Tuesday 25 June 2019

How to become your own boss - with €10,000, or less, behind you

It can cost just hundreds of euro to set up a business but costs can spiral, writes Louise McBride

There's a growing demand for gardening maintenance and landscaping services and you could set up a basic gardening business for less than €1,000 - depending on the type of equipment and tools you need
There's a growing demand for gardening maintenance and landscaping services and you could set up a basic gardening business for less than €1,000 - depending on the type of equipment and tools you need

There may not be a better time to set up a business than right now - thanks to the economic boom and recent improvements in social welfare benefits for the self-employed. You don't always need a lot of cash behind you to start a business. It can cost as little as a few hundred to a few thousand euro to set up a small business - though startup costs can run to several thousand or more, depending on what exactly you establish.

To be able to start a business without much cash behind you, you must usually be setting yourself up as a sole trader or self-employed individual who does not require a business premises. It shouldn't cost too much to set up a business that provides a local or personal service such as window cleaning, house cleaning, hairdressing, make-up services, or personal fitness training. "To set up a business that offers one of these services, you don't usually require a lot of money behind you," said Oisín Geoghegan, head of enterprise in the local enterprise office (LEO) in Fingal. "It mainly comes down to the skills of the job, the tools of the job, and your ability to provide the service. It costs anything from a few hundred euro and upwards to set up a basic business."

If you have anything from a few thousand to up to €10,000 behind you though, what businesses could you set up?

Coffee stall

It should be possible to set up a coffee stall in a farmers' market for around €10,000, according to Bobby Kerr, the founder and ex-chairman of the Insomnia coffee chain and a Newstalk presenter.

"Whatever your first business is, it should be set up cheaply," said Kerr. "If I were setting up a coffee stall in a farmer's market today, I'd be looking for second-hand equipment and for people to lend me stuff. So get a second-hand coffee machine - or else rent one out. Renting a machine will give you a safety net if the business doesn't work out."

Some of the main overheads with a coffee stall include a coffee machine, coffee counter, signage, ingredients for producing the coffee, utensils, cups and condiments, insurance and rent.

"A good coffee machine would cost between €3,000 and €4,000, a counter would cost about €2,000 and you can expect to pay about €1,000 for signage," said Kerr. "You'd also have the cost of opening stock - such as cups and so on. If you're setting up a coffee stall in a farmers' market, €10,000 would be a reasonable budget to work to."

The cost of renting a space in a farmers' market varies hugely, depending on the market. It could cost a couple of hundred euro or more a month to rent a space for a hot food stall in a large farmers' market. For example, it costs either €260 or €300 a month plus Vat to sell hot food from a stall in Dún Laoghaire-Rathdown's county council markets - depending on whether or not you need electricity. It can be much cheaper to rent a space in a rural farmers' market, particularly if it's a small market. It's important to negotiate the best rent you can for your stall.

It's also vital that you present your stall well so that it attracts customers. "Produce something which is high-quality - and which stands out from the crowd," said Kerr. "Make sure your stall looks different and better than other coffee stalls. Your two biggest challenges when starting out in business are keeping costs down - and getting the sales. The other stuff will sort itself out."

Remember you must register with the Health Service Executive - so ensure that your stall meets health and safety standards. You may also need to get a trading licence.

Food producer

Should you wish to set up a business producing and selling your own food, you'd need anything from €5,000 to €10,000 and upwards behind you to get the basic business running.

"The food production sector has quite low barriers to entry as a lot of people can start to produce food from home," said Geoghegan. Some of the main costs you'll face if producing food at home include the cost of making the food - and ensuring you meet health and safety requirements when doing so; and the cost of equipment, insurance and marketing. Packaging is also important. "Consumers won't buy your product unless it looks good," said Geoghegan. "Packaging alone could cost €5,000 and upwards - that's a big cost for a food producer. There are, however, cost-effective designers of packaging and people who will help you to get your packaging right. If you want to become a significant food producer, you will typically have to sell through retailers - and you could struggle to get your product on the shelves so you need to have the packaging that will attract consumers to buy it."

When initially starting out as a food producer, one of the cheapest ways to sell your food would be through a country or farmer's market. Consider taking the Food Starter programme (a programme run by LEOs in conjunction with Bord Bia) if you want to set up a food business.


Dragons' Den star Gavin Duffy believes gardening could be a good opportunity for someone who wishes to set up a business with low entry barriers and low set-up costs.

