Did you set up a business on the 1980s self-employment programme, the Enterprise Allowance Scheme? What did you think of it?
Clarification added March 3, 2010:
Thank you all for responding to the question I posted here recently. The Enterprise Allowance Scheme of the 1980s and early 1990s was a scheme which experienced considerable success. I am most grateful to you all for your valuable responses which will be extremely useful to us as we look at a new drive to encourage the unemployed into self-employment for the 21st century.
I do agree with those of you that have noted that Government Business policy should by and large address itself to providing an extremely pro-business environment through lower taxes, better regulation and improved skills and infrastructure. My team have outlined what I feel are very strong proposals, including dramatically simplifying the business tax system, reducing the headline rate of corporation tax for companies of all sizes, and introducing regulatory budgets to keep red tape down. We also seek to stimulate the growth of start-ups during the first two years of a Conservative Government and we have pledged that any business set up in that time will pay no tax on the first ten jobs it creates.
Beyond the business environment however, I do also agree with those of you who said that there is a role for Government to play in encouraging a specific group of people into self-employment. A significant number of unemployed people, particularly during recession, have the potential to set up successfully on their own but do require some additional support both financially and through a strong network of mentors if they are to move off benefits and into self-employment.
You have here coherently outlined the main advantages and failures of the old Enterprise Allowance Scheme in achieving this goal. I note the importance which many of you attribute to access to good mentors and I also note concerns regarding the patchiness of this access under the EAS. These are certainly issues which we need to address.
Administrative problems from deadweight and displacement to taxation problems need to be looked at, and I am interested to calls to keep paperwork low. This is very much in line with our recent Better Regulation paper which genuinely seeks to slow the currently endless churn of new regulations coming out of Whitehall and to foster and to encourage that can-do culture.
One point I find interesting in your responses is the diversity of businesses which the EAS supported – from nurseries to theatres, a granite importing business, an osteopath, a music store and a computer company to name but a selection. It is also clear that there is significant diversity in the types of people who can benefit from this sort of scheme and I would say that the suggestion to encourage entrepreneurship amongst graduates is very worthwhile.
What is also striking is the passion and enthusiasm with which so many of you describe your involvement with the scheme. There are references to a feeling of ‘emboldenment’, and that under the EAS you were ‘masters of their own destiny.’ These points speak for themselves - a successful scheme which genuinely enables people to set up on their own, learn important business lessons, grow in confidence and go on either to develop their original business, or to move into alternative forms of employment or self-employment would be an extremely valuable economic and social asset to this country.
Thank you again for your valuable contributions. I hope that you will not mind if my team come back to you for any additional information or consultation which might be needed as we move forward with the policy process.
Yours sincerely,
Ken Clarke
Location specific: United Kingdom
Answers (68)
Richard F.
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I'm a bit young to have set up such a business but I do know that a number of my clients originally started their businesses under that particular scheme. Whether they would have done so with or without it anyway is a highly debatable topic.
Personally my opinion is that the EAS (much like its successor the "New Deal Self Employed" Scheme) is but one of many ways in which government has tried to get people off of the unemployment rosters through the injudicious application of "other people's money".
Although supporting the creation of small businesses is an admirable role for government it would far better to give them a leg-up by lowering their taxes rather than throwing taxpayer's cash at them. In the same vein you could easily incentivise larger companies to hire more staff (especially those who have been on JSA for more than 3-6 months) by radically lowering the company's NI contributions for the employee’s first year of employment.
Clarification added February 3, 2010:
I heartily agree with the (far more coherent) comment from Richard Tyler below.
With the country facing the largest financial deficit in British history and with over £20K of government debt for every man, woman and child the last thing we need is another "scheme" that gets people off of taxpayer-paid benefits and straight onto taxpayer-paid grants.
Splashing out on a government scheme to promote small enterprise sounds like a wonderful idea (in theory) but we need to be 101% certain that these people will stay off benefits when the government cheques stop rolling in and we need to be 102% sure that we, the taxpayer, earn more from it than we’ve spent.
