Entrepreneurship: Salary and opportunities
What is a typical entrepreneurship salary? In a sense this is a false question. Entrepreneurs are entrepreneurs, so they are responsible for the amount of the salary they receive. However, you could also start your professional life as an employee after completing an entrepreneurship degree. In that case your business entrepreneurship salary will be in line with the market.
In critical business situations, an entrepreneurship salary could be zero euros. In successful times it could rise to several hundred thousand euros a year. However, it’s best to avoid phases without salary, as the company would then drift towards insolvency. Therefore, one should pay oneself at least a salary that covers the cost of living. On the other hand, your salary should not be so large that it suggests a hidden distribution of profits.
A distinction must also be made between managing partners and employed managers: If you run your own company - and there are no co-determining shareholders or silent partners - you are relatively free in deciding your entrepreneurship salary and how to distribute company profits. The prerequisite for this is, of course, that your business is successful and that you know and comply with the legal and tax framework. In a pure employment relationship as CEO, the situation is different. In this case, you must negotiate your business entrepreneurship salary with the owners and investors of the company. For this purpose, you can refer to tables that break down managing director salaries by industry.
How much do you earn after studying entrepreneurship?
As a graduate you can expect your entrepreneurship degree salary to start from 30,000 euros gross per year - roughly enough to cover basic living costs. This is also the amount you can get from a start-up grant. If your start-up has financially strong investors, a managing director's salary of 60-70,000 euros is possible for the founding team. This is comparable to entry-level salaries for consultants, but the amount is highly dependent on negotiation and success. Salaried positions in start-ups are paid very differently, from minimum wage to 40-50,000 euros a year. Part of your entrepreneurship salary can be bonuses and company shares, but sometimes bonus and shareholding models significantly reduce the basic salary. Whether company shares instead of basic salary are a good deal becomes apparent over the years, when the start-up hopefully gains a lot of value.
You can make the most money in salaried positions at large corporations and top consultancies. However, living out one's passion for entrepreneurship is only possible to a limited extent there.
Entrepreneurship salary levels in start-ups
As with all jobs, salaries are subject to numerous factors, and entrepreneurship salary studies are often only a rough approximation. When starting a career with a Bachelor's degree, the salary is at the lower end of the range; with work experience and a Master's degree, it will approach the upper end. With a degree in entrepreneurship - i.e. business studies - the following annual gross salaries are achievable in start-ups:
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Position
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Gross annual salary
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Management
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40.000 – 75.000 euros
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Product management
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35.000 – 60.000 euros
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Finance
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45.000 – 60.000 euros
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Consulting / Advice
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45.000 – 55.000 euros
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Project Management
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35.000 – 55.000 euros
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Marketing Management
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35.000 – 50.000 euros
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Business Development
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35.000 – 50.000 euros
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Key Account Management / Sales
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35.000 – 125.000 euros
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Bonuses for
managers
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5.000 – 15.000 euros
extra
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What business entrepreneurship salary can founders earn?
Are you going to set up your own company after your entrepreneurship studies? If so, you will probably only be able to pay yourself a small salary at the beginning, purely from operational revenues.
Solutions include scholarships, loans and venture capital. Examples of scholarships include the EXIST start-up scholarship, which provides 2,500 euros per month in start-up assistance for living expenses. If you use debt financing or borrowed capital, you can pay yourself a salary from this money. How high could this entrepreneurship salary be? Especially at the beginning, the salary should be low. This will leave as much money as possible in the company and avoid liquidity bottlenecks. Calculate the net value on the basis of your living costs and use it to calculate an employer's gross remuneration. If your investors are financially strong and the business model is promising, a gross entrepreneurial salary of 60-70,000 euros is possible.
After the first full financial year, you may be able to adjust the sum upwards.
As a founder, you may also pay some team members more than you pay yourself. For instance, if you employ expensive software chief developers or sales professionals, their salary requirements can be very high.
Entrepreneurship degree salary in employment positions
After completing a bachelor's or master's degree in entrepreneurship, it is possible to enter the start-up field without starting your own business. In these situations, entrepreneurs take positions at existing companies and learn from founders. The downside is that salary prospects are not particularly lavish. The salary will only rise beyond 70,000 euros when specialist and management tasks are added.
Young start-ups tend to pay lower salaries because they often do not yet generate profits and even turnover is still low. In return, you can learn a lot about growing companies and get directly involved. Basically, the key question to ask yourself is: Do you want to start your own company at some point or would you rather pursue a corporate career?
With an MBA in entrepreneurship salary and promotion prospects are better than with a Bachelor's degree. The exception is your own start-up, as you set your own salary.
Key factors that determine an entrepreneurship salary
In entrepreneurship, a few general rules apply when it comes to salary:
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Work experience is relevant to salary. Internships - or even dual studies - help as arguments when negotiating salaries.
