An Entrepreneur’s guide to starting a brand new business
With the low rates of corporation tax and stripped-back bureaucracy, Ireland is emerging from the recession with a strong reputation for being a good place to do business. Global players like Apple, Pfizer, Google and Facebook have major operations here, with US-owned companies alone directly investing $277bn and employing 130,000 people.
If you’re an entrepreneur just starting out, there is lots of support available and financial incentives to help you get your venture off the ground. So, where do you start?
Get a business plan in place
This is essential for any entrepreneur. Having a gut feeling that your business idea will work is important, but you need to back this up with a proper analysis of the market and an assessment of the risks and opportunities that lie ahead.
If you go to the bank, grants providers or venture capitalists for investment they will want to see your business plan before giving you any funding. So always put proper thought to your plan and don’t forget to keep it updated as your business evolves.
A typical business plan should cover:
· Background to the business
· Marketing and sales strategy
· Research and development
· Your location
· Your team
· Current financial position and forecasts
As part of this you will need to do a SWOT analysis to identify your strengths, weaknesses, opportunities and threats. Let’s say Claire is setting up an app for foodies with allergies and dietary requirements to find restaurants in their area. Her SWOT analysis could look like this:
· Meeting a need for a specialist audience
· First-mover advantage
· Working from home, giving you low overheads
· Need may already be satisfied by other competitors like TripAdvisor and local review sites
· Needs high levels of accuracy communication with restaurant owners, making it hard to automate
· Continued growth in the food sector and mobile
· Cross-promotion with blogs, magazines and restaurants
· Offer other services like nutrition advice and recipes
· Highly scalable to other regions
· Legal: What if someone becomes unwell after visiting a restaurant on your recommendation?
· High set-up costs and keeping the app updated for new devices and operating systems
Get the legals right
When setting up the business you need to decide on its structure:
Sole trader: A very simple structure which suits smaller businesses. However, be aware that you are personally liable for any losses in the business, so there is an element of risk attached.
Partnership: You and your partner are jointly responsible for the running of the business, making you both liable for any losses – as well as jointly benefitting from the gains of course!
Limited company: This means the business is a separate legal entity and your personal finances are unaffected if the business goes into debt. You have to produce an annual return for the Companies Registration Office (CRO).
You also need to be aware of the Companies Act 2014, which came into effect in 2015 and specified that all existing private companies limited by shares must convert to either an LTD (private company limited by shares) or a DAC (Designated Activity Company).
Picking a name for your business
You must register your business name with the Companies Registration Office (CRO). They have all the information you need on the forms you have to complete and the fees you have to pay.
It normally takes three weeks for the process to be complete.
Before registering the name you should run a search to check if it is already being used by another business and search the trademark register at the Patents Office. You want to avoid the situation where you have your shiny new website, logo, Twitter handle and business cards…only to find out someone else is running an almost identical operation and you’re back to square one.
Look after the financials
With Ireland being such a pro-business country, while you can expect to pay various taxes there are lots of attractive incentives to help entrepreneurs start up and grow.
What taxes will you have to pay?
What tax and financial incentives are out there?
Start Up Refunds for Entrepreneurs (SURE): This is a tax refund scheme that gives you an income tax refund of up to 41% of the capital you invest in starting your business. Use the online calculator on sure.gov.ie to estimate your refund.
JobsPlus: This is an incentive scheme from the Department of Social Protection to encourage employers to hire people who are long-term unemployed. There are grants of €7,500 and €10,000 available.
Back to Work Enterprise Allowance (BTWEA) or the Short-Term Enterprise Allowance (STEA): These allowances are there to help unemployed people get back to work. As a new business founder you might get grants for training and access to loans to help fund your business.
Start Your Own Business Relief: If you have been unemployed for at least 12 months and set up a qualifying business, you may be eligible for income tax relief. This is only a temporary scheme though, so watch out for the deadline.
R&D tax credits: A 25% tax credit for qualifying Research and Development expenditure.
How do you pay your taxes?
You can file your company returns online with the CRO using CORE (Companies Online Registration Environment).
It’s best to get online accounting software in place early on to help streamline your accounts processes. A system like Sage One will help you keep on top of transactions throughout the year so you can file your returns efficiently – no missed deadlines.
It’s well suited to entrepreneurs:
· Cloud-based software which works on PC, Mac, Android and iOS means you can access the financials wherever you are in the world
· Team up with your accountant by giving them a login. Or if you’re bootstrapping in the early days, you can save costs by using simple, easy-to-use software and looking after the accounts internally
· Stay compliant with Revenue and keep up to date with changes in legislation
· Run off reports and financial forecasts to keep on top of the money coming in and out of the business, then file your tax returns in minutes. By connecting to the bank you can make sure you pay the tax man on time too.
· Free trial so you can take a test drive of your online accounting software and discover the benefits to your new business.
Useful resources for entrepreneurs
· ie has a wealth of information to help get you started
· The Revenue has essential information on Irish Tax and Customs
· Local Enterprise Officesoffer support to new, local businesses with an aim to stimulate economic activity. Look out for training, courses, mentoring and financial support
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