Hi Ken, I'm also too young andshare some of the same reservations as the author of the first comment. But there are plenty of supporters of the allowance scheme, from the Federation of Small Businesses, to Martin Bright - ex-News Statesman political editor - to twenty-something entrepreneurs like Rajeeb Dey http://www.enternships.co.uk.
Dey argues convincingly that providing graduates with an income to cover their transport and basic living costs would help more to pursue their own business ideas rather than turning to other benefits.
However, many of the businesses set up by the self-employed in the 1980s did not provide them with a long term living and many subsequently failed. With public money scarce, there is also a strong argument to be made that Britain does not need more businesses, but better ones with more growth potential that will create wealth, jobs and taxes.
I didn't set up business but did administer the scheme or at least a successor scheme. You may recall that the former Training & Enterprise Councils (TECs) took responsibility for EAS and were allowed to set their own eligibility rules and grant rates. In effect this generally led to some well meant but 'woolly' attempts at aligning businesses to be supported with local 'priority sectors' and/or less £ per person (e.g £30 pw for 26 weeks rather than the original £40 pw for 52 weeks)
As a serial evaluator of many self-employment schemes I would make the following points about EAS in the light of start-up schemes/policies since:
1. Deadweight was a big issue. In my experience a good proportion of EAS starts were by white-collar professionals taking advantage of universal grant availability who would have started businesses in any event.
2. Displacement was also cited as a big drawback (e.g. you have helped Hairdresser A start up and that has adversely effected Hairdresser B) though personally I never found much evidence to corroborate this view.
3. Can't recall exact stats – Enterprise Allowance was a long-time ago! My impression is that EAS actually had quite impressive survival rates, certainly better than other big national start-up schemes since such as Training for Work Enterprise or New Deal for Self Employment. I actually think this was due to wide availability of (generally) excellent free business advice from Enterprise Agencies which by and large have now been swallowed up by Chambers and Business Links; so post start support would be an issue.
So…in conclusion:
- a single national business start-up scheme would be a good move.
- Eligibility conditions in terms of both individual circumstances and types of business supported would be key issues; much of this boils down to whether any future scheme is seen as 'unemployment relief' or a 'business creation' measure.
- I actually think that targeted support for unemployed people entering self-employment is a legitimate use of G money. Actually if you take a longer term view than the contributor from the Telegraph does it could actually save the Exchequer money – witness the success of schemes that enable people to retain benefits whilst launching business known as 'test trading' or 'income bridge' programmes. Otherwise the dreaded 'benefit trap' ensues.
Mark L.
Head of Tax Director Network, Chairman of Tax Advice Network, Public Speaker, Author, Commentator and Blogger
Best Answers in: Organizational Development (1)
Sorry - again I'm not someone who used the scheme but I do have a view as to any successor scheme.
Clearly encouraging self employment reduces the jobless figures (assuming that the newly self employed declare their income and register as self employed).
However, many big businesses and Government bodies refuse to engage the self employed as they fear becoming liable for PAYE and other employment related obligations. This results in the self employed establishing personal service companies.
The self employed often simply supply their labour to their clients and customers. If we expect them to build up businesses that employ other people we need to do more than simply encourage them to start up as self employed.
Most self employed 'employers' would be advised to incorporate their businesses as limited companies or as LLPs. The rational being to limit the prospective commercial, liability and tax liabilities that follow from being an employer.
There is an increasing tendency to build businesses without taking on employees but to simply outsource everything - as I have done with the Tax Advice Network. All of our tax advisers are self employed as are all of our support service providers. Why would I want to expose myself to employment obligations and the additional cost of employers NICs?
Clarification added February 4, 2010:
As another contributor has noted below, the rules re job seekers' allowance mean this is not available to those of us who choose to set up a self employed business as we're not 'seeking a job'.
