Set up your own business in 5 steps

Starting a new business in Ireland can seem like a formidable task but by following this simple guide we aim to help you set up your new business in just five easy to follow steps. Of course, there are many factors involved in setting up a new business and this guide serves to outline some of the more important factors for which you should consider.

Step 1: The BIG idea

The first and often the hardest step involved in setting up any business is coming up with an innovative idea. Innovation is defined as creating and introducing something new. So if you have thought of a new process, new design, product or service that has a readily available market, then you could be well on your way to creating your new business start-up.

Step 2: Structure of your business

Once you come up with the idea the next important question to consider is how to structure your business. There are three very different legal structures that you can choose from and whichever one you select will depend on your business activities. You can set up a business as a sole trader, partnership or limited company.

• Sole trader: It is relatively easy to set up as a sole trader and such a structure offers greater flexibility as the trader is not restricted by company law obligations. As a result there will be lower professional costs involved in respect of annual filings and you will only need to complete your annual tax return. The main disadvantage is that there is no limited liability protection and so if your business fails, your personal assets could be used to pay any debts. You must register as a self employed person with the Revenue Commissioners and also register your business name with the Companies Registration Office.
• Partnership: A partnership is typically formed when two or more individuals come together to form a business. Perhaps the partners have a common goal, or realise that their strengths complement each other and so running a business together makes good commercial sense. The partners share responsibility and decision making and as a result get their own share of the profits. The disadvantages however are that if the business fails the partners’ are jointly and personally liable for the debt. A partnership agreement should be carefully drawn up by a solicitor in all cases.
• Limited company: A company is a separate legal entity and therefore the individual owner will be better protected with limited liability. If the company gets into difficulty the creditors of the business will only be able to come after the assets of the company as opposed to the personal assets of the individual. The limited company also offers greater potential for raising finance, trade expansion and future planning. A company will only be taxed on profits and at the much lower rate of corporation tax as opposed to the personal tax payable as a sole trader or partnership. Professional costs will be higher and the company must register and file annual accounts with the Companies Registration Office (CRO).

In many cases a person will commence as a sole trader and then incorporate at a later date. However if large profits are anticipated from the offset it maybe more beneficial to incorporate straight away. Whichever structure you choose make sure that it is right for you and your business activities, it could be the most important decision you ever make.

Step 3: Funding

Funding is arguably one of the most important aspects of running a successful and sustainable business. First you must understand how much money you need to start up and where you are going to source it from. Do you plan to use your own money as an initial investment or make use of other finance options. Depending on the size and future plans of the business you should consider using an accountant or an adviser.

Very important to meet cash commitments and if you have a loan – may require security in form of property or business assets or personal guarantee. Cash is king in a business.

• Business bank account required.
• Understand how much money you need to start-up
• Explore your finance options when starting-up
• Decide if you need an accountant or an adviser
• Understand how to set up a record-keeping system
• Use your own money to start-up
• Raise finance from family and friends
• Raise finance from outside investors or other sources to get started
• Understand the basics of business banking
• Find out what to do if you’re refused finance
• Meet your financial commitments
• Business insurance

Step 4: Tax

Step 5: Business plan

Every business is different and so no one business plan fits all. Business plans can be very complex with over 50 pages but often some of the best plans can be written up on just one A4 page. Download a sample template here...

• SMART goals
• SWOT analysis

What will be your unique selling point? What will give you that competitive advantage and edge over your competitors?

Do you have a dream, want to be your own boss, or work for yourself? Don’t be a sayer, be a doer, go for it and achieve your goals. We all learn from our mistakes and some of the most successful people in the world have learned from their mistakes and made it big as a result. Final line – GO FOR IT!! People who don’t do it regret.