Press release

Aspiring entrepreneurs helped to kick-start new businesses

More jobseekers will be given help to set up their own business under a scheme aimed at unlocking the potential of aspiring entrepreneurs.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

33,000 extra jobseekers will be given help to set up their own business under a scheme aimed at unlocking the potential of aspiring entrepreneurs, Prime Minister David Cameron announced today.

The New Enterprise Allowance scheme, which provides expert coaching and financial support, will be extended and made far easier, in a bid to get behind those who have the determination to start up their own business.

People will now have instant access to support when they claim Jobseekers Allowance, ending the six month long wait people have to currently spend on benefits before they qualify for start-up money.

The New Enterprise Allowance will be expanded so 70,000 people can now get help from a mentor, following a strong uptake in the first year that has seen more than 8,000 businesses set up by jobseekers across the country, including a mobile dog grooming business, a fine chocolate company and a tapas restaurant.

People will be able to start working with a business mentor from their first day on Jobseekers Allowance (JSA), instead of having to wait for three months, and those who produce a viable business plan will be able to get funding straight away. Currently jobseekers must wait six months for the financial support, which is worth more than £1,000 over six months to help with start-up costs.

The Prime Minister David Cameron said:

If Britain is to compete on a global stage, we must do all we can to support budding entrepreneurs and build a nation where everyone aspires to great things. “I am determined to get behind people who have ideas that will work and a can-do attitude that will turn those ideas into successful enterprises. “It doesn’t matter what your background is or whether you are out of work, if you are prepared to work hard and aspire to achieve more, this Government, through schemes like the Enterprise Allowance, will back you.”

Employment Minister Mark Hoban said:

We have already seen huge successes with more than 8,000 businesses up and running since we launched New Enterprise Allowance. I want more people to get advice on becoming self-employed, and for them to get that advice sooner.

This will help those unemployed people who have a real drive to get on in life, and shows our determination to promote growth and enterprise.

Under New Enterprise Allowance, jobseekers interested in setting up their own business are teamed up with a mentor, giving them invaluable guidance and support in drawing up a business plan. Those who can show their idea is viable are then eligible for funding to help them get their proposal off the ground.

Jobcentre advisers have reported the scheme is extremely popular, and now an extra 33,000 places are being offered for people to develop their business plan with a mentor. In total, more than 70,000 people will now receive help from a mentor, and we expect up to 40,000 businesses to be created as a result.

The popularity of the scheme has also prompted access to both mentoring and funding to be offered to people from their first day on JSA, sweeping away barriers to people setting up their own business.

The scheme has a clear focus on creating sustainable businesses that have future growth potential and helps unemployed people to see self-employment as a viable route off benefits.

Businesses set up so far include:

‘Choc Amor’, a fine chocolate business. Paul Williams, from Leyland, had worked in the finance industry for 20 years, and set up ‘Choc Amor’ after being made redundant. Paul’s business has been such a success that after only seven months trading he is already having to move to bigger premises.

‘The Dog Groomer’, a mobile dog grooming business. After being made redundant from her job of 23 years, Lesley Bolton, from Blacko, Lancashire, decided to set up a business she has longed to establish since leaving school.

‘Eco-Kleen & Valet’, a specialist car valeting business. Simon Lunn, who spent ten months out of work, is now running his own business in Stafford thanks to Government support.

‘My Doggie Loves’, a luxury dog treats company. Vivien Nutt decided to set up a business after being made redundant from her job of nine years as a charity fundraiser. Vivien, who lives in surrey and has to juggle caring duties for her elderly mother, was attracted to the idea of being her own boss because of the flexibility it offered her.

‘Unity Counselling Service’, an independent counselling service set up in London by 38 year old Natasha Simpson.

Paul Williams, founder of fine chocolate company ‘Choc Amor’, said:

My NEA mentor was great; his vast knowledge of business start up was invaluable. “I have never worked so hard or such long hours in my life. I have never been happier, and it’s definitely worth it. The business is quickly building up a loyal customer base and is selling more than 15,000 bags of chocolate a month.”

Natasha Simpson, who found herself unemployed despite graduating with a BA Honours in counselling and psychotherapy, and decided to take the initiative and start her own business, said: “I already had the idea of setting up a counselling business, but I needed help to make my dreams a reality and that’s where the NEA came in.”

Vivien Nutt, who decided to set up a luxury dog treat business after being made redundant from her job of nine years as a charity fundraiser, said:

My business mentor was really good. I was struggling with the business plan, as I hadn’t done anything like that before. She was really helpful and suggested things I hadn’t thought of at all. “Setting up in business is hard, but I’m really enjoying it”.

Notes to editors:

  1. Today’s announcement means an extra 33,000 places are being made available on the mentoring element of the scheme.  This will ensure that we create up to 40,000 new businesses through the New Enterprise Allowance by end of 2013.
  2. Currently, people have to wait 13 weeks before they are eligible for referral to the mentoring phase of the New Enterprise Allowance - access to the financial support available under the scheme is at 26-weeks.  Today’s announcement means that jobseekers will be able to access both the mentoring and financial support from day one of their JSA claim. In addition, the deadline for new referrals has been extended from March 2013 to September 2013, which will ensure that the commitment to create up to 40,000 new businesses will be met.
  3. To be eligible to receive financial support, the claimant has to demonstrate that their business idea is viable. The financial support consists of a weekly allowance payable over 26 weeks’ worth up to £1,274. If they need start-up capital they may also apply for an unsecured loan of up to £1,000 to help them with start-up costs, such as buying their initial equipment. Participants can only access the NEA allowance and loan when they have a business plan which has been approved by the mentoring partnership.  In addition, to qualify for the support they must close their claim to JSA and provide evidence that they have commenced trading.
  4. The New Enterprise Allowance is one part of the Government’s flexible menu of support for jobseekers. Other measures include; The Work Programme, a payment by results employment programme which provides personalised support to the long-term unemployed. The Youth Contract, which includes 250,000 work experience places to help young unemployed people with little or no job history to get valuable work-based skills, 160,000 wage incentives, 20’000 extra apprenticeship grants, and support for the hardest to help 16 and 17 year olds.
  5. According to official statistics, at the end of May 2012 8,180 businesses had been set up.

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Published 17 October 2012