I wonder how many prospective self employed businesses are stifled due to this restriction? And how many people claim the allowance despite also trying to set up a self employed business in contravention of the rules as they are unable to find gainful employment. I assume the system penalises such initiatives due to the scope for abuse but it'sd still a shame.
I did set a small business in the early 80’s under the Enterprise Allowance Scheme. Although that business was fairly short-lived – I went into full-time employment about a year later – I did consider it to be useful and worthwhile. Without that incentive, I doubt I would have had the impetus to attempt such a daunting task. It also gave some financial security to help survive beyond the critical first few months.
Despite the brevity of that original business, it could be that the seed of enterprise was sown as, all these years later, I am again now running a business (far more successfully this time) that has given opportunities for several of today’s generation of young ambitious people to launch their careers.
Clarification added February 6, 2010:
Having read through the further answers and considered the negative as well as positive comments, I feel moved to expand on my own remarks.
Several contributors have been quite vociferous in insisting that government should not interfere in business, and in a sense they are right. It should not be government policy to increase the number of small businesses; market forces should determine this. Nor would I want my hard-earned tax money being handed out to professional business people who would be starting up a business anyway. But it very much is the duty of government to encourage people off state dependence – I’m even less happy about funding capable people to sit at home watching daytime television.
There is a vicious circle affecting the medium and long-term unemployed, whereby, as the period of time that a person is unemployed increases, the less attractive they become to a prospective employer. Often the only way out of this is self-employment, but by this stage many people are unlikely to have the means to sustain a start-up business. This is where government support can make the critical difference. In my own case, the security of knowing there would be a regular income, despite it being quite small, made the difference between going for it, or taking the perhaps safer option of doing nothing.
In this sense, it makes little difference whether the business becomes a huge, multi-million pound success, or merely opens up a route for the individual into further employment opportunities. The point is that it ends state dependence. And, for this reason, there should no onerous qualifying process. Indeed, it is essential for the success of the scheme that it should be simple and easy to meet the qualifying criteria. Perhaps as simple as; a minimum of, say, 6 months unemployment; and a genuine intent to use the funds to support a business – rather than merely using it as a way to slightly increase the amount of ‘dole’ money.
Getting capable people off state dependence benefits everyone. It raises the self-esteem of the individual; helps the economy by contributing to productivity (and nobody works harder than the self-employed); and helps the state by reducing tax liabilities. For such a small investment to help people out of a rut, the returns can be considerable.
Yes. I did. I set up my accountancy business in 1994, and found the E A Scheme really useful. Not just the financial help, but also the advice and help from local business people, and bank managers. I am now a small business adviser, and management consultant, and I am keen to help new start ups, and growing businesses.
Links:
Peter B. also suggests this expert on this topic:
I also set up my first enterprise with support of EAS in the late 1980s. As a young single parent in a rural area, it was frankly my only option at that time. I have gone on to set up and grow several ventures since and indeed for the last decade worked in enterprise support and policy development until starting up my own business again last year. EAS was a brilliant, truly client-focused scheme that supported and enabled a wide range of people to be enterprising. And of course it isn't just about new businesses, those entrepreneurial skills enhance employability and provide a resilience and sense of self-sufficiency which is invaluable in the 'flexible' economy.
I am personally very grateful for the support EAS gave me and from an informed perspective I do not believe that any of the schemes since would have enabled someone in my circumstances to have succeeded.
Subsequent welfare to self-employment schemes have been characterised by impossible bureaucracy, complexity and timescales**.
In fact the proportion of women accessing government funded enterprise support schemes in the UK is very low*. Not so for EAS, where 39% of participants were women.
* see links below to:
*'Who Benefits: the difficulties for women in making the transition from unemployment to self-employment'.
**Discussion of current users of New Deal for the self-employed.
Links:
Yes I did. 1983/84 Swansea, S. Wales. I was 19 years old.
The business didn't last though......... In all honesty, we had no real idea about what we needed to do to succeed. We attended a couple of courses aimed at helping develop a business plan, and setting up a company.