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The amount of the salary depends on the value of the work performance.
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Responsibility for budgets and teams increases the salary.
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Tier 1 companies pay more money. The classic example is the automotive industry: You earn more money at the automobile manufacturer than at a parts supplier.
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Big companies pay more money. Salaries are highest for companies with more than 5,000 employees - unless the company is a medium-sized enterprise with low-margin products.
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Curiously, weekly working hours have little influence on salary. It is possible to work extremely regular hours - and thus have a lot of free time - at a top industrial group and still earn a comparatively high salary.
These entrepreneurship jobs offer the highest starting salaries
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Founder of their own VC-backed start-up
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Consultant with a top consultancy
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Commission-based sales jobs in top start-ups
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Finance professionals in any company
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Intrapreneur with a large corporation
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Top industries pay more money: The chemical, pharmaceutical, financial, electrical, IT, consulting and metal industries, including vehicle manufacturers, pay higher salaries than other industries. Media, logistics and retail companies tend to be at the lower end of the entrepreneurship salary range.
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Especially in corporate groups, there are no real salary negotiation opportunities when starting a career. Instead, you will be placed in a salary grade by the HR department, based on point systems and collective agreements. This is very similar to the civil service.
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In Bavaria, Baden-Württemberg and Hesse, salaries tend to be higher than in the rest of Germany.
What does a CEO earn?
As CEO of your own company, you determine your earnings. Salaried managing directors or board members also negotiate their salary themselves. As a rough rule of thumb, one can say: Contracts as a GmbH managing director in a successful company with an annual gross salary of less than 100,000 euros should be examined very critically. 120,000 to 180,000 euros basic salary is the average fixed salary in Germany. Extra bonuses - i.e. profit sharing - can average between 30,000 and 60,000 euros in good business years. The upper limit accepted by the tax authorities for CEO salaries in Germany is around 600,000 euros, as salaries that are too high can be considered a "hidden distribution of profits".
If you also hold shares in the company, which is normal as an entrepreneur, you will ideally receive additional profit distributions.
Especially with start-ups, however, there are often no profits for years, which is why this salary component does not play a role. The value of the company shares is more important, and hopefully this will multiply over time.
Avoid excessive salary
Whether you call yourself CEO or you are called managing director does not play a role in the maximum salary level. And the maximum salary is important, especially if you hold shares in the company as an entrepreneur. There is a simple reason: Salaries are paid by the company from untaxed profits, but profit distributions to shareholders are subject to corporate income tax and trade tax beforehand. It is therefore in the interest of entrepreneurs - especially managing partners - to set the salary as high as possible.
Attention: Salary includes all components, i.e. also bonuses, the company car, pension commitments and other non-cash benefits.
However, if you do not hold shares in the company, the salary may be higher, as it does not include a hidden profit distribution.
Salaries and starting fees for board members
If your career progresses perfectly and rapidly, you can rise to extremely high salary levels on the executive boards of top corporations. You can even negotiate entry fees there. In addition to fixed salaries and complex, multi-year bonus schemes, high pension entitlements are also common. That can add up to a few million in salary per year. Interestingly, the top ranks of top corporations are rarely occupied by the original founders. Instead, executive positions are filled by employed managers who have often had a straightforward corporate career. Before a corporate career, initial professional steps in consulting are common, but cutting-edge research including a doctorate is also interesting to corporations.
If you look closely at the curricula vitae of corporate board members, you will find that around half of the top managers have an extremely long period of service. Many enter company service during their studies via an internship. At CBS we place great value on internships during our study programmes - or directly after degree studies in a trainee programme.
In comparison: Business Consultant Salary
At top consultancies, a gross annual salary of around 70,000 euros is possible, plus additional benefits and bonuses that can bring the total close to 100,000 euros. The workload is high and can be almost at Entrepreneur level, but it comes with the reassurance of a fixed salary. After the first few years of employment, you will continue with an annual gross salary of around 100,000 euros plus bonuses, etc. At the Partner career level, salaries are highly performance-related.
Career opportunities after the entrepreneurship degree programme
After an entrepreneurship degree, many different career opportunities are open to you. You can find out which professions are possible and what you can expect in which job in our article on entrepreneurship professions.
Conclusion
After an entrepreneurship degree, salary levels will be determined by many variables. In an employment relationship, you will gradually learn to bear entrepreneurial responsibility. The entrepreneurship salary can be quite attractive in these roles. However, you are also strongly bound by instructions, which does not fit in with the true entrepreneurship spirit. If you start your own business, you will enjoy much more freedom. For that, you have to work for your entrepreneurial successes yourself. This can be very lucrative, whether you want to keep your business or seek an exit.
Are you looking for a suitable course of study? CBS offers numerous options for the Entrepreneurship degree programme, as a Bachelor's and Master's degree, in English and German, full-time, dual and part-time.
