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Well over one million creative people live in Germany, in Berlin there are over 200,000, at least that is what the statistics show. Creative work, well and good. But who thinks about pensions and who fights for fair pay? This is where SMartDe eG from Berlin-Kreuzberg comes in. As a cooperative, it insures its members, writes invoices for the self-employed and even insures creative people in case the client doesn't pay. How does SMart work exactly? Who can take advantage of it and does the model really only bring benefits?
CCB Magazine: Hello, Magdalena Ziomek and Henrietta Mehlis, you founded SMart five years ago. How would you explain SMart to someone who has never heard of it before?
Magdalena Ziomek: SMart is a Europe-wide network that aims to improve the working conditions of self-employed people. Our network currently consists of SMart offices in nine countries: Belgium, France, Spain, Italy, the Netherlands, Sweden, Austria, Hungary and Germany. We see ourselves as a joint venture with the purpose of the economic promotion of its members.
CCB Magazine: And how exactly does SMart work?
Henrietta Mehlis: You become a member of our cooperative. Then you have the opportunity to carry out assignments on behalf of the cooperative and to choose between two work models: on a fee basis or in employment. The problem that creative people often have today is that they have to choose between different forms of work and also different types of assignment. We solve this problem: While the member is still responsible for agreeing the assignment with the client and providing the services, SMartDe eG takes over the financial liability and administrative handling of the assignment. After completion of the order, SMartDe eG invoices the customer for the service, and we then also take care of the travel expenses, reimbursement of expenses and, under certain circumstances, the dunning process. Within seven working days the member will receive his fee payment. Some members are also employed by SMartDe eG on a social security basis or on a part-time basis and are committed to a monthly volume of work. Should a member decide to be employed, SMartDe eG will pay social security contributions, wage tax and any flat-rate taxes and pay the member a monthly salary.
Often the organizers abroad do not accept the invoices of freelancers. But if you are a member of SMart, you have the necessary legal form here and can play at festivals around the world without any problems
CCB Magazine: Can you bring examples of members and processes? Who exactly comes to you? How do the processes work? And what do you get at the end?
Henrietta Mehlis: An example: Imagine that you have been working as a small business owner for a long time and almost every year you are faced with the same problem that you would exceed the 17,500 € small business limit due to larger orders - which is actually good. But it's a disadvantage if the people you work for are not subject to VAT and therefore cannot or do not want to pay out the VAT. This is where we come in: For this job we would hire you through the cooperative, the problem would be solved at least in this case. Another example is the festival area. Many are booked abroad in this area. But often the organizers don't accept your bills as a freelancer, the trip might even fall through. If you are a member of SMart, you have the necessary legal form and can play at festivals around the world without any problems. A third example is a general problem: the lack of time. Many creative people today have trouble getting everything under one roof. Many are burdened by this. We help here as well. We write the bills to your clients and hire you, so you have affordable social security. Basically, you have more peace and more time to carry out your projects and expand your customer base.
CCB Magazine: However, membership costs money, and as a creative person you have to raise that money first. How much is an SMart membership?
Magdalena Ziomek: Whoever wants to become a member must buy at least one cooperative share. One share currently costs 50 EUR. There is no monthly membership fee. The cooperative fee is only due when the member executes orders on behalf of SMartDe eG. The cooperative fee is seven percent of the net invoice amount. The member uses all administrative and consulting services of the cooperative: Members can access the European-wide SMart community, network and find project partners. In addition, the member receives a payment guarantee for orders invoiced by the cooperative in the event of insolvency on the part of the customer.
CCB Magazine: How many members do you have now? And from which branches do they come?
Magdalena Ziomek: Europe-wide the SMart network has today over 95.000 members. SMartDe eG is the youngest network partner and currently has 280 members. Since mid-2017, an average of two new self-employed people have joined SMartDe eG every week. In the first fiscal year SMartDe supported - similar to SMartBe - mainly self-employed people from the art and creative industries: dancers, musicians, authors, installation artists. Today, the cooperative also includes other professional fields, including designers, software developers, communication trainers, moderators, translators, music producers, marketing consultants, doulas, sound engineers and many more.
