Setting up a hypothetical business in the field of education
Title:
Setting up a hypothetical business (Hybu Hyder) in the field of education
Word Count: 3,680 Words
An Introduction to Self-employment:
Self- employment means ‘starting and running a successful business or social enterprise’ (AGCAS, 2011). There are many reasons that people decide to start up their own business, including:
to sell their skills and/or expertise; to prove an idea; because they are their own boss; to gain a sense of freedom; because they relish the challenge; as they can do something they are interested in; because they want to generate a second income stream; for a possibility to earn more money; to work fewer hours;
As Percy Emmett states, ‘when you’re running your own business, you are in control. You decide what you work on’ (SJPE6004 Lecture Notes, 2013), thus, demonstrating that there are several benefits to self-employment. But how do we go from our ideas to the reality of setting up a business? Firstly, you must decide on a structure for your business; businesses operate under a selection of legal structures depending on:
the product/ service types of customers investment and funding the number of people involved in the business
Your decision will have implications for tax, national insurance, accounts, record keeping and how management decisions are made. The following table outlines the features of each available business structure:
Structure
For
Against
Sole trader
Low cost, easy to set up
Full control retained
Very little financial reporting
Full liability for debt
Pay more in tax
Lacks credibility in market
Partnership
The above, but with more heads
More potential to raise finance
The above, affecting all partners
Can be messy to wind up
Limited company
Less personal financial exposure
Favourable tax regime
Ability to work for corporate clients
Administrative and regulatory demands heavier
Annual accounts and
Setting up a hypothetical business (Hybu Hyder) in the field of education
Word Count: 3,680 Words
An Introduction to Self-employment:
Self- employment means ‘starting and running a successful business or social enterprise’ (AGCAS, 2011). There are many reasons that people decide to start up their own business, including:
to sell their skills and/or expertise; to prove an idea; because they are their own boss; to gain a sense of freedom; because they relish the challenge; as they can do something they are interested in; because they want to generate a second income stream; for a possibility to earn more money; to work fewer hours;
As Percy Emmett states, ‘when you’re running your own business, you are in control. You decide what you work on’ (SJPE6004 Lecture Notes, 2013), thus, demonstrating that there are several benefits to self-employment. But how do we go from our ideas to the reality of setting up a business? Firstly, you must decide on a structure for your business; businesses operate under a selection of legal structures depending on:
the product/ service types of customers investment and funding the number of people involved in the business
Your decision will have implications for tax, national insurance, accounts, record keeping and how management decisions are made. The following table outlines the features of each available business structure:
Structure
For
Against
Sole trader
Low cost, easy to set up
Full control retained
Very little financial reporting
Full liability for debt
Pay more in tax
Lacks credibility in market
Partnership
The above, but with more heads
More potential to raise finance
The above, affecting all partners
Can be messy to wind up
Limited company
Less personal financial exposure
Favourable tax regime
Ability to work for corporate clients
Administrative and regulatory demands heavier
Annual accounts and