Level 2
Unit No:
Guided learning hours:
24 hours

Assessment Guidance

Portfolio of Evidence


The aim of this unit is to help learners understand how to become self-employed, the support available and the challenges involved. They will consider the advantages and disadvantages of self-employment; potential sources and levels of income and expenditure as well as the specific responsibilities of a self-employed person.

Unit Learning Outcomes


Know about self-employment in a given sector.

Learning Outcome 1: Indicative Content  

Examples of the contribution made by self-employed may include:
• specialist skills and knowledge
• offer range of products and services independently
• niche markets
Reasons for self-employment in a given sector may include:
• short term contracts
• need for specialist skills
• only required for specific periods in the year
Advantages and disadvantages of being self-employed may include:
• own boss or several bosses
• choose work you are interested in doing
• no work available or too much at any one time
• limited financial stability
• choosing when/how to work

Characteristics of successful self-employed people may include:

• self-starter
• disciplined
• good organisational and planning skills
• excellent communication skills
• entrepreneur
• multi-tasking
• willing to work on own

Assessment Criteria

  • 1.1

    Explain the contribution of self-employed people to a given sector.

  • 1.2

    Explain the advantages and disadvantages of being self-employed in a given sector.

  • 1.3

    Describe the skills, qualities, attitudes and behaviours characteristic of successful self-employed people in a given sector.


Know about income and expenditure as a self-employed person.

Learning Outcome 2: Indicative Content 

Ways to get income may include:

• local or national funding
• tenders
• short or long-term contracts
• consultancy fees
Typical levels of payment may depend on:

• skills and knowledge required
• complexity of the job
• skills and experience of the person carrying out the work
Expenses may include:

• depreciation of equipment and materials
• person's time
• hiring and use of tools
• insurance
To predict costs, turnover and profit, certain headline assumptions will need to be made.

Assessment Criteria

  • 2.1

    Explain how they would generate income as a self-employed person within a given sector, citing typical levels of payment for particular products or services.


Know the responsibilities of a self-employed person

Learning Outcome 3: Indicative Content  

Examples of registering as a self-employed person will include notification to the Inland Revenue and Social Security if previously unemployed.
Business records may include:

• Invoices and receipts
• VAT returns
• Tax returns including evidence of income and expenditure
• Reports

Assessment Criteria

  • 3.1

    Describe how to register as self-employed.

  • 3.2

    Describe the business records that need to be kept.


Know about planning for self-employment.

Learning Outcome 4: Indicative Content  

Considerations to be taken when planning for self-employment may include:

  • potential income and expenditure
  • are there sufficient business opportunities to sustain a viable income?
  • is their a market for the product or services?
  • facilities, equipment, materials required to set up the business

Examples of support available may include:

  • financial institutions eg bank or building society may provide a loan
  • local authority business start-ups eg provide advice and possible funding government initiatives eg provide advice and possible funding

Assessment Criteria

  • 4.1

    Explain how planning for self-employment can contribute to a successful outcome.

  • 4.2

    Explain the different sources of support available to people considering self-employment and how they can be used to help in setting up a business.