However, I do run my own small business today, and have done for the last 15 years. It must be the case that my early foray into starting a business actually did sow the seeds of confidence - and gave me the necessary self-belief do so in 1996 when I set out on my own once again.
Financially, the EAS put some 'pin money' in my pocket - but more importantly it gave me the encouragement (and perhaps even the 'permission' oddly enough...) to be bold, to stick my neck out, to take a risk and to have a go.
As Goethe said. "Whatever you can do, or dream you can - begin it now. Boldness has genius, power and magic in it. Begin it now."
The EAS emboldened me.
Yes I did. It opened doors and allowed me to understand business at a different level. I learnt a lot during that time. Personally, i think it was a great idea!! It gave people confidence they could achieve what they wanted, and be masters of their own destiny.
Lee
I did set up a business with Enterprise Allowance Scheme it was my first business and it opened my eyes to what could be, I went backed into employment 4 years later at a much higher level as a result of the experience i gaines but was always coming back for unfinished business.
It was the start of a serial entrepreneurship for me which has subsequently led me to starting a business from scratch which sold for $84 million( within 4 years and giving 100 plus people jobs) and being part of a team which sold a second technology business for more than $200 million complete with 400 employees on 3 continents.
You could write me off as a guy who would have done it anyway but it sure helped a little when I took the risk and was able to tell my long suffering wife who had just seen me bet our future, that at least so much was coming in on day one. like the first writer I believe it made it officially permissible and gave me the extra push to go for it .
The Enterprise Allowance and the associated support at that time for training and development was far more useful than the business link and retired middle level bank officials not wanting to give money away except to certainties that I encountered when I spent a sabatical year as Centre Director running the UKs first Telecomms Accelerator trying to give help to new starts in the global Telecomms business. We actually found it easier to get money out of the ' dragons den' for our companies than from so called softer sourcand given how self serving the 'dragons den' is that is a hell of an indictment.
My lasting impression of government support for start up businesses was of an ex bank emplyee now in business advisary position posturing about how he felt that he need to see the clients bleed to believe that they were fully committed the business, the biggest risk he had ever taken was lending £50,000 with complete security.
My opinion of many incubation environments is that they are managed workspaces trying to sell services to incumbent companies to pay for the real estate they own and build there own organisation. They are surrounded by an ecosystems of people trying to sell them things some of which are government subsidised.
The first rule for a new business is to survive so that is not helped by the cut taxes brigade because they dont survive long enough pay taxes if they dont get support at the beginning .
It is not all about suceeding first time, in the US it is acceptable to fail once or thrice and keep going back here you fail and you go personal bust so less people are going to try. to peopel who risk everything every little helps - and believe me the help most get is very little
As someone who will start a new business this year with my son to help him get his first taste of creating a business and ensuring that he doesnt believe that everyone who purports to offer him help is his friend, I would like to think that the UK is a positive place to start an intetnet marketing business if not we will simply move the operation elsewhere and fulfilment to Asia, its an electronics world.
Yes I did. It was brilliant and got my company ( Arc Theatre) started in 1984! I often tell people about how we got started, but this gave us the small but vital starting point. We borrowed the matching 1k from my parents and paid them back shortly afterwards. We had given up all other theatre work as actors etc to concentrate on building our own company - which was scary but exciting. We had gone on the dole at first ( about 30.00 per week) and with the EAS we went on to £40 per week as a basic salary from the scheme and then built up from there. 26 years on and we have a thriving company - 8 members of staff as core team and over 60 associates on regular contracts. For us it was a brilliant scheme. Carole Pluckrose - Artistic Director/CEO Arc Theatre
I didn't use EAS but I did set up a small construction sector business in the early 80s. I had two short periods of employing staff but spent most of the time contracting my services directly into various niche categories, mainly for cashflow reasons. I'd agree with the comment made elsewhere that most such start-ups tend to end up simply contracting their services because the balance of cash-flow, risk and margin simply isn't viable. There are also long-term problems with professional development.
