Everybody would like to be their own boss, but like everything in life there are pros and cons to being self-employed.
On the plus side, you are totally in charge of your destiny as a self-employed person and you can organise your own hours. But on the minus side, a lot of the securities you enjoyed as an employee are no longer there and the onus is on you to ensure there is a regular income.
Many people in a variety of professions are self-employed, ranging from plumbers and construction players to lawyers, journalists, software engineers, designers, PR and marketing professionals and more.
Pros of being self-employed:
You create your own success and can potentially enjoy true job satisfaction
You have more independence to do what you want to do and where you work too
You can choose your own working hours and ideally enjoy a better work/life balance
You can play to your strengths and make the most of your skills
You will have the authority to develop and shape the direction of your business as it grows
Cons of being self-employed:
You are responsible, the buck stops with you
You will most likely deal with increased levels of stress because you are responsible for the success or failure of the firm
You won’t have paid holidays or sick pay and initially, starting out, you could earn less
You will need to be your own motivation engine and at times will feel isolated and lonely
You will have to be your own financial controller, responsible for filing tax returns and paying into your own pension
Getting started
Not deterred and still reading? Good. When you start a business, you can do so as a sole trader, in partnership or as a limited company.
When you embark on starting your own business it is first of all very important to validate your idea by studying the market. You then need to write a compelling business plan and register your business via Companies Registration Office( CRO), click here
A good starting point is to contact your Local Enterprise Office. Ireland’s network of Local Enterprise Offices (LEOs) are a valuable and useful resource to set you in the direction of starting-up. LEOs offer a range of financial and business supports as well as a range of training and events to equip you with the knowledge and skills you might need. To find your Local Enterprise Office, click here
If you are unemployed you may be eligible for the Back to Work Enterprise Allowance (BTWEA) or the Short-Term Enterprise Allowance (STEA). If you are starting a business, you also may get extra supports under these schemes, such as grants for training, market research and business plans as well as access to loans to buy equipment.
Work with your bank
It is practical sense to set up a business account with your bank. This allows you to keep your business income separate from your personal income. In general, you will need your Certificate of Business Name (more on this below) to open a business bank account.
It is a fact of business life that at some stage, whether starting out or growing and scaling, you will need to access capital for your business. There are three ways to finance your business – through debt finance, cash and through equity.
To borrow from a bank is a form of debt finance. The golden rule is to match the type of finance (short term-or long-term) to the intended business need.
Short term finance includes overdrafts, invoice discounting1 and business credit cards.
Long-term finance includes asset finance2, term loans and finance under the Credit Guarantee Scheme3 if your business has been impacted by the Covid-19 pandemic.
Next steps:
Calculate how much you can borrow
Steps to becoming a sole trader
Get your business name
You may carry on your business using your own name. If you wish to use a business name you must register your business name with the Companies Registration Office using Form RBN1 (pdf) or online using CORE (Companies Online Registration Environment). You will then be issued with a Certificate of Business Name which you must display prominently at your place of business. There is an information leaflet on registering a business name (pdf).
Get a domain name for your website and email address
Your website is often the first port of call a customer makes to your business and it is a good way to both drum up business but crucially present your business in a way that you want the world to see it.
Register your business’s domain name through bodies like the IE Domain Registry or the myriad of hosting providers that exist.
Hire an accountant to manage your tax and PRSI
As a self-employed individual you pay tax under the self-assessment system. You pay Preliminary Tax (an estimate of tax due) on or before 31 October each year and make a tax return not later than 31 October following the end of the tax year. You pay the Universal Social Charge directly to Revenue when you make your annual tax return
You must keep proper records to allow you to fill out your annual tax return. To keep all of this streamlined it is useful to employ an accountant to manage your books and make your submissions to Revenue.
All self-employed people must keep receipts and records of all purchases as well as all amounts received and paid out.
To set up as a sole trader you must register for income tax with Revenue as a self-employed sole trader. You do this using Revenue’s online service. You will receive a “Notice of Registration” confirming that you are registered for income tax and, if applicable, for VAT.
So, is being self-employed for you?
If you have a valuable skillset or range of professional expertise that you are confident you could derive an income from and perhaps grow to employ others, then it is certainly a worthwhile pursuit.
As the owner of the business you call the shots and define the direction of the company. You can derive the satisfaction of seeing it blossom.
On the other hand, as owner you are responsible for ensuring the business is run correctly, that you keep sufficient cash reserves and pay your employees as well as suppliers on time.
It is a tall order, but if you do it right and work hard you have everything to gain. And you can enjoy the satisfaction and reap the rewards.
Terms and conditions apply to Business Current Accounts.
Level of security required and rate applicable, will be determined by the amount, purpose & term of facility, in conjunction with the nature and value of the security being offered.
Lending criteria, terms and conditions apply. Over 18’s only. Bank of Ireland is regulated by the Central Bank of Ireland.
Some of our content has been provided by third party providers. As such, Bank of Ireland expresses no representation or warranty as to the accuracy of such content and accepts no responsibility whatsoever for any loss or damage caused by any act or omission taken as a result of the information contained therein.
Finance is provided by Bank of Ireland Finance. Bank of Ireland Finance is a registered business name of Bank of Ireland.
Please note that the provision of this product or service does not require licensing, authorisation, or registration with the Central Bank of Ireland and, as a result, it is not covered by the Central Bank’s requirements designed to protect consumers or by a statutory compensation scheme.
The Credit Provider is Bank of Ireland, trading as Bank of Ireland Finance.
Scheme eligibility criteria will apply. All applications will undergo credit assessment and further information may be required. A guarantee premium, payable to the government, will apply.
