Setting Up a Hypothetical Business in the Field of Education

  Setting up a hypothetical business (Hybu Hyder) in the field of education

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 liability for debt                             |
|                                 |Full control retained                        |Pay more in tax                                     |
|                                 |Very little financial reporting             |Lacks credibility in market                         |...