Clarification added February 8, 2010:
reading the responses below, I'd go along with the overall trend. The Thatcher administration did a great deal to promote self-employment, as opposed to direct employment, in the construction industry. Much of it was unsuccessful, and it was the main driver for the rapid downward spiral in earnings in the 90s recession - you had no rights or security at all, not even the right to be paid if your de-facto employer went bust.
Clarification added February 8, 2010:
so, if you want to help start-ups; start with a major purge of politically-motivated non-jobs in the public sector. Ditch the paperwork they spend their lives creating. Rein in HMRC, especially in respect of IR35. Spend the proceeds on capital expenditure, because no start-ups can survive of there is no work.
Clarification added February 8, 2010:
next, stop printing work permits for overseas contractors. Anyone importing so-called 'essential skills' to provide training alongside for a UK resident to learn the job, take it over and do away with the requirement for the 'import'.
Ken
I set up a granite importing business in 1989/91 to mine and bring rranite into the UK from India. The £40 a week was really helpful as was the Housing Allowance. Unfortunately I knew little about granite so the business failed, and it took me a little time to learn business skills since then. I now have set up a business in an area I do understand - content rights management:
https://www.rightsmanagementsystems.com
I have done this on my own as it is too complicated (pls read impossible) qualifying for any businesslink or SEEDA grants. At least your system provided some cash
Love the Jazz show on 4
Jason
Tim W.
COO, Certus Solutions (UK) LLP, Oracle ACE, Oracle HR/HCM, Fusion Applications Consultant
Hi Ken, I didn't use this scheme, but did set up a small company in the 80s. Although it's a bit off subject, whilst agreeing that encouraging people to start their own businesses is a good thing, I think more fundamental barriers need to be broken down to make it easier to do.
Over-regulation, complicated tax regimes (e.g. IR35) and a lack of government willingness to really open up govt. procurement to SMEs all contribute to the difficulties for small businesses while at the same time expanding the size of government.
I'm hoping the next government addresses those issues!
Hi Mr Clarke, I had applied in the very late 80’s for the scheme, but due to my circumstances or the requirements that where needed, I was turned down on two occasions.
The criteria should have been more lenient or taking into account the business and the individual, however I seem to see the same problems today for individuals that want to start their own businesses. With the help of Business Link one can get their Business Plans looked at and advised, but the criteria is still high for the individual.
Even for small businesses that wish to expand the government bodies are of no real help unless you reach a certain turn over, but not just this Mr Ivan Lewis had recently commented on a 10-year Development Partnership Arrangement with the Government of Yemen with an agreed indicative amount of £105m. For the last one year I have been trying to enter the Yemeni and Libyan market, when contacting Mr Lewis for additional information there is no response and one cannot find the information required from HM Government as to aid British business to succeed in these foreign countries. So as a voter one feels that the present Government has not and will not address these issues and the following party that will be our Government may do the same.
So our TAX goes out of England and yet we cannot enter into the market that our government has helped to build.
Ken I didn't but I have been trying to set up my own business for a year following redundancy.
Under this government everything is difficult. I was on a £100k + package so was reluctant to fall back on the state. I went onto jobseekers and due to a lack of job opportunities decided to do something for myself. As soon as the words self employed left my lips I was off the jobseekers books. The 19 year old handling my case got to me to sign something without telling me there was any assistance. Pointed me to businesslink who wanted to charge me to join their club..... and give me access to the other members. So many hoops to jump through. So how would I fund the time to set up the business and find customers and close sales ( of sales training and development) I needed a loan. Was told about the EFG scheme ( name has probably changed again) where govt will guarantee 75% of any small business loan. In April 2009 Speak to Lloyds, HSBC, Barclays Nat West , nobody knew anything about the scheme. Eventually get to speak to the business managers. Lloyds thought it was a great business plan but couldn't support it as I didn't have an income and had other debt....they judged it on personal credit criteria and actually preferred to just do their own loans, Apparantly as I had assets I didn't qualify for the government scheme, had debts so didn't qualify for theirs. Asked how many they had done, they said not many ( so none then ) It is just a scam by the government to wave a flag that they are helping small and startup business......it is rubbish. Don't get me going on jobseekers Mortgage support and all the other tricks they play in the name of supporting people. They are the masters of setting up something with 10 criteria for qualification only for you to find there is actually an 11th that you can't possibly meet.......
