When starting up a business some entrepreneurs want to get on with it and just understand the formalities, others want to carefully plan and understand every aspect of what is required to run a business in Jersey and others are looking to run a part-time or side hustle business.
We’ve put together steps to cater for all 3 types of entrepreneur, but remember, there really are no shortcuts when setting up a business, it takes planning, hard work and determination to make a business a success.
If you are confident in your trade and just want to know what legal requirements and licences are needed to get your business going, here you’ll find the quick steps to start your business.
Decide on the legal Structure (Sole Trader/Partnership; Limited Company) that would be most appropriate and get it set up
Get a business licence so that you are legally able to trade
Apply for any other licences your business might need to trade properly
If you are employing people, register with ITIS and Social Security
Register with the Office of the Information Commissioner if you will be holding personal data
Get a business bank account
Secure funding if your business requires it
Set up your accounts so you can track how much money your are getting and spending
Decide on the book-keeping system you will use so you can invoice clients or take payments from day 1
Property and people
If necessary, find appropriate premises to operate from but don’t over commit to them
If you need them, recruit people with complimentary skills to yours and/or give them the training they need
Speak to the Tax department about your intention to set up in business so you can agree how to pay your income tax
Speak to Social Security about your individual circumstances and how much social security contribution you will need to pay in your first years
- Why do you want to start a business?
- Are you prepared for the possibility of failure?
- Can this business idea make me money now and in the future?
- Do I have the funds to start this business? (i.e. Company registration fees; a website; the product itself; packaging; labels; money towards advertising and marketing; etc)
- Can I do this alone?
- What kind of taxes do I have to pay?
- Do I have the available time to focus on the business?
- Can I run the business from home or do I need an office space/shop/physical space?
- What is my USP?
- Who will be my market competitors?
If you want to start a business as a secondary trade, there are some important points you need to consider to make sure everything runs smoothly and legitimately. A part-time side business is sometimes referred to as a “side hustle” i.e. forming of a business while still working your day job. There are a number of businesses that can be run from home, all of which are subject to different regulatory requirements and practical considerations. Typical types of home-based business include arts and crafts, home baking, therapies, hair and beauty, pet care, bed and breakfasts, freelance services and those that have been developed from hobbies.
Hobby businesses are usually run from home (renting an office would be too expensive) and are often based on semi-recreational activities near and dear to the owner, thus earning them the nickname “hobby businesses.” There are as many types of hobby businesses as there are hobbies. A basement jewellery studio, a jazz band for hire, and an antique refinishing business might all qualify.
Often a person’s hobby or sideline business is a labour of love rather than a reliable source of income. This is most often the case when the business owner or freelancer has other means of financial support — such as a regular job or a working spouse — that effectively underwrites the microbusiness.
- Can I Start This Business Part-Time?
- Is Your Hobby Profitable?
- What Will You Need To Invest To Start?
- How Will You Market Your Business?
- Have I done enough research?
- Is Your Business scalable?
- How much time does my business take?
- How flexible are you?
Working in the business less than 8 hours
You do not require a business licence
You must record any income to declare on your personal tax return under additional income
Do I need permission to run my business from home
Anyone intending to trade from home should inform their mortgage provider or landlord and check that they are allowed to do this under the terms of their mortgage or tenancy agreement. Landlords may be unwilling to grant permission if, for example, there will be nuisance to neighbours caused by unreasonable noise or parking problems due to frequent deliveries to the property.
When/how do I declare my income as additional tax
If you are working 8 hours or more then you require a business license and will need to complete the self employed section of your tax return indicating how much profit your business has made after expenses.
If you are working less than 8 hours per week then you are not classed as self employed, therefore you will have to add your additional income on your personal tax return form under section 15, additional income.
When does a hobby become a business for tax purposes
Once you are working more than 8 hours per week.
Do I need to register a company name
You have the opportunity to register a name when you are working more than 8 hours per week and require a business licence.
What trading license will I need
If you wish to trade from home as a Sole Trader (one person) or Partnership (two or more persons) in Jersey, it is a legal requirement to apply for and obtain a New Business Licence which is issued by the Population Office. Certain types of business will require additional licenses or registration apply regardless of whether or not the business is run from home.
Examples of these that are required for home-based business include:
- Taxi and private hire
- Skin piercing and tattooing
- Massage and special treatments
- Animal boarding or home boarding
- Food Business Registration.
Do I need insurance
Most domestic home and contents insurance policies do not include cover for business activities. For example, anyone running an eCommerce business from home will need to insure their stock against theft or accidental damage. If it is intended to store business equipment or stock in a garage or shed, it will be necessary to check that this can be covered. Insurance providers may require the homeowner or occupier to take out specific business and contents cover, either as an extension to the existing home insurance policy or under a separate policy. Existing home contents insurance cover may also be invalidated, and claims refused (even if the loss claimed is not connected to the business) if the insurance provider has not been informed that a business is being run from the property.
To set up a business that will have longevity requires careful research and planning. Follow these 6, easy to navigate, steps to maximise your success when starting up your business.