Another\u00a0government, another push for another 10 000 small businesses to be created from the ranks of the long\u00a0term\u00a0unemployed.<\/p>\n
To me it seems similar to what we already have under the Flexible New Deal, unless I am missing something: it may be a tad better resourced. \u00a0But, I am encouraged that Iain Duncan Smith appears to have a real commitment to social justice, at least, he chairs the\u00a0cabinet\u00a0committee<\/a> on it. \u00a0 Let’s hope that his\u00a0commitment\u00a0to\u00a0social\u00a0justice\u00a0rather than newspaper\u00a0headlines\u00a0really shapes this\u00a0New Enterprise Allowance<\/a>.<\/p>\n So what are the chances of success for the New Enterprise Allowance, and what might be the pitfalls?<\/p>\n To begin with, although I am a big fan of mentoring, I am not convinced that it is the best way to support people with transitions from unemployment to self employment. \u00a0The best mentors (as opposed to\u00a0coaches) have ‘been there, done that, seen the film and got the t-shirt’. \u00a0They\u00a0can\u00a0offer sage advice and guidance based on practical experience (usually gained over many years in a\u00a0specific\u00a0and relevant industry, and importantly should be chosen by the mentee and not assigned to them by a service provider); Mentors should know what it takes and be available to put in the time and commitment necessary. \u00a0Let’s also hope that they are properly trained, supported and supervised in the process of mentoring. \u00a0And\u00a0mentoring\u00a0should not be a mandatory component but an option, we have to recognise that folks learn in different ways and for some the thought of being mentored just does not cut it.<\/p>\n So, if we must have a mentoring programme\u00a0let us run it well. \u00a0Lets take mentoring seriously. \u00a0Let’s make sure that we have enough well trained mentors. \u00a0Personally\u00a0I doubt that we will. \u00a0More\u00a0likely\u00a0we will find an army of middle managers looking to do some CSR, or rebadge existing enterprise advisers as New Enterprise Allowance Mentors. \u00a0Plus \u00e7a change<\/em>…probably<\/p>\n I\u00a0think\u00a0the enterprise coaching role is, in places where it has not been confused with enterprise evangelism, much more\u00a0likely\u00a0to be effective. \u00a0Non directive, facilitated conversations that give people space to develop their options and make their own choices provides a\u00a0sustainable\u00a0route to more enterprising communities. \u00a0Conversations that don’t use ‘benefits’ and ‘enterprise’ as carrots and sticks<\/a> to manipulate people to meet government targets and trigger payments by ‘results’. \u00a0Our industry is riddled with such practice. \u00a0We need conversations that\u00a0respect\u00a0people and their right to choose.<\/p>\n I suspect that mentors will work with mentees primarily on ‘the business plan’. \u00a0I doubt they will have the coaching skills to really work on developing the person rather than their idea.<\/p>\n Will a decision not to start up be valued and rewarded as highly as a decision to start? \u00a0I hope so.<\/p>\n Will the New Enterprise Allowance engage ‘the community’ in supporting local people struggling to make the\u00a0transition\u00a0to self employment? \u00a0No sign of community panels and networks to support the formal delivery structures. \u00a0It is not so much a New Enterprise Allowance that we need in our communities as a New Enterprise Alliance….<\/p>\n Will the scheme be designed to encourage the formation of team based start-ups where complimentary skill sets and personalities ensure that all functions in the business are adequately covered? \u00a0I doubt it. \u00a0It will, if\u00a0history\u00a0is our guide, take\u00a0the shortest, lowest cost, route\u00a0from\u00a0benefits to self-employment, not the route that is most\u00a0likely\u00a0to\u00a0result\u00a0in a sustainable business with the\u00a0potential\u00a0to grow. \u00a0While we should be looking to maximise return on investment I suspect we will look to minimise investment. \u00a0Cost per start-up will be the metric of choice. \u00a0And the sooner we get the better.<\/p>\n The New Enterprise Allowance will be for long term unemployed who ‘want’ to start a business. \u00a0 Finding the people who really WANT to will be an enormous challenge. \u00a0Personally I don’t think it is anywhere near enough for someone to\u00a0want\u00a0to start a business. \u00a0It needs to be something that they HAVE<\/a> to if they are to have a decent chance of success.<\/p>\n We have\u00a0approaching\u00a0800 000 people who have been unemployed for more than 6 months. \u00a0The New Enterprise Allowance hopes to help 10 000 of them to start a business this year, that is just over 4 in every 500.<\/p>\n This\u00a0represents\u00a0a challenge. \u00a0To help find the few who really\u00a0will\u00a0do the groundwork required and learn what needs to be learned. \u00a0It is a challenge both for marketing the scheme and effective\u00a0psychological\u00a0contracting between service provider and service user..<\/p>\n And the whole scheme reeks of yet more ‘fast enterprise’. \u00a0A couple of mentoring sessions and three half days with a training company and you will be ready to roll. \u00a0Well maybe. And maybe not. \u00a0Where these sorts of schemes prevail they prioritise the most capable and even then have frightening business\u00a0failure\u00a0and loan\u00a0default\u00a0rates. \u00a0Good business start ups plan and prepare carefully. \u00a0They don’t rush it. \u00a0There is little point in starting 10 000 new businesses in a year if the survival rates are not good. \u00a0And please this time will someone show an interest in survival rates?<\/p>\n\n