Tag Archive | Starting a business

Self financing your business

Here’s an article from inc.com (7 Easy Steps to Bootstrapping Success) which give some good ideas on self-financing  a business venture. Some useful advice seen as banks are not too generous with start-up financing at present.

10 Ways to Finance Your Business

Here’s a nice article from inc.com on way to finance your business 10 Ways to Finance Your Business. Yes, it’s aimed at a US audience but is  good summary for any start-up.  Item 3 refers to getting money back from you taxes as an employee. This is also possible in Ireland (see here) under the Seed Capital Scheme. Not all options may be relevant to you, but it’s worth a read.

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Can I employ myself and treat this as an expense?

If you have just become self-employed, you’ve got a million things on your mind and book-keeping and accounting is not usually top of the list.  But there are some important things you need to do in terms of getting registered for various taxes.  What I say below, and the title of this entry, was inspired by a conversation I had last night with someone who was looking for some help with book-keeping.

Let’s assume you become self-employed i.e. you are a sole trader. In any of my books, the early chapters explain the format a business can have (sole trader, partnership or company) and also a fundamental accounting concept – the entity concept. This concept means that the person is separate from the business. So here’s an outline of what happened to this guy I met last night. He lost his job and set up his own business as a sole-trader.  He got some bad advice telling him to register as an employer with the tax authorities and pay himself a wage i.e. he was both the employer and the employee. Under the entity concept this could not happen. Why? When a sole trader makes a profit, a portion of this profit (usually called drawings) can be withdrawn for personal use. Or in accounting  jargon, the business entity gives a portion of the profits to the person behind the business.  Wages are an expense in the accounting world, being deducted from revenues to calculate profits.  And, wages are paid to employees you must by definition be a different person or entity from the employer. If this business was a company however, the story would be different. A limited company is a separate legal and accounting entity, so the guy I was advising could set up a company, be a director of that company and pay himself a wage. So, in summary if you are a self employed sole trader, you cannot pay yourself a wage as if your were an employee; instead you withdraw some portion of the profits to live on.

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How to use Kickstarter to launch a business

As a small business, getting finance is always a big problem- even more so nowadays with poorer economic times. And let’s not say too much about the banks! An alternative funding source to get you off the ground might be crowd funding. What you ask? Well, the basic idea is to get a “crowd” of people to all provide a small amount of money to help start your business venture. So if you needed €2,000 to kick start you venture, could you get 200 people to “donate” €10 each – I say donate as they may not get any return from it.  But where’s the crowd you ask? Well, social networking is the “in thing” nowadays it seems. You could use you business and social networking contacts as a start. If this is not sufficient, there are some websites out there you may help. Kickstarter.com is one such site  ( here’s a recent piece from inc.com “How to Use Kickstarter to Launch a Business“.  While such site are in their infancy and may still be more common in the US than Europe, don’t rule them out straight away. Crowd financing may be a viable answer to those smaller one-off ventures, but you know what, sometime these turn into a great and booming business.

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A great quick guide to starting a business for very little money.

Found this link on the http://www.smallbusiness.co.uk http://bit.ly/aYUNza. Some good tips on starting a business on a small budget. The piece is mainly about how technology can help.

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