"A generation or two ago, there was always someone going around houses and offering to mow the lawn," said Duffy, who is also managing director of Gavin Duffy & Associates. "These people are not as prevalent today. So there's more demand for gardening maintenance and landscaping services."

You could set up a basic gardening business for less than €1,000 - depending on the type of equipment and tools you need. A good lawnmower could cost a couple of hundred euro and upwards. However, a good ride-on mower - invaluable if living in rural areas - could set you back €4,000 or more, though you could rent one. Getting public liability insurance would be wise.

Due to the seasonal nature of gardening, you would need to make most of your money over the spring and summer. "If you get into grass-cutting, don't overlook the value of putting up a sign with your mobile number on it when you're on a job," said Duffy. This should win you more customers.

Appliance fixer

There's huge demand for people who can fix domestic appliances (such as washing machines, dishwashers and fridges), according to Duffy. To set up such a business, you would need around €5,000 behind you, Duffy believes. You'd also need the skills to fix domestic appliances -and you may need to specialise in certain brands. Ideally draw from your experience - you may have worked with a domestic appliance firm and built up the know-how to fix such appliances.

Get your pricing right. "You'd need to charge a minimum call-out rate - of no less than €60 - if you go into this line of business," said Duffy.

Property upkeep

Duffy believes there is a gap in the market for a business which regularly maintains properties. Such a company would line up the tradespeople needed for property maintenance, such as painting, plumbing, electrical work and household repairs. "Some people have had great success when setting up such businesses online," said Duffy. "You should be able to set up a business like that for less than €10,000."

You would need to build up a bank of 10 or 12 very good tradespeople, advised Duffy. You would then secure jobs for them - and take a cut of the money earned by the tradespeople for those jobs. It would be important to establish a strong online presence and to market your business well. "If you have a budget of €10,000 to set up a business, set aside €3,000 of that for marketing," said Duffy.

You're likely to be surprised at the demand for tradespeople if you set up such a business well. "There's huge demand for good quality trades people - such as plumbers and electricians - at the moment as our country isn't producing enough of them," said Geoghegan. Once you've decided on the business you want to set up, remember that getting it off the ground is just the beginning of your journey.

"It's very easy to set up a business but making it long-term viable and profitable is a different thing," said Geoghegan.

So get ready for a lot of hard work if you're about to become your own boss.

Survival tips for your startup

Be frugal

"Be as frugal as you can be in the early days of the business," said coffee entrepreneur Bobby Kerr. "Your prospects of survival are best if you keep costs down and do it cheaply."

Avoid renting

Avoid renting a business premises if you can, as rental costs are often huge. You could easily pay €10,000 a year to rent a small office in or near Dublin city - and multiple times that for a larger office.

"If considering renting an office, ask yourself do you really need one," said Oisín Geoghegan of Fingal's local enterprise office. "If you can work from home, that will be an immediate saving [to your business], as you won't have to pay rent. If you are looking to present your business professionally, there are ways to do that without paying huge rental costs."

You can usually rent an office or hot desk in your local enterprise centre for a fraction of the cost of renting elsewhere. By doing so, you should also be able to book low-cost or free meeting rooms in the centre.

Should you wish to have a business address and post box, you may be able to arrange one through your local enterprise centre. It could cost a couple of hundred euro a year or less to get a business post box through your local centre.

Rent for a small office could cost a few hundred euro a month while a hot desk could cost €50 a week though costs will vary, depending on the enterprise centre.

In the Balbriggan Enterprise and Training Centre in north Dublin, it costs €311 a month (including Vat and rates) to rent a small office suitable for four people. In the Drinan enterprise centre in north Dublin, it costs €475 a month (including Vat and rates) to rent its smallest office.

Tackle insurance

Be ready to tackle insurance. "A lot of small pop-up shops and casual stalls will struggle to get a quote from an insurer," said Neil McDonnell, CEO of Isme.

As insurance costs for small businesses could run into tens of thousands - and in some cases, hundreds of thousands - a year, many small businesses have been forced to close.

When setting up a small retail business, you may be able to get a basic insurance package (known as a small package policy) from €500 a year - plus the 5pc Government levy, according to Sven Spollen-Behrens, director of the Small Firms Association.

Such packages are often sold by brokers. A tradesman who is starting out could get basic insurance (covering employer's and public liability insurance) for from €1,000 a year - plus the Government levy, according to Spollen-Behrens.

"The challenges that small business face is where the cost of their insurance premium increases if a claim is brought against them," said Spollen-Behrens. "Premiums normally increase as a result of a claim." Your premium could even surge if your business has never had a claim taken against it.

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