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Level 2
Unit No:
Guided learning hours:
22 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.

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-employed people 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

Assessment Criteria

  • 1.1

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

  • 1.2

    Explain why in a given sector certain products and services are provided by self-employed people.

  • 1.3

    Identify the advantages and disadvantages of being self-employed.


Know the characteristics of successful self-employed people.

Learning Outcome 2: Indicative Content 

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, possibly

Assessment Criteria

  • 2.1

    Explain what skills, qualities, attitudes and behaviours are characteristic of successful self-employed people in a given sector.


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

Learning Outcome 3: 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

  • 3.1

    Explain how they would generate income as a self-employed person within a given sector.

  • 3.2

    Identify typical levels of payment for particular products or services.

  • 3.3

    Describe the expenses likely to be incurred in setting up as a self-employed person and in maintaining a business within a particular sector.


Know the responsibilities of a self-employed person.

Learning Outcome 4: 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

  • 4.1

    Describe how to register as self-employed.

  • 4.2

    Describe the business records that need to be kept.


Know about planning for self-employment.

Learning Outcome 5: 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

Assessment Criteria

  • 5.1

    Explain what needs to be considered when planning for self-employment.

  • 5.2

    Explain the importance of planning for self-employment in terms of:

    •contributing to own success
    •gaining the support of others


Understand the support available to people considering self-employment.

Learning Outcome 6: Indicative Content 

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

  • 6.1

    Explain how the different sources of support available can be used to contribute to own success as a self-employed person.

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