Press release

New Enterprise Allowance unleashes a wave of entrepreneurs

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

4,560 businesses have been launched thanks to a Government scheme to help entrepreneurial jobseekers.

A tapas restaurant, tattoo parlour, party entertainer and removals company are among 4,560 businesses which have been launched thanks to a Government scheme to help entrepreneurial jobseekers, Employment Minister Chris Grayling has revealed.

The businesses have started up thanks to the New Enterprise Allowance, which partners jobseekers with a mentor to draw up a business plan then gives them financial support to help them through the early months and the number is growing all the time. Hundreds of new businesses are now starting up every week under the scheme.

Thousands more would-be entrepreneurs have started working with a mentor on their plans and could be among the next to set up their business.

Claimants to start trading so far include:

  • Robert Warrior, 45, who set up Finos tapas restaurant in Southport after losing his job managing a group of hotels in 2011. The restaurant employs 22 people.
  • Star Wars fanatic Neil Matthews, 36, who has turned his hobby in to his dream job after a year out of work by setting up a business repairing replica props from movies.
  • Dominic Cox, 40, who is looking to take on his son as an apprentice after setting up a business as an electrician after 18 months out of work.
  • Former Pontins blue coat Matthew Brown, 32, who has returned to his first love and set up his own entertainment business after losing his job in 2011. He has already secured contracts across the West Midlands including for the Queens Diamond Jubilee celebrations.
  • Hayley Thomas, 29, whose play centre, on-site cafe and pre-school nursery in Haverfordwest employ 17 people. She set them up after losing her job as an NVQ assessor last May.

Now the Government is considering whether the rules can be changed to give jobseekers access to a mentor after three months on Jobseeker’s Allowance (JSA), rather than having to wait six months.

Employment Minister Chris Grayling said:

I’m delighted that hundreds of businesses are setting up every week thanks to our New Enterprise Allowance. Even in tough economic times there are opportunities out there and we’re ready to back those who have an idea that can work and the can-do attitude to make it a success.

With 4,560 businesses up and running we’re already helping to unleash a new wave of entrepreneurs. I want to make the support available sooner so we can help even more people realise their dreams and become their own boss. Now we’ll look at how we can make this happen.

Other businesses set up so far include mobile app development, beauty therapy, dog grooming, cake making, gardening, architecture and physiotherapy.

Currently claimants have to be on JSA for six months before getting help to develop their business plan. When they have produced a viable plan they can access an allowance of £65-a-week for another six months and have access to a loan of up to £1,000 to help with start-up costs.

The Government is now exploring whether to offer claimants given access to mentor support after three months on JSA.

Robert Warrior, who set up Finos Tapas restaurant in Southport thanks to NEA, said: “My mentor was invaluable, he was always offering me great ideas and advice, and the financial assistance was obviously very helpful in setting up the restaurants.

“I’m also pleased that I’ve been able to create so many jobs as a result of opening Finos, I plan to offer further opportunities via work experience and apprenticeships.”

Notes to editors:

  1. Latest statistics show that there were 4,560 starts to the New Enterprise Allowance weekly allowance from April 2011 to the end of February 2012. The scheme was launched nationwide in August 2011. During the same period there were 12,050 starts with a New Enterprise Allowance business mentor.

  2. Businesses started so far include:
    • Joiner
    • Property Maintenance
    • Gardener
    • Personal Fitness Instructors
    • Beauty Therapists
    • Childminder
    • Hairdresser
    • Internet Sales
    • Dog Groomer *Courier Business
    • Web designer/Illustrator/Printer
    • Film Maker
    • Spanish Tutor
    • Landscape Gardener
    • Mobile App Development
    • Bricklayer
    • Reflexologist/Indian Massage *Fish Bait Manufacturer
    • Sound Engineer
    • Plasterer
    • Events Hospitality/Party Organiser
    • Martial Arts Academy
    • Tapas Restaurant
    • Stonemason
  3. New Enterprise Allowance (NEA) is available to Jobseekers Allowance (JSA) claimants aged 18 and over who have been claiming for 26-weeks or more.

Participants will get access to a volunteer business mentor who will provide guidance and support as they develop their business plan and through the early months of trading. Once a claimant can demonstrate they have a viable business proposition with the potential for growth in the future, they will be able to access financial support. This will consist of:

  • a weekly allowance worth £1,274 over 26 weeks, paid at £65 a week for the first 13 weeks and £33 a week for a further 13 weeks, and
  • the facility to access a loan of up to £1,000 to help with start-up costs, subject to status.

The total package of support could be worth up to £2,274 to each participant who starts their own business.

Case studies

Robert Warrior, Finos Tapas restaurant, Southport

Southport man Robert Warrior says ‘hola’ to running his own business thanks to the New Enterprise Allowance. 

When 45 year old Robert Warrior lost his long term job managing a group of hotels in 2011, he found it hard to get similar work and after a year of being unemployed approached Jobcentre Plus for help with an idea of becoming self employed.

His Jobcentre Plus advisor referred him to NEA so he could pursue his idea of opening a Spanish Tapas restaurant.

With the guidance of a volunteer business mentor and a weekly allowance to help during the early stages of the business set up, ‘Finos At the Water Front’ opened eight months ago. The tapas restaurant has gone from strength to strength and now employees twenty two people and has regular ‘brilliant’ reviews on its website.

Robert said: “ My mentor was invaluable, he was always offering me great ideas and advice, and the financial assistance was obviously very helpful in setting up the restaurant. I’m also pleased that I’ve been able to create so many jobs as a result of opening Finos, I plan to offer further opportunities via work experience and apprenticeships. “

Neil Mathews, London-Sabres, Ealing

Star Wars fanatic Neil Matthews has turned his hobby in to his dream job thanks to the New Enterprise Allowance. 

