Last month’s blog post was a brief examination of the risks and rewards of self-employment. One of the stepping stones from unemployment to starting your own business is figuring out how to finance the initial costs. This is where the New Enterprise Allowance becomes relevant to the discussion.
What is the New Enterprise Allowance?
The New Enterprise Allowance is a government scheme designed to offer unemployed people the money necessary to start up a business. It was first started by the Thatcher government in the 1980s. Some well-known entrepreneurs and public figures got their start this way, including the founder of Superdry and the artist Tracey Emin.
Critics of the scheme back then claimed that it didn’t make much difference to unemployment figures and noted that many of the new companies failed and ending up disappearing into thin air. This happens with many new companies whether they use government schemes or not, however. Starting your own business is no joke, and it is certainly not for the faint-hearted.
The scheme fell into the background but came back with a bang in 2010 with better financial incentives. If you were trying to start a business under the original version of The New Enterprise Allowance, you had to put 1000 pounds of your own money into the pot before you draw any of the funding. This is simply not feasible for someone who is already unemployed and struggling to balance their meagre budget. The new version does not have this limitation, and actually gives you more to start off with.
Am I Eligible for the New Enterprise Allowance?
The eligibility criteria is pretty loose, thankfully. According to online government resources, you’re in with a shot as long as you’re over 18 and on some sort of benefit.
How do I Apply for the New Enterprise Allowance?
The best way to get the ball rolling is to head down to your local Jobcentre Plus centre and make an appointment. Then you can discuss the possibility of you getting the allowance with a (hopefully) knowledgeable member of staff who will give you more insightful details about the process.
The Importance of Passion
Before wasting your time and applying for the New Enterprise Allowance, you need to be absolutely certain that you want to start a business. It sounds fun to be your own boss, but quite frankly, working for yourself can be an absolute headache. A business that involves only yourself is fine, but once you get into the complication of hiring employees things become exceedingly complex. You’ll be the one that has to ensure your business complies with a mountain of government rules, you’ll be the one stressing out over profit margins, and you’ll be the one shouldering the burden if your company fails to turn a profit.
It is normal for new companies not to turn a profit for at least two or three years, so you need to consider this dreadful statistic and make absolutely sure that you can withstand this pressure. One way to improve your chances of succeeding at any business is to do something you’re passionate about. This will give you the drive to keep trying even when things get incredibly tough.
It is not enough to be half-hearted about your business idea, or to apply for this scheme just so you can get more money from the government every week. You must show your genuine desire and passion for the business you wish to start, and you do this by creating a comprehensive business plan. Being your own boss is not something you just do on a whim. It is a serious decision that takes a lot of thoughtfulness and consideration. This cannot be emphasized enough.
If you’re currently unemployed and have always dreamed of starting your own business, keep an eye out for next month’s blog:
Next Month’s Blog:
Following on from the advice about starting your own business, next month’s blog will discuss the creation of a business template and a government start up loan.
If you are unemployed and are tired of being unable to find work, but not interested in starting your own business, keep an eye out for this upcoming blog:
How to Actually Find a Decent Job: Are you tired of reading online career advice that tells you things that don’t really apply to real life? Recruitment jargon like networking, sell yourself, and don’t give up don’t help you pay the bills. Are you desperately looking for work and mentally or emotionally exhausted from the constant rejection? We at Company Jobs Direct truly want to help people find work. Read next month’s blog post, ‘How to Actually Find a Decent Job’, to unearth some truly useful advice that will actually help you find a decent job instead of wasting your time sending out unanswered after unanswered applications.
by Gillian Rixey
(Gillian is a PhD qualified freelance writer and scholar born in Ireland but currently residing in the United States.)