I’m starting a business in the New Year. Actually that is not accurate as I’m starting three. One is the ghost tour that I do in Leek “Shriek in Leek”, the other is a life story/ biography service ” Lives that made a difference” commemorating milestones in people’s lives, and the third is a historical research service for North Staffs. I have been helping an American research the life of a early 20th century artist who had a connection with the area. I’ve posted on my blog an example of what I can do which I hope is of interest.
The three businesses have been launched with the help of Business Initiative and I am hoping to use the fairly new Government scheme called Self Employment Credit which guarantees a small income for 16 weeks.
I’m also working part time for a supermarket part time which will guarantee me at least 14 hours a week as well as doing a environmental course at Keele called “Project Green” in which I am researching the possibility of developing “green collar” jobs in North Staffs.
I am also applying for the Small Business Grant that the District Council do as well as having good links with Prime- a part of the Princes Trust that supports over 50s in setting up a business.
I would be also interested in hearing what people reading this think
In embarking on this path I will admit to having had conflicting messages and levels of knowledge from different sources. I cannot praise “Business Initiative” too much. They certainly have a good and realistic grasp of what is on offer. The local Job Centre has a less sure grasp of the essentials. I have found the level of knowledge exhibited by Job Centre staff to be very poor- I guess it is because they are overwhelmed by the number of claimants. I have heard that some advisers have being seen 60 clients a day in these circumstances any individual work is an impossibility.
But this journey which I have been pondering for some time now lead me to think about the difficulties that people especially if they have been long term unemployed will have in becoming self employed.
Their experience was graphically bought home to me by a programme on BBC on the experiences of the long term workless. It followed a middle aged woman on a South Yorkshire council estate as she tried to set up a sole trader business selling children’s clothes locally. She received a great deal of help from her New Deal adviser but the whole enterprise collapsed as the woman was unable to obtain credit because of a poor credit history.
This must be a major problem to those living in Stoke who are interested in escaping poverty by becoming a single handed business, but have little or no capital and a bad credit history because of long term unemployment.
Information from the authorities however about new business start up seems encouraging and a few years ago the area was credited with having one of the highest new business start up in the country which must be all to the good.
However my hunch is that those individuals who do have access to resources and support are making a success of becoming self employed. A good example was provided at the AGM of Voluntary Action Stoke last September when a young Asian woman who was studying to be a doctor had set up a prescription service. She had been helped by her wealthy farther who had provided her with free office and financial support. Her efforts are to be obviously commended but how could say a long term unemployed person living on Chell Heath wanting to set up as self employed have access to such advantages?
Personally, I am interested in micro credit as a help in the situations I have outlined and I did approach the City Council via Adrian Knapper to see how susceptible the Council were to my ideas as I wanted to link micro credit and credit unions to developing LETS in Stoke on Trent. I reply I got from Colin Hunton was a very positive one
I got an e-mail in April which read
” micro credit is a project that I have been looking into with Business Initiative and a few years ago we had a scheme that did just that. The micro credit scheme had a ceiling of £5,000, not a fortune I agree, but with some wise planning it enabled many applicants’ to get on their feet and become independent. An application had been submitted to renew this funding and I hope to hear very soon of its success.
There are other forms of funding in Stoke as I am sure you are aware of e.g. Michelin Loans, BIC “pristine grants”, Equity Funding- North Staffs Capital Risk (CDFI), UK Steel fund, Coal Enterprise, EFG, etc. These are just some of the funding without factoring, personal equity and community funds.
One of the problems that seems to arise though is that many businesses will apply for the incorrect type of finance assistance which can wear the applicant down, because the need does not always fit the criteria of the financial assistance on offer.
Collateral, whether it exposes equity or a sound business plan and a very good product or service to reduce the risk of exposure is an essential factor when applying for financial assistance. No fund holder will want to grant assistance to a product which carries too high a risk.
Micro credit is a good instrument, and one the Princes Trust uses and certainly one that I have favoured when young people have been through a Young Enterprise scheme at school, after being fired up by running their own business. It seems a pity that there is little access to ‘ high risk’ financial assistance. Equally in later life there needs to be access to relatively easier funding regime that can be tapped into.”
That was in April so I don’t know whether a micro credit scheme was funded. It would be a pity if it was not. Micro credit seems to me from the reading that I have done to be a very successful way to lift the poor out of poverty. Created in Bangla Desh by the Nobel prize wining Mohamed Yunnis it has allowed people in poverty to access small amounts of money as a business start up. What is remarkable is the high repayment rates of the loan both in Bangla Desh but in other countries where small business enterprises in deprived areas have been funded by micro credit. News night last year ran an item on a Micro credit project in New York which had a repayment rate of 96%, higher than through the conventional banks.
I have to say that the picture locally is mixed. I attend seminars run by Business Initiative. Everyone I meet is usually scathing of Job Centre Plus and not particularly thrilled by the involvement of the City Council. The comment that I got was that :Local Authorities in the area are generally unsympathetic especially when their Council Tax arrears.
I am also confident that the newly self employed are lacking in knowledge about funding streams as well as the opportunities offered by alternative models such as Social Enterprises, etc.
I would be interested in any constructive comment back.