Many successful businesses begin as homegrown ventures and being a parent shouldn’t deter you from turning your passion into a thriving business.
Many successful businesses begin as homegrown ventures and being a parent shouldn’t deter you from turning your passion into a thriving business. It can even turn out to be an advantage.
The number of start-ups in Ireland increased by 13% in Q1 of 2016 compared to 2016 and the recent changes to Capital Gains Tax and the Self-employment Tax Credit in Budget 2017 reveal that the government has an appetite to help people starting their own business.
Start with something you love.
Sometimes success comes knocking even when you’re not even looking for it. Irish father Brian McMahon of Brand New Retro started a blog to document content he created in the postpunk days of the late 1970s/80s. (Source: Brand New Retro)
The blog soon became popular and he eventually collaborated with a friend on a print version and is now exhibiting the work in the Little Museum in Dublin. Passion and drive go a long way. Think about whether you’re prepared to put in some hard graft and if you will enjoy the process!
Questions to ask
Being a parent can bring unique challenges to building a business. It’s important to ask yourself some questions before taking the plunge:
What have I got to lose? (E.g. are you giving up a secure job?)
Will there be enough income to support my family?
Am I passionate about what I will be doing?
What do my friends and family think?
How can my family and business life complement one another?
How much capital do I need?
Have I got a plan in place?
You don’t need a tonne of experience to setup a business. Single mother of three Melissa Kieling admits the extent of her business resume was limited to bake sales when she had an idea for a better lunchbox. Now her lunchbox business PackIt is worth $14 million.
The key is to focus on the positives of starting a business while having a family.
Your children can benefit hugely from watching their parents achieve their dreams. You can also incorporate your kids into the business, getting them to test out new products or help with creative ideas.
Irish businesswoman Marissa Carter started her tanning business as a mum. The beauty therapist turned entrepreneur and founder of the Cocoa Brown tanning empire is one of Ireland’s most successful businesswomen.
She says her family were a huge support: "I've had a lot of help from my husband, and my family have been great too. My son Charlie is the wildest, funniest and most independent little thing’’ (source).
You don’t need the ‘’perfect work-life balance’’, just give each part of your life the attention it deserves.
That may involve getting up at 5am to write emails before the kids get up or working while your kids are at school. Funding
You don’t need millions to start a business. Single mother Zhena Muzyka started her Gypsy Tea business by selling tea out of a push cart with a $3,000 loan from her family. Now her tea is sold in over 10,000 locations across the US.
If you don’t have any savings or can’t borrow off family, there are other ways of raising the money.
Got big plans? Your Local Enterprise Office wants to fund businesses with the potential to develop innovative products or services for international markets that will provide jobs. This scheme is called the ‘High Potential Start-up’.
Alternatively the New Frontiers Entrepreneur Development Programme runs in partnership with the institutes of technology to provide mentoring, support, incubation space and a €15,000 scholarship payment to those who qualify.
Even if your plans are not so lofty at this stage, you can still visit your Local Enterprise Office for help with growing your business.
They offer a range of supports including:
Market research information
Business planning and advice
Access to business mentors
Feasibility grants and co-investment
Social Welfare Schemes
Maybe you’re at home with the children and it’s time to start a new venture or earn a little extra cash. This is where the Back to Work Enterprise Allowance or Short-Term Enterprise Allowance comes in.
The Back to Work Enterprise Allowance encourages people in receipt of social welfare to become self-employed. The scheme allows you to retain a percentage of your social welfare payment for up to 2 years.
If your business gets approved by the Department of Social Protection or local Development Company and you’re in receipt of a qualifying social welfare payment, you should qualify for the scheme.
In addition to the weekly payment, you can also get help with the cost of the initial setup. For example you can claim up to €500 for advertising, €1000 for business equipment, and €250 for business registration. So in total you could be awarded up to €2,500 in business setup aid in a 24 month period.
