consultancy.