Mr Matthews, 36 had a variety of jobs, from working in the retail sector to being a nightclub door man before he found himself unemployed.

After a year without work, he discussed turning his life long love of all things Star Wars in to a job with his Jobcentre Plus advisor, who referred him to New Enterprise Allowance (NEA).

Neil’s NEA advisor helped him develop his idea of setting up a repair service for replica props from the Star Wars movies, with a comprehensive business plan, a personal survival budget and a 3 year cash-flow forecast.

He was also eligible for £1,000 NEA loan to finance necessary tools, equipment and components needed to set up the new business.

Neil launched London-Sabers in February with additional services offering a design, fabrication and assembly service for unique custom items. Since his website has been up and running work orders have been pouring in from all over the UK, and even France.

Neil said: “Before I had help from NEA, I was struggling to survive. My father passed away several years ago and with my mother retired, the only financial support we had was her pension and my benefits - we were in debt.

“Now I find myself living my dream and even have a stall booked at this years London Film & Comic Convention and the Time War event in Leeds at the end of October.

“Thanks to the Jobcentre and NEA I have an opportunity to help support my family and finance my wedding in 2014 by doing something I love.”

Dominic Cox, Electrician, Huddersfield

Lone parent Dominic Cox has set up his own business as an electrician thanks to the New Enterprise Allowance - and now he is even looking to take on his son as an apprentice.

Mr Cox, 40, had been out of work for 18 months before his Jobcentre Plus advisor referred him to the New Enterprise Allowance (NEA).

He received funding to complete the training he need to register as an electrician, and took out a £1,000 loan so he could buy a van and pay for other start up costs.

His business ‘DC Electrical services’ launched on April 17, 2012 after his mentor helped him develop a viable business plan.

Mr Cox said: “Going back to work has helped me to provide for my kids better and given me a purpose in life. My NEA mentor and the enterprise club were always available to help me and the support has been great.

“My eldest son, who leaves school this year has been accepted as an apprentice electrician at Huddersfield college which means I can take him on as an apprentice in my business. The NEA will have helped get two people into work, myself and my son.”

Matthew Brown, entertainer, Tamworth, Staffordshire

A former Pontins blue coat has set up his own entertainment business with the help of the New Enterprise Allowance.

Matthew Brown decided to go back to his first love of ‘entertaining’ when he became unemployed in June 2011 from a job in customer services.  He had always loved being in the lime light and was a regular performer at working men’s clubs and bars around Tamworth in his spare time. 

The 32 year old was referred to NEA where he participated in business mentoring for eight weeks which helped him produce a comprehensive business plan and provided innovative ideas about how to launch his new business. 

Matthew is now two months into his new business venture called ‘Dark Shadow Entertainment’ which provides a variety of entertainment including singing, compering, dj-ing and karaoke. He has secured contracts in various venues across the West Midlands including the prestigious Queens Diamond Jubilee celebrations in Tamworth on June 5th, where he will host an interactive quiz show.

Matthew said: “I can’t praise the NEA scheme enough. I’ve wanted to start my own entertainment business for years but it’s only with the security of the weekly NEA payments that gave me the push to actually do it. I’m still in the early stages of being self employed but I’ve already got lots of work booked and it’s something I absolutely love doing.” 

Hayley Thomas, children’s play centre, Haverfordwest

For Haverfordwest entrepreneur, Hayley Thomas, the memory of being made redundant and consequently losing her home is something she’ll never forget. But the 29 year old credits the experience as the catalyst for a transformation that now sees her running her own local business and employing 17 members of staff, many of which had spent time in the same dole queue as her.

Having lost her job as an NVQ assessor last May, Hayley spent the following few months in the height of the recession competing for jobs, that were few and far between.

“I applied for loads of jobs but was getting nowhere” said Hayley. “It got to the point where I couldn’t do any more. I was being told by my adviser that my CV was excellent, and that I had plenty to offer, but I still couldn’t get a job.

“So I just went home one day and said to my family that I was going to start my own business. My brother got involved and became one of my business partners, and I haven’t looked back.”

With fond memories of time previously spent working as a holiday rep, Hayley wanted to try and bring that holiday feeling to Pembrokeshire. So in March this year she opened the Lion’s Den, a children’s play centre on Snowdrop Lane, that gives parents the chance to pack their bags and relax, while their kids run riot in safe surroundings filled with slides, soft play areas, and all sorts.

“I never really enjoyed working as an NVQ assessor, so in a way being made redundant was the best thing that’s ever happened to me” said Hayley. “This is what I want to do, and I’ve worked really hard to be where I am now.

“But I’ve had some fantastic support too from my family, the local Jobcentre, and my business mentor at A4e.”

The Government’s New Enterprise Allowance (NEA) was a deciding factor in whether or not Hayley’s business dreams could become a reality, and she is grateful for the safety net it provides her.

Hayley said: “There are times during the year where we see a drop-off in the number of people using the play centre. That’s natural for this kind of business, so we run a pre-school nursery on site too, which is busy all year around.

“The money I get through the NEA is extra security for me at the moment, which is great - especially early on in the life of the business. To know I get that £65 every week, regardless of how busy the centre is, is a real benefit.

“The support is there through the Jobcentre, I just don’t think people act on it. Anyone can do what I have done if they put their mind to it. If you just sit back and wait for things to happen it never will.”

Between the play centre, on-site cafe and pre-school nursery Hayley - just three months after opening the Lion’s Den - employs 17 members of staff in total, and is currently looking for a further two recruits to help with the nursery.

“We’ve got a mix of full and part-time staff across the three sections of the business,” said Hayley. “All of my full-time staff were unemployed like I was before I took them on. It just worked out like that, and I couldn’t have asked for a better team.”