Introduction to Self-Employment

Overview

Framework:
RQF
Level:
Level 2
Unit No:
A/617/4100
Credits:
3
Guided learning hours:
24 hours

Assessment Guidance

Portfolio of Evidence

Aim

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.

For the full unit details, please download the latest version of the qualification specification. This is available for download on the relevant qualifications page.

Unit Learning Outcomes

To view the assessment criteria and any additional content, please expand the relevant learning outcome below.

1 — 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.

2 — 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.

3 — 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.

4 — 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.