Thinking about starting up a business but have a worry..

session savage

Hi folks, I am contemplating starting a business but was wondering what the cons are to being self employed.
One of my main concerns is that if the business fails I will not be entitled to any social welfare for two years I heard. is that true? its a bit of a disincentive to anyone thinking about starting a business. I mean if I leave my job, invest my savings in a business and then it fails I'm gonna be left broke and not entitled to unemployment assistance while I look for a new job!! I'm not that much of a gambling man.

CamperMan

Problem is.. I heard that when your on the dole, it's only for 12 months.. so after that your on your own....

I have been self employed for over 20 years and I would never go back to being employed, OK, I earn very little money these days, but I am still happy

Nuttzz

IIRC you would still be entitled to Jobseekers allowance which is means tested.

I, too, am self employed and I find it liberating, sure some months can be worse than others, but at the end of the day I call the shots and am responsible for my livelihood. In your case if you are employed you could be made redundant by your employer in the morning, and if you were do you think that you'd really get by on the dole (or want to?)

Going into business is all about risk, if you are risk adverse then its not really for you and stick to be employed, there is nothing wrong with that either

gbee

It'd all about clients, the ability to get new ones, to service them and make money off them, pay the taxes and still make a living and command repeat business.

Anyone can start, you'll get business from everywhere, all looking for a little cheaper service or product, but unless you are really good, they all go back to their old supplier base sooner or later.

Not having the SW net when everything just stops, which is can without yo doing anything, your biggest client suddenly hired the next start-up and you don't know where to go.

Chet Zar

No need to leave your job mate, test the waters and try out your idea in your spare time? Gauge demand for what you're thinking of doing for a start.

Also look at it positively, check your post again - you need to look at the positives as well as being careful

Spiderman1975

The social welfare issue is blown out of proportion. If the business ceased trading and you are out of work then you are entitled to social welfare. The problem is most self employed people who decide to pack it in don't go about closing the business properly if at all. In most cases they just arrive at the dole office while still prepared to take any sales calls that come their way. You need to shut the business down, follow all the right procedures and prove that you are 100% finished with the business.

rainbowdash

As mentioned above there are a lot of myths about the self employed not getting welfare, you get the same as anybody else, and its means tested for one and all, except those who have enough stamps to draw on, these expire usually around 12 months after signing on.

The Apprentice

rainbowdash wrote: »

As mentioned above there are a lot of myths about the self employed not getting welfare, you get the same as anybody else, and its means tested for one and all, except those who have enough stamps to draw on, these expire usually around 12 months after signing on.

Incorrect.. my best friend was offered 8 euros.. another was offered ZILCH..

Get over it, the government likes to hurt employers and there isnt zippo u can do about it. There was talks this year of a prsi for employers but its another pr bitch slap to anyone thinking of opening something.

smcgiff

The Apprentice wrote: »

Incorrect.. my best friend was offered 8 euros.. another was offered ZILCH..

See where he mentioned Means tested

antoinolachtnai

Let's be really clear here. Starting up your own business is extremely risky, and if you have no capital to provide you with a cushion if things go wrong it is even more risky.

I am not trying to discourage anybody, it's just that you have to be realistic about what is involved here. Leaving a safe job and starting a business, especially in this economic climate, is a really tough thing to do. You need to be pretty resourceful and ready to take quite a few knocks.

A year's jobseeker benefit is about 9000 euros for a single person. If you don't have that much to hand, or a way to get your hands on it in a hurry if you get into trouble, then you need to be very careful about starting your own business.

enviro

Just start small and don't leave your job until the business is providing you with an additional salary in excess of your current income...

Rome wasn't built in a day and all that.

Read some business books about building businesses part time.

Best of luck with it.

littlehannah96

session savage wrote: »

Hi folks, I am contemplating starting a business but was wondering what the cons are to being self employed.
One of my main concerns is that if the business fails I will not be entitled to any social welfare for two years I heard. is that true? its a bit of a disincentive to anyone thinking about starting a business. I mean if I leave my job, invest my savings in a business and then it fails I'm gonna be left broke and not entitled to unemployment assistance while I look for a new job!! I'm not that much of a gambling man.

That's only if you start your business as a Sole Trader that u wouldn't get.the dole! In order to be a sole trader, your company name would have to be the same as your own name.
If you start your business as a public limited company then it would stand as a separate entity and you would have an employment contract between yourself and.the.company. If it goes bust then you would still get the dole (or you could just start a new.business)

antoinolachtnai

I do not think that advice is correct if you hold more than 15 percent shareholding. Consult a professional adviser.

Nicolas Terrasson

Absolutely, just start small and don't leave your job. You'll be able to measure the temperature and get your bearings. If you have the desire you have to try.

Good luck,

Nicolas.

srsly78

littlehannah96 wrote: »

That's only if you start your business as a Sole Trader that u wouldn't get.the dole! In order to be a sole trader, your company name would have to be the same as your own name.
If you start your business as a public limited company then it would stand as a separate entity and you would have an employment contract between yourself and.the.company. If it goes bust then you would still get the dole (or you could just start a new.business)

Not correct. If you are a director you pay class S prsi, which doesn't give you stamps. Thus you are limited to shutting down business and getting means tested dole as described above. Also as another poster said, if you have >15% shareholding in a company then special rules apply to you as well (must file a self-assessed tax return every year, even if you are paye).

TsuDhoNimh

Chet Zar wrote: »

No need to leave your job mate, test the waters and try out your idea in your spare time?

A great idea, if it's suitable for your circumstances. Do take care to ensure it's not in breach of your current contract of employment if you do consider this route. Many contracts prohibit freelancing work outside of your normal PAYE and/or prohibit working in a competitive field.

The Apprentice wrote: »

Incorrect.. my best friend was offered 8 euros.. another was offered ZILCH..

It all comes down to the circumstances. As self employed people don't pay the required class of PRSI they're not eligible for Jobseekers Benefit. As such, they must apply for Jobseekers Allowance, which is a means tested payment. If they fall into certain criteria (e.g. under 25 and living at home, their spouse earns over certain thresholds, etc.) it will have a significant impact on what they may be eligible to receive.

littlehannah96 wrote: »

That's only if you start your business as a Sole Trader that u wouldn't get.the dole!

Incorrect. See above regarding the issues surrounding means testing, which is applicable to many self employed that aren't sole traders.

littlehannah96 wrote: »

In order to be a sole trader, your company name would have to be the same as your own name.

Not true. As a sole trader you can trade under your own name without taking any further steps, but you can just as easily pick up a registered business name (RBN) and trade under a brand name as a sole trader.