I was made redundant in November 1989 and at the time I was a Technical Director of a multinational IT/Telecoms company. Unable to get any employment I signed-on to receive unemployment benefit. After a month I was told that I had to attend a course and then be able to set up my own business (and taken off the unemployment register) and receive a £1000 overdraft limit from Lloyds Bank. I attended the course (one day) and setup a one man consultancy company and approached Lloyds Bank for the bank account and overdraft facility. They refused to open an account for me (forget the overdraft facility!) on the basis that I was a start-up business with no income and was in effect unemployed! I am still a one-man company acting as a contractor / consultant in the IT/Telecoms industry and have been plagued by government legislation (such as IR35) which tries to stop free enterprise. Hopefully, a Conservative government will get rid of such legislation.
Linda P.
Author of LinkedIn Made Easy, Social Entrepreneur, Social Media Strategist, Speaker & Hysterectomy Association Founder
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Wow, that takes me back a bit. Yes, I did set a small business in 1986 under the Enterprise Allowance Scheme. It was my first experience of being in business and I was a naive 26 year old with little understanding of what I was letting myself in for. But, we had the most wonderful mentor on the training course who really guided the whole group through the basics and it's advice I still rely on when working with clients now.
I sold the business about three years after starting it after growing it to 16 members of staff and as far as I know it's still going strong now. It taught me such a lot about what a 'good' business looks like and how important client/customer relations are. The mentor was also the first to encourage me to think outside the box and as a result I set up some slightly different ways of working so that my staff (who were mostly women with children) wouldn't have to give up work during school holidays - in fact you could say it encouraged me to be a bit of a pioneer in the area of workplace creche facilities.
I can honestly say that I wouldn't be doing what I'm doing now, being the person I am with the values and ethics I have, without the experience of going through the programme that I had. I also believe it fitted me for being a social entrepreneur in the widest sense of the term.
Linda
Links:
Yes I did use the EAS to set up my first business. Although the business did not last in it's initial incarnation, I found the scheme to be extremely helpful, not just because of the financial support it offered, but the workshops I attended taught me so much and the people I encountered were an inspiration for me. I think the experience did have a very positive impact at the time, I was 19, and since then have gone on to start and become involved with many businesses and continue to do so. I think it promoted and nurtured very effectively the spirit of entrepreneurism.
My wife set up a music publishing business under the successor to the Enterprise Allowance Scheme that was managed by the TECs. The financial element was useful in the early weeks whilst a customer base was established, but far more valuable was the training and on-going mentoring support. The business ran successfully between 1993 and 2004, at which point my wife wanted a change of direction, so bought into a franchise opportunity and is, therefore, still self employed.
Business start up support is an excellent concept and one that should be widely available to those seeking to start a business - but...
...it only has value if those businesses are supported beyond their initial start up phase.
I don't think the scheme is running in the same way as it did with regards to finincial help - which is a pity. However, I have attended the Business Enterprise Planning workshops in Bolton which I got a great deal out of. I was fortunate enough to meet some good contacts and have just recently employed someone who was on the scheme to set up my website.
I do believe that a grant should be available to people setting up in business to get them off the ground especially in these tough times. I was fortunate enough to have inherited some capitol but not everyone is. Getting a business loan from a bank these days can be very difficult, especially for people living in rented accomodation. The companies who do give loans out easily charge high interest rates which can be crippling especially for small businesses.
I hope that after a change of leadership in May things will happen for the better to support the self employed - as I believe small enterprise to be the backbone of this country.
Thanks for the opportunity to give my answer.
