One of the few positive legacies of the past two years of economic turmoil is likely to be a growth in indigenous industry as enterprising individuals opt to strike out on their own. The fat pay cheques of the boom years meant that entrepreneurial spirit took a back seat but with unemployment rising and new jobs scarce, an increasing number of people are taking the leap to starting their own business where they can be their own boss and the chief beneficiaries of their own hard work.

And it certainly will be hard work – starting your own business is no picnic and this is a particularly hard environment to do it in. Survive the recession, however, and, it's likely that your business will be around for a long time. The first thing you need to do is establish whether or not your idea is viable, develop a business plan and figure out how much money you will need to get started. Then you will need to source funding.

For a lot of people, that will mean dipping into their own funds – whether that be a redundancy package or savings – and tapping their family and friends for support. People also turn to their local bank manager and surprisingly, given that we are in an environment where the banks are widely believed to be reluctant to lend, new businesses are one of the few sectors which is successfully securing credit. Patricia Callan, director of the Small Firms Association, says that the banks are recognising that supporting start-ups now can result in substantial rewards down the line.

"They are aggressively competing in the start-up market. It tends to be a low cost entry for them – they view the investment initially in getting someone into their business bank as sufficient to be enticing because even though there is a bank switching code now, people rarely swap once they have signed up," she said.

A substantial number of business accounts have been opened with the main banks in the last year and they are attracting customers through initiatives including the suspension of charges for a set period, lower interest rate charges and supports like online education and free memberships of professional bodies. With most start-up businesses requiring limited funding – the cost of setting up has come down substantially in the recession – it makes good sense for the banks to take a punt on them.

Private equity as a source of funding is becoming increasingly important to Irish business. Venture capitalists and organisations like the Business Angels Partnership which connect investors with entrepreneurs are an alternative source of funding which can bring added value to your business through their own experience.

"We were so heavily reliant on bank finance here that the venture capitalist market and the Business Angels really did not get a look in but now I think people are looking more at those models. Irish people traditionally did not like to take equity investment, they just wanted to do debt but that will have to change. Elsewhere equity is a major part of getting cash injections into companies, so, that is something that people will have to change psychologically," said Callan.

Before you go to the bank or look for investors however, you should first explore what grants and financial supports are available to you from the state. There are a wide variety of organisations throughout the country which, depending on the nature of your business, may be in a position to provide some funding at the start-up stage. The Department of Enterprise, Trade and Employment recently announced moves to broaden the financial supports available through the county and city enterprise boards allowing them much more flexibility in how they can help start ups.

"This is a great boost for the many first-time-unemployed individuals who need just a modest financial boost to allow them to realise their entrepreneurial ambitions. There are a lot of generous state supports for early stage companies. These enable the preservation of income for individuals starting all sorts of new companies and also allow the recouping of income tax previously paid for the purposes of investing in the venture," said Pearse Coyle, a specialist who runs a support initiatives for spin-out initiatives. Spin-outs involve creating new ventures based on technologies and services developed for or within larger companies which may be marketable elsewhere.

It is important as well that you take the time to sort out the legal structure of your business and any tax issues arriving. It is better to do this straight away rather than waiting to discover possible opportunities missed and mistakes made, says Niamh Keogh, consultant with Astons Tax and Wealth Consultants.

"Time spent on such issues at the outset allows people to focus on important matters such as making the business idea work, with the security of knowing that your tax and legal affairs are in order. The starting point is to decide on the legal structure of your business. Will you be a sole trader, a partnership, or perhaps a company? You should be clear on the reasons why the particular structure suits you. This decision will determine registration requirements and how your business will be taxed on its profits," she said.

This is important because if you are a sole trader, you will be subject to income tax at the 20% and 41% rates but a company will pay corporation tax of just 12.5%. The government also introduced a corporation tax exemption for new companies meeting certain requirements. Tax issues are also not the only consideration – for instance, there are additional reporting obligations that come with a company structure.