To apply for the scheme, you must complete a form BTW2 you can find here.
Employment grants from your local enterprise office do not affect your entitlement to the Back to Work Enterprise Allowance so it could be worth applying for both!
Got a great idea but don’t have the capital to get it off the ground? Try crowdfunding.
Kickstarter is a global crowdfunding platform that has funded over 77,000 creative projects funded since 2009. Successes include the Pebble Smartwatch which turned out to be the highest funded campaign on the platform, raising $20,338,986. And my personal favourite, the Coolest Cooler, that raised $13,285,226. They charge 5% commission.
Indiegogo are similar but charge a 9% commission, refunding you 5% if your project goes ahead.
It doesn’t even need to be an amazing invention or innovation. You will find all sorts of products crowdfunding from music albums, personal art projects to home brewing companies and start-up bakeries.
Crowdfunding is also a great way to get your friends and family on board by showing them that you’re passionate about starting your business.
Starting a business also comes with some practical considerations like creating a business plan, securing funding, setting up a website and doing taxes. There are tonnes of online and offline resources to help you with these steps.
Enterprise Ireland has free business plan templates and the likes of Hubspot and Hootsuite offer free training and tonnes of free templates to help with your social media and marketing strategy.
If you need to buy a domain, look for it on GoDaddy.com. You don’t need to do a web design course, you can use Squarespace, Wix or Wordpress to create a website without expert coding knowledge.
Your tax obligations
Here comes the fun part! When you become self-employed in Ireland, you need to register your business with Revenue. You can do this on ROS, Revenue’s online system.
This is because you must pay tax on profits from your business and any other income you have. It’s also important that you file a tax return under the self-assessment system each year by the November pay and file deadline. You must do this yourself or use an agent like Taxback.com. If you don’t complete this by the deadline you could be liable to a penalty of €250.
A new Earned Income Tax Credit of up to €550 was introduced for taxpayers earning self-employed income in certain cases. This is calculated at 20% of your income (excluding earned income that is taken into account for the PAYE Tax Credit) subject to a maximum of €550).
You must also register for VAT if your turnover is likely to be over €75,000 (for goods) or €37,500 (for services). If you register for VAT, Revenue will send you a VAT3 which you must return to them. Normally VAT returns are made every 2 months, but in some cases small business can make special arrangements if you can’t pay as often.
If you earn over €13,000, then you will be liable to pay the Universal Social Charge and this goes up by 3% if the income is over €100,000.
Self-employed people also pay Class S Pay Related Social Insurance on their income. These contributions are paid at a rate of 4% for those aged 16-55 and are used to fund social insurance payments.
This covers a limited number of payments including:
Widow’s/widower’s or surviving civil partner’s contributory pension
State pension (contributory)
If you earn less than €5,000 for self-employment in a year then you will be exempt for PRSI but you may still pay €500 as a voluntary contributor if you meet the conditions.
There are a number of business expenses you can claim for when you run your own business. The general rule is that the expense must be for the sole purpose of earning profits for your business.
Purchase of goods for resale
Wages, rent, rates, repairs, lighting and heating, etc.
You cannot claim for expenses not wholly and exclusively paid for the purposes of the trade or profession or business entertainment expenditure. This includes the provision of accommodation, food, drink or any other form of hospitality.
You can claim on the cost of these expenses in your tax return. It’s just important to keep all records and receipt for expenses should the Revenue come knocking!
Doing your tax return
You must submit your annual tax return with Revenue by the pay and file deadline in November. This year’s deadline was the 10 November but Revenue usually announce the exact date in Feb/March.
If you need help with your annual tax return, you can try Taxback.com’s dedicated self-assessed service here and a team of specialised tax accountants will prepare and file your tax return on your behalf.
As you can see from the examples above, many parents started successful business from home. Being a parent can be hugely positive for creating a business and it certainly shouldn’t stop you from earning a bit of extra money from your passion!