Government scheme proves to be the business for job-seeking entrepreneurs

The majority of entrepreneurial jobseekers who became their own boss thanks to a government scheme are still in business

A survey of 1,500 participants of the New Enterprise Allowance (NEA) published today (28 January) shows that 80% of ventures started with NEA support are still trading – with more than 9 in 10 of these going for more than 12 months.

Around half of respondents report an expansion in their customer base (55%) or an increase in turnover (47%) since starting their business. The majority of survey participants also say they have plans to grow their company in the coming years.

Employment Minister Priti Patel said:

“This government is determined to help jobseekers with real entrepreneurial ambitions turn their ideas into successful business ventures which create new jobs, boost productivity and contribute to long-term economic growth.

“The first year of trading is considered the most challenging, so I’m delighted that through our New Enterprise Allowance and added support services we are helping businesses stay on track and grow 12 months in.”

The NEA initiative is delivered through Jobcentre Plus and offers expert mentoring and financial support to jobseekers, lone parents and people on sickness benefits who have a good idea to set up their own business.

Set up in 2011, the latest statistics show almost 77,000 businesses have started with NEA funding and support.

Furthermore, 1 in 5 (20%) of all businesses created using the NEA have been set up by benefit claimants with a disability. The NEA survey found that recipients started businesses in a wide range of sectors including retail, car repair, construction and professional services.

The NEA survey also found:

  • Of those that received support from a mentor, the vast majority (83%) rated it as helpful in supporting them develop a business plan
  • Two thirds (66%) of respondents did not access any additional support outside of the NEA scheme at the time of developing their business plan, suggesting that for most, the NEA scheme provided sufficient and appropriate support
  • The payment of the NEA weekly allowance was commonly highlighted by respondents as being a critical factor in enabling them to start their business

NEA case study

For Winsome Duncan, the New Enterprise Allowance was a stepping stone to helping other people find the job of their dreams.

The 38-year-old from Southwark was recommended to take part in the scheme by her work coach in 2013 after she told them she wanted to help others gain skills and become more employable.

After developing a business plan to hold employability workshops and receiving a £1,000 loan from Jobcentre Plus, Winsome also wrote a book “100 Ways to Save Money: An Employment Guide”, offering advice to young people and ex-offenders looking to get on the career ladder.

Her business MPLOYME is now in its third year and employs 3 people part-time out of their base in the Pempeople pop-up shop on Peckham High Street.

Winsome said:

“The NEA programme saved my life. It gave me a living and helped me to put food on other people’s tables as well as my own.

“I am forever grateful to the programme, it’s definitely life-changing.”

The business continues to expand, and Winsome wants to find her own office space for the business.  She added:

“You have to be dedicated and committed to make it work, and I would advise anyone looking to start their own business to look at the NEA.”

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