Introduction to Self-Employment

Know about self-employment in a given sector.

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

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.

Characteristics of successful self-empoyed 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.

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.

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.

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.

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.