CCB Magazine:Are there creative people that you do not take in? For example, who do not earn enough money? It would hardly be worth it for you to record someone who earns only 300 euros a year, for example.
Henrietta Mehlis: For us the question always arises whether it's worthwhile for the creative person. However, we clarify any further questions during the first personal meeting. There are members who only have a project once a year and only use the administrative or consulting services of the cooperative for this. Other members submit new projects every month. Many of our members are at the beginning of their career, so their sales are still low and irregular. Our aim is to stabilize financially through the SMartDe cooperative. And practice shows that over time our members become more and more successful and generate more revenue.
CCB Magazine: Don't you basically fill a gap? Doesn't SMart primarily take over tasks that the state actually has to do? Isn't it sad that society needs models like SMart at all?
Magdalena Ziomek: I would put it more like this: The challenge lies in the fact that the group of self-employed people is very heterogeneous. This makes it difficult to find a solution for all of them. In addition, the world of work today is undergoing major changes. From many years of experience and observation, we know the needs of the self-employed and can offer individual, solution-oriented options and services. And yes, with this we definitely close a gap.
Getting a permanent position through SMart can be really beneficial for self-employed people in certain situations. In the case of an employment relationship, you are then covered by five social insurance schemes
CCB Magazine: The changes also mean that the number of self-employed has been increasing for years. It has doubled in Germany in the last two years, currently there are over two million, the creative industries are particularly affected. In Berlin meanwhile nearly each second is solo-self-employed. Via SMart you can also get a permanent position. How does that work? What are the advantages?
Henrietta Mehlis: Yes, you can also be hired through SMartDe eG. This can be really advantageous for self-employed people in certain situations. For example, in the case of an employment relationship, you are covered by all five social insurances: health, nursing care, pension, unemployment and accident insurance. Members are also free to choose with which statutory health insurance they want to be with, the pension payments are paid to the German Pension Insurance Federation. A1 forms can be requested for assignments abroad. Social security contributions for salaried employees are also lower and members can also pay into the pension insurance.
CCB Magazine: Do you see models like SMart as solution models of the future? The working relationships of creative professionals are characterized by discontinuities, breaks, highs and lows and often simply precarious employment. Can cooperative models solve these problems?
Magdalena Ziomek: To some extent, yes. Cooperatives are generally regarded as a very insolvency-proof legal form. This is due on the one hand to the internal control function of the supervisory board and on the other hand to the obligation of each eG to have itself audited at least every two years by an external auditing association with regard to the economic circumstances and the regularity of the management. SMartDe eG is audited by the PdK e.V. In addition, SMartDe eG is supported and advised by the auditing company AWADO in terms of tax and labor law. In any case, the SMart model is economically viable, which is clearly demonstrated by the 20th anniversary of SMartBe and the 8th anniversary of SMartFr and the constant growth of the other SMart countries. Which is basically an added value: For a large part of the self-employed, having a contact person in the SMart office for professional questions is one of the biggest advantages.
CCB Magazine: How do you finance yourselves?
Henrietta Mehlis: SMartDe eG has share capital through the sale of shares and is financed by the orders that our members execute on behalf of the cooperative. Currently, seven percent of the net invoice amount of the orders is used to cover the administrative costs in the two SMart offices in Berlin and Bremen. The remaining 93 percent is available solely for financing and implementing the orders. The joint venture SMartDe eG reinvests all profits completely in the development of new services and offers.
CCB Magazine: When you look into the future: What is your long-term goal?
Magdalena Ziomek: We want to expand the network. The larger and more revenue-generating we become, the more services and offers we can make available to each individual member. The SMart-Network is a valuable association of imaginative, energetic and enthusiastic people. And we want to support even more self-employed people in Europe and beyond so that as many as possible can benefit from SMart's services.
Here there is all information to SMart: https://smart-eg.de/, or also directly under 030 2433 6740 and firstname.lastname@example.org.
Category: Knowledge & Analysis
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