Entrepreneurial activity in Germany showed an upturn last year, according to a preliminary analysis from the KfW development bank’s founding monitor. The intensity of starting a business rose from 115 to 136 new businesses per 10,000 people aged 18 to 64. When adjusted for the population in this age bracket, this equates to approximately 690,000 founders, up from 585,000 in the previous year.
This positive trend was largely driven by side income ventures. The intensity of starting a business on a part-time basis increased from 75 to 95 per 10,000 people compared to the previous year. This represents roughly 483,000 side-income businesses in 2025, compared to 382,000 the year before. In contrast, the intensity for full-time ventures saw little change, remaining at 41 per 10,000 people, marking the third consecutive year of stability. This figure equates to around 206,000 full-time businesses starting in 2025. Due to these differing developments, the share of side-income businesses among all new ventures rose to an unprecedented 70 percent last year.
The primary motivation cited by people for starting a side-income venture is the desire to generate additional income. Dirk Schumacher, Chief Economist at the KfW, stated, “A potential reason for the sharp increase in side-income founding activity is the rising cost of living. Accessing the job market has become more difficult, and even small side jobs are no longer easy to find. Self-employment can therefore be an alternative for earning supplementary income”.
A majority of founders in Germany prefer to be self-employed out of conviction. Two-thirds of new entrepreneurs generally favor self-employment over traditional employment. While the proportion of side-income ventures is lower than full-time ventures, it still represents a clear majority-and even an increase from the previous year.
Regarding the nature of the new businesses, 24 percent of the new ventures were established by employed individuals. Sole proprietorships involving only one person dominated with 86 percent, compared to team-founded companies. Furthermore, the majority of these businesses were brand new creations, meaning they were established legally and organizationally for the first time; only ten percent of the new ventures were formed through the acquisition of existing assets.