Starting a micro business from home- questions

Hi,
I'm looking for some advice regarding a business idea and what I need to do to be legal and above board. Basically I want to expand my hobby and move on to selling some of the craft items I make.
I am currently and will continue to be a PAYE worker so that will be my main source of income. The craft business will be part-time based at home and I suspect very small, particularly starting off. Initially I would work on a commission basis- making to order, but would hope down the road to produce enough to sell at craft fairs and perhaps online.
I want to have a business name that isn't my own so will need to register that with the CRO. From what I've read I'd be best registering as a sole trader- is that right? Can you be a sole trader and only have to fill in a form 12 (assuming income would be less than the threshold) or would you have to complete the form 11?
I don't think I would need to register for VAT as turnover would be below the threshold?
What kinds of records are needed- is it basically x amount spent on supplies, sold for y amount, profit is z? or is there more to it than that?
I currently buy supplies (eg fabric, yarn) for personal use in retail shops or online (sometimes from the US)- is there anything different that should be done for business use? I would prefer to keep things as simple as possible!
I pay PRSI class A already- will I have to pay self employed PRSI as well? how would that affect pension/ benefit entitlements down the road?
Is your house or car insurance affected as well? Would the council charge me rates?
Apologies for all the questions but I'm trying to get my head around what I need to do to comply and its proving difficult to find all the information I need in plain english. I don't have a background in business so welcome any and all advice. thanks

Check if your local Enterprise Board is running Start Your Own Business courses, especially this time of the year as a lot of courses are starting Sep/Oct. These can be very useful to answer your questions. I did one through my local Enterprise Board, it was one evening a week for 8 weeks, heavily subsidised so only cost €50 and it was excellent.

If not your local FAS may also run them or local colleges as part of night classes in winter. I had previously done a FAS one some years ago and the Enterprise Board one was much better and cheaper, still didn't start a business though

Thanks wbbs, I did email my local enterprise board last week but they haven't responded yet. I'll follow them up with a call.

"I'm looking for some advice regarding a business idea and what I need to do to be legal and above board. Basically I want to expand my hobby and move on to selling some of the craft items I make"
Hi Flossyknits I came on to look for same advise, same situation paye worker partime fixed contract.considering trying to make my hobby a small business and need to know about tax.did you find out anything since you last posted and if so please will you share knowledge? would appreciate asvise from all. did try local enterprise board for info and like flossyknits no reply

Well I may as well give you the benefit of my start your own business course as you did not get replies from enterprise board, I would ring them if they are not responding to emails.

http://www.citizensinformation.ie/e...loyment/self_employment_as_an_individual.html There is good general information here.

To register with revenue for tax you need to fill a TR1 form, you will pay tax/prsi/usc on your net profit, sales less purchases, as you are already working your tax credits are probably already being used up there so depending on overall level of income you will probably pay the full 20% (if still in that bracket) on the extra income.

You must register your business name with CRO if you intend to trade under a name other than your own.

You may need insurance depending on what your product is, public liability and product liability at least, you also should advise your house insurer that you are carrying on a business at the premises, now I don't know how this works depending on what you are doing, for example home baking is an obvious one and house insurers run a mile, there are only a few companies willing to insure but if for example someone was knitting aran jumpers then I can't see how this has any impact on the house insurance but I am not an expert in this area so maybe ask a few brokers depending on your product. If people are to be calling to your house to collect your products then you definitely should inform your insurer.

Craft fairs will look for trading insurance as well and MAST (association for market traders) are one of the best for advice about this, there is also another company called Pike Insurance Services who are good with craft business insurance too. If you are using your car for business purposes again you need to advise the company, I know AXA for example have limited business use included in their normal policy. If you are using your car then you can claim some of the expenses, you take note of all expenses for the year and then allocate them percentage wise to how much personal/business.

Maybe you already in some but if not I would check if there are any facebook groups for whatever your craft is, there is usually lots of experience on these on how to convert them to businesses.

Keep good records, document everything, keep all your receipts. Not expert on this but there is unlikely to be implications for rates on house etc if you are not making changes to the house to accommodate the business, however this is a real grey area I think and someone will start looking at it eventually, water rates could be one of those things that might trigger it.

Finally you could contact a few accountants, there are always some who will give you an initial consultation free to answer a few questions if they are likely to get the business from you for accounts or alternatively simply ask what is their hourly rate and buy yourself an hour of their time, have your list of questions to ask, I have done this and it was very useful. It will also be an allowable business expense.

Unfortunately hand-made, hand-crafted, custom designed etc all means lots of time and work for producer and people are very slow to pay sufficient for your time, add on to a basic hourly wage the additional costs of turning it into a business and it is hard to make money from craft businesses. I find well meaning friends and family who keep saying you would make a fortune doing x/y/z are the very ones who will give the jaw drop reaction when you quote a price for the product they had previously received for half nothing when it was a hobby!

So on that cheery note I will finish

PS This is all the stuff I learned on my SYOB course so don't take it as gospel, my memory might not be great, there is a good discussion forum on boards.ie under business/entrepreneurial where you might get some good answers too.