Sole Traders

Huggles

Hi everyone,

So I have bitten the bullet and decided to get set up as a sole trader and see how I get on for a few months.

What are the steps I must take? Roughly how much cash should I have behind me to set up?

Any help appreciated

Thanks

Huggles

Woodgate

Huggles wrote: »

Roughly how much cash should I have behind me to set up?

What you are going to do will have an impact on the funding you need. Please give more information so people can give you proper advice.

seamus

Huggles wrote: »

What are the steps I must take? Roughly how much cash should I have behind me to set up?

As said, this depends on what you're doing, but the main factors which will affect it are, how much money you will take for yourself (to live on like), how much you expect to earn in your first two years (noting that most businesses make a loss in these years), and how long you plan to stick at it until you make a profit.

Work out your business's expected income. Be pessimistic.

Then work out the following costs:

1. Your salary + your income tax & PRSI (you'll need to pay into it yourself).
2. Business running costs (light, heat, phones, advertising, rent, etc)
3. One-off costs - computers, vehicles, plant, etc.
4. Tax payable on the above business income.

Whatever your deficit is, double it and take that as the minimum you'll need to survive your first year.

Huggles

Thanks

Well i am a web designer, developer and I really have no clue how much I will be taking in a year I am basically going to try this for awhile to see if I can do it really. I have about 10 clients at the moment and the work they give me can vary greatly month to month, id just like to legitimise it all and try and develop it further.

I won't have any overheads insofar as light and heat and stuff as I will be working from home.

EDIT computers and equipment is bought and paid for

EDIT 2 I guess when I asked about funding I was meaning more like, CRO fees, and accountancy fees etc.

Thanks again

snellers

I know you don;t need to hear this Huggles but are you 100% sure of going sole trader if you haven;t already thought of these things already? - it isn;t something to enter lightly unless you have plenty of capital (or work already sorted) - as detailed above there are plenty of factors to work out

only suggestion I can give is get yourself an accountant from day one (unless you are hot at managing your own accounts) - the cost of a decent accountant IMO is well worth it.....takes the pressure off you and allows you to concentrate on making money!

Huggles

snellers wrote: »

I know you don;t need to hear this Huggles but are you 100% sure of going sole trader if you haven;t already thought of these things already? - it isn;t something to enter lightly unless you have plenty of capital (or work already sorted) - as detailed above there are plenty of factors to work out

only suggestion I can give is get yourself an accountant from day one (unless you are hot at managing your own accounts) - the cost of a decent accountant IMO is well worth it.....takes the pressure off you and allows you to concentrate on making money!

Yeah I have definitely thought it through, in terms of contacts I hit a gold mine with a few small agencies that prefer to use a freelancer rather than a full time employee (works out cheaper) Really I just want to legitimise what i am doing currently.

I feel bad lodging the few cheques I get a month

flash harry

getting an accountant to tell you dont spend more than you make and to make sure you watch cash flow at an early stage is a complete waste of loot unless your gonna be knocking down a decent amount......for the amount of transactions you're talking about the accounting/vat/general tax will not be too difficult

snellers

flash harry - as I said - if you are able for it yourself (and 100% confident) then yeh go ahead and do own accounts - a good accountant wont be too expensive at all and will ensure correct tax paid and anything that can be claimed against earnings is...etc

whilst I pay €30 a month for just a couple of transactions I don;t have to worry about tax probs - all I do is bundle expenses, receipts, payment stubs, bank statements and send off to him - it is all collated and end of year sorted.

I don;t have concerns of underpaying tax...etc so no scary bills at any time for me.

it is I guess a little lazy but it suits the way i work and means I can worry about getting more business and not about paperwork

seamus

There is also plenty of software available out there for a small business which will do most of your accounting for you. A small bit of reading on your part and you shouldn't have any problem filing your own accounts online.

Sage have a suite of products that have Ireland-specific settings, so pretty much do everything for you. Prices start at €1k, but when you consider that you might pay an accountant twice that per year to prepare your accounts, it might be a good investment.

Also Microsoft have released a new piece of software called Office accounting that manages you accounts and lets you standardise/track your invoices and bills. There's an express edition for free, but at the moment it's only available for the UK and the US. Irish localisation can't be far away though.

snellers

as I mentioned in rprevious post - I pay €30 per month and that is for everything - so €360 per year -

my accountant worked out my tax for me and ensured I received vat back were applicable - over the past 6 months whilst I haven;t earned a gret deal the accountant has paid for themselves. -

Maybe just maybe if you are going to the trouble and expense of setting up your own business get it done through the accountant and make sure everyhting is above board and registered properly - get your accounts managed for you for the first year at least - the accountant will work out what you (and partner if there is one) earn and ensure you get all the benefits available to you - IMO you can't go wrong - the penalties out there for submitting incorrect accounts can very very quickly hit you hard - Software I agree is great.....but it is expensive - you end up paying for updates and from my experience never get the best out of the system (most people I know have ended up submitting their year end to accountants even if they have managed throughout the year themselves just in case.....they end up paying a premium for the service as the accountant treats it as a one off job -

best of luck whatever you do!

arch20000

snellers wrote: »

as I mentioned in rprevious post - I pay €30 per month and that is for everything - so €360 per year -

my accountant worked out my tax for me and ensured I received vat back were applicable - over the past 6 months whilst I haven;t earned a gret deal the accountant has paid for themselves. -

Snellers,
any chance you could pm me the details of your accountant. That sounds really cheap. Everyone I spoke to in Dublin said it would cost me over 1500 hundred a year and that's for sole traders working in IT with not a lot of transactions and few purchases.

thanks

mr board

Snellers,
I know this is an old post, but your accountant still open for business? If so could you PM his/her details?
Cheers.
Mr. Board

Eoin

Hi mr board, please use the PM feature rather than bump old threads. If Bray is handy for you, I can recommend a great accountant. PM me if you want the details.

Also, check out the Entrepreneurial & Business Management forum which may be of use.