It’s an exciting journey to consider starting your own business! It’s a significant commitment that comes with numerous rewards and benefits. As you embark on this entrepreneurial adventure, we’re here to provide guidance and support. Before taking the leap, let’s explore four essential things to consider when starting a business in Ireland.
By understanding these key factors, you’ll be well-prepared to navigate the initial challenges of growing a business and set yourself up for success. Remember, starting a business may require dedication and hard work. Still, the endless possibilities and the rewards can be truly fulfilling. Let’s dive in and discover what it takes to embark on this exhilarating entrepreneurial path.
1. Is your business idea a viable one?
Talk to your friends and family about your business idea. Your business idea doesn’t need to be unique, groundbreaking or new to your sector. You may be able to produce goods of better quality or cheaper price.
You can provide a particular service better than anyone else in the marketplace. You can reach new markets by extending your business online or in new regions.
Talk to a professional with experience in the industry you are trying to enter.
Starting a small business vs startup
A small business is the beginning of something great. Suppose you are considering falling under the SME category. In that case, you are fueled by the desire to provide exceptional goods or services within a familiar market, making a local or regional impact.
However, a high-potential startup or HPSU, an innovation-driven enterprise, dares to dream bigger. It aspires to break barriers, create new markets, and revolutionise existing ones by unleashing the power of groundbreaking products, technologies, and business models. These startups embody the spirit of limitless potential, poised for rapid growth and scaling, propelled by their commitment to innovation, technology, and the delivery of unparalleled value.
Starting a business from abroad
If you are considering starting a business in Ireland from abroad, you are embarking on an exciting and ambitious journey. Venturing into a new market and embracing entrepreneurship opportunities in a foreign country requires careful planning and preparation. As a non-resident director, you must understand the local business environment to establish a strong network and seek professional advice regarding the regulations.
2) Do you have enough cash to support your business initially?
Starting a business on your own means, you will need cash to support the initial stages of business development.
You could use your savings, borrow from friends or family or receive a loan from the bank. Start by budgeting everything you need to get your business started. This will help you determine how much money you need to support your business initially.
Consider keeping your job initially and working on your business on the side. This takes discipline, focus and passion for your business model. But, if you ask if you can be employed and self-employed simultaneously in Ireland, the short answer is yes.
We have many clients that come to us while they’re still being employed full-time. This is an excellent way to fund your business initially, but it may only work for a while. Set savings goals so you keep sight of the bigger picture.
Government grants for starting a business – Local Enterprise Office
The Local Enterprise Office have business grants and supports for entrepreneurs who want to start a business in Ireland. Please take advantage of these free resources; they’ll push your business in the right direction.
Enterprise Ireland funding for companies
Enterprise Ireland is a government organisation in Ireland that offers various support and funding options to help businesses grow and expand. Regarding funding, Enterprise Ireland provides financial assistance to startups and established companies in different sectors. They offer a range of funding programs, such as grants, equity investments, and loans, tailored to the specific needs of businesses at various stages of development. These funding options support research and development, market expansion, product innovation, and international growth.
Seek support from financial institutions
Financial institutions, such as banks and credit unions, or alternative funding sources, such as crowdfunding, or even social welfare business start-up schemes. can be valuable for securing funding for your new business. However, it is crucial to approach this process with caution and careful consideration. Each financial institution has its own criteria and requirements for providing funding. It is essential to carefully review the terms and conditions of any financing agreement and seek professional advice to ensure it aligns with your business goals and financial capabilities.
3) Do you have what it takes to be your own boss?
Take a personality test
Personality tests are a great way to determine what kind of person, leader and boss you are. Hubspot has a list of 14 free personality tests you can take online.
Take a few of these tests and determine your type of person – you may identify with a few different characteristics.
Join a network/community of likeminded people
Being your own boss means you’ll be held accountable for the actions of your business and the progress of your new business. Consider what will happen to your work/life balance and if you have a good support network to keep you and your business on track.
Meetup is a great platform that will put you in touch with entrepreneurs on the same journey as you. If you are serious about setting up in Ireland, Scale Ireland is a great network. They are an independent not-for-profit organisation supporting, representing and advocating for Irish tech startup companies.
4) Do you know which business structure type to choose?
When starting a business in Ireland, you must decide what business structure to set up.
You can set up as a Sole Trader or Limited Company. Both have pros and cons, and your answer lies within your business idea.
It’s easier and quicker to set up as a Sole Trader. Still, a Limited Company offers you more protection against specific claims against the business. When you set up a Limited Company, you set up a separate legal entity that allows the company to enter into contracts and do business. You can be a director of a Limited Company, and you’ll only risk what you put into the business. As a Sole Trader, your personal assets can be used as collateral for the business.
Additionally, how you pay yourself as a business owner can differ; as a Sole Trader, you directly take profits, while in a Limited Company, you can draw a salary and potentially benefit from tax efficiencies.
Paying tax as a business owner
We often get asked tax questions from people considering setting up a business in Ireland. There are several key considerations to keep in mind, outlined below.
By carefully considering these factors and seeking expert guidance, you can manage your tax responsibilities effectively, optimise your tax position, and ensure compliance with the Irish tax system as a business owner.
Ensure you register your business with the Revenue Commissioners for tax purposes. This includes obtaining Tax Registration Number (TRN) and a Value Added Tax (VAT) number, if applicable.
Stay aware of important deadlines to avoid penalties or interest charges. These deadlines can vary depending on the type of tax, such as income tax, corporation tax, or VAT. Familiarise yourself with the relevant filing and payment dates to fulfil your obligations on time.
Accounting and bookkeeping
Maintain accurate and organised financial records, including income, expenses, and receipts. Good bookkeeping practices will facilitate the preparation of tax returns and ensure compliance with tax regulations.
Tax deductions and allowances
Identify and maximise tax deductions, credits, and allowances available to your business. These can include expenses related to business operations, employee wages, capital investments, research and development (R&D) activities, and specific industry-related incentives.
Understand the rules and rates applicable to corporation tax levied on a company's profits. Familiarise yourself with allowable deductions, tax credits, and reliefs that can reduce your corporation tax liability.
Value Added Tax (VAT)
Determine if your business needs to register for VAT and the applicable VAT rates for your goods or services. Understand the VAT obligations, such as filing VAT returns and making regular VAT payments.
If you have employees, be aware of your obligations regarding payroll taxes, such as Pay-As-You-Earn (PAYE) income tax and Pay-Related Social Insurance (PRSI) contributions. Ensure accurate payroll calculations and timely remittance of taxes to the Revenue Commissioners.
Stay current with tax laws and regulations changes. Maintain compliance with tax filing requirements, disclosure obligations, and anti-avoidance measures. Consider seeking professional advice or consulting with a tax advisor to navigate complex tax matters effectively.
Where to get advice on starting a business
- Local Enterprise Offices (LEOs) are an excellent place to start. They are a valuable resource for guidance and support. LEOs offer mentoring, training, and financial assistance to new entrepreneurs.
- Business support organisations such as chambers of commerce and industry associations are recommended for networking and industry-specific advice.
- Explore online platforms and communities that offer forums and networking opportunities for entrepreneurs.
- You can also seek professional advice from accountants, solicitors, and business consultants to ensure legal compliance and sound financial management.
Larissa is a Fellow Chartered Accountant (FCA) and is the CEO of Accountant Online, which specialises in company formation, company secretarial, annual accounting services, bookkeeping, tax, and payroll services for micro and small companies in Ireland and the UK.