Tony
Yes Ken, my business was not a roaring success, but enjoyed the experience, which I used to operate as a decorator and Artist. Have been in several businesses since but still remember the sense of freedom that the EAS gave me, compared to being on benefits.
I joined this scheme or very similar in 1989.
I had just finished at Hatfield Poly and had been building my photography business whilst a student there.
My mother sadley died just before my finals so it is safe to say I left college a little stressed.
I went straight on the scheme and it forced me to stop for a few months and take stock. I put together a business plan which whilst niaeve and inaccurate made a great foundation for my future company.
The cash also gave me a bit of a head start. The project gave me that little bit more confidence at a time I needed it.
I am celebrating 20 years in the photography business this year, would I have done it without the scheme? probably, but the fact is I did it with the help of the scheme and for that I an grateful.
No, I'm unaware of this scheme, I only started living in the UK 2 years ago. Having said that, I notice that there are several countries which throw sops at startups, while others dont.
Sops are in the nature of some kind of insurance against short term failure, and might therefore spur more people into business, but they do not guarantee long term success. Funny, but irrespective of what is doled out, 95% of startups go bust in the first 5 years, irrespective of country... and of the other 5%, 95% go bust in the next 5 years.
My personal opinion is that no subsidies should be given... either in terms of money or tax breaks. If any are given, they should be given with the explicit understanding that they will only last 5 years, and will then be recovered afterwards.
Yes, I did in 1987 at the age of 19. My business was Telepoint and I was installing telephone systems for companies in the South East.
From memory, there was £1000? up for grabs payable over a 12 month period. I cannot remember the exact details, just that it was a help and there was guidance and some limited training in running a small business; a mini BP was required to qualify, along with some interviews.
Without this initiative, things may have ended up quite differently for me and it was a good thing; I am glad I did it!
Hi Ken.
We were "ripe, keen, eager sub 30 year olds” with a burning passion to make a success of our fledgling business but lacked one key ingredient, a capital injection.
As a business start-up, with neither collateral nor a "successful" business history (so essential to the high street banks requirement at that time) our long suffering accountant and mentor suggested we re-apply for an Enterprise Allowance Scheme Loan.
Armed with a business plan, a five year budget projection and a P & L statement, we confidently addressed the big day – a revisit to “the bank manager".
I don’t do tears as a rule, but on this occasion we exited the meeting elated. We had an acceptance to the scheme, we had our capital injection and yes, that great welling up arrived. What a feeling. At last someone, somewhere was willing to take a risk on us. Someone believed in us.
The cash injection would do what we could not have done by any other means in the timeframe - even by organic growth. What a welcome to the next level, but now the pressure was on us to deliver.
With regular visits by our accountant, religiously sticking to the business plan we expanded three fold in two years, developing a number of industry firsts and of course, never looking back but only to respect the Enterprise Allowance Scheme, which in concert with the bank gave two people the chance to liberate their passion and enthusiasm to create and great business.
I guess, on reflection, the Enterprise Allowance Scheme was the first Dragons Den.
Hi Ken,
Like many of the people who have answered below I'm also far too young to remember this scheme.
In my view if the government wants to stimulate grass roots businesses in the long term they need to look at the education system. Better partnerships should be formed with successful local businesses and schools to teach people at a young age about the benefits of starting your own business and how to do it with guest speakers and more relevant work experience placements. Too much in existing business education at school level teaches people how to run someone else's business or accounts rather than start their own enterprise. Employers really struggle to find young people who are 'commercially aware' as a country we need to do something about this.
Pupils should be tasked with starting small enterprise for school projects and given more commercially oriented reading. I wish someone had handed me books like "How to win friends and Influence People" by Dale Carnegie when I was fourteen.
A small grant to get started after agreeing a realistic business plan would make sense to me. An allowance scheme just seems to be a waste of money and resources that could be used for reducing employer NI contributions for a start.
My wife did set up a self employed business through the Enterprise Allowance Scheme during the late 80's and she found the knowledge and advice that was imparted very helpful.
