New enterprise allowance for my business idea? or the work programme....

helly333

Hi there..
I’m currently unemployed and on JSA. I’m at a bit of a crossroads and need to make some decisions as to whether or not to try and get referred to go onto NEA in the next week. Within the next few months I’m likely to be put on the work programme and so need to make some decisions as to whether or not to go with the flow or pursue the NEA.

Basically, given my artistic skills and desire to work from home, I want to run a business and sell my own artwork online and in galleries and craft stalls etc. I struggle with understanding a lot of the legal implications and have found the recent reading I have done on the subject a little overwhelming. I feel I have 2 options –

1) I try my hardest to get a part time job to escape the clutches of JSA and the work programme. Then during my spare time to work slowly on wading through the business idea – making artwork (products) to sell and building up a website, business skills knowledge and everything else. I envisage this taking a while. But by doing this I face the posibility that I can't gte a job so soom and end up on the work programme.

2) Try my hardest to get on the NEA and fast track my way into trading in what seems like a very short period of time. If I don’t go on NEA now I won’t get the opportunity again as I will be on the work programme and unable to apply.

My concerns about option 2 are that although I have written the first part of my business plan (up to the marketing section which is currently about what I plan to do with regards to market research) I feel that there is so much to learn about running a business and all the legal implications. I don’t see how I can create a website, make contacts, get copyrite protected, insured, and all the many other things I’ve read about with regards to business worked out in so little time.

The type of business that I want to go into – selling my artwork – is something that will take time… firstly to build up a customer base and also the make the artwork.

Another concern is that at the moment I only have one prototype piece of art that I made with the business in mind. I could make designs for further pieces and I have a clear idea in my mind about what my products will be like, but basically I need a couple of months to build up a range of products. This however is time I’m not sure I can really afford given the concerns I have about being put on the work programme.

People have told me I have a great business idea, but personally I’m not sure I’m going to be ready to be trading within a few months.

Is the NEA something I should really push for? Should I work my hardest to jump at the only opportunity I have to go on it and hash together a business in 6 months?
Or –
Should I take my time with creating the business and go with the flow of the work programme? Is this the easier option?

Thanks

Caroline_a

I have a friend who has his own craft business. He worked on it evenings and weekends and sold via his website and also did a couple of festivals where he had a stall. At the time he was working fulltime. He was then made redundant and now runs the business fulltime, and does markets, festivals, ebay and has upgraded his website.

He was very busy up to Christmas and now I think it just ticks over, but I don't think he's ever going to be rich with it. He is very knowledgeable in business matters which helps, so I would suggest that you don't go fulltime into it at first. You need to know how to price your goods, there's no use in making something that takes you 5 hours and then only charging £5 for it - that's £1 an hour for your labour!!

Good luck!

retrofunk1

You can be referred onto NEA once you have been on JSA for 6 months right up to going onto the Work Programme, so you probably have more time to think about what you'd like to do before you need to make a decision. If you are referred to the NEA, someone will speak to you first to assess your business idea before they make a decision to accept you onto the scheme or not, and at this point you can also decide it isn't for you just yet. However you are likely to receive some useful advice on next steps and you can go away, look at the options with more information, and ask for another referral back once you feel more ready to proceed.

I think it would be worth doing just for that feedback as it may help you to crystallise what you want to do with your idea.

Dependant on your circumstances, if you did decide to go onto NEA, once you have gone through the business planning process (and you should receive support to work through all the areas you have identified as issues for you) and begin trading, you may also be entitled to additional benefits such as Working Tax Credits which can help you to keep afloat financially until you are able to survive on the business income alone, so that would definitely be worth looking into further. Again, your local NEA provider should be able to help with this or point you in the direction of someone who can.

The other thing that the NEA will provide is access to a start up loan of up to £1000. Neither the 6 months of NEA payments nor the loan are available once you have gone onto the Work Programme.

I think you probably have nothing to lose at this point in speaking to the NEA provider to find out what is on offer and what your best next steps are.

Good luck with whatever you decide!

Horace

I would be inclined to continue to look for fulltime work and work on your self employment in your spare time. I know that a lot of freelancers (me included) have been hit hard by the recession to the point where we are now looking for paid employment.

Whilst you are on JSA there is nothing to stop you looking at your local chamber of commerce as they sometimes run courses about setting up a business and they will cover things like legalities, sales & marketing, branding etc. These courses are free and you can do them when you are on JSA. (I know because I did the courses before I got myself onto the old New Deal for Self Employment Scheme back in 2008).

Working Tax Credits are about £51 a week and this is not enough to survive on because when you start out you have very little income.

Take whatever courses the jobcentre offer you - get a job and in your spare time work on your business, start small. Remember that when you start your self employment you must register with the HMRC.

Good Luck.

helly333

Thank you for your replies so far. I have been looking for other work to support myself but due to limitations due to a health condition and the lack of work that would suit me its proved to be difficult.
I think ideally a part time job and working on my business alongside that would be ideal, but at the moment I feel I’m faced with a last chance at trying to get on the NEA or the work programme, which may be looming.
I’m not sure which way to go. I’m not convinced I’m cut out for the NEA as it sounds like a bit of a fast track thing. I worry that the end result might not be as good as if I’d worked on the business idea in my own time…but this could end up being ‘my own time’ whilst on the work programme. I suffer from fatigue so if the work programme is draining and time consuming (work experience) I may not have the energy to work on my business or do anything at all.
I guess like retrofunk1 says, I should ask to be referred to an NEA advisor and ask them a list of these questions.

Horace

Helly the new self employment programme is a fast-track and not like the old New Deal for Self Employment Programme where a person could test trade for 6 months and receive lots of support before the test-trading started. I am still in contact with my old mentor who helped me on the New Deal programme and he has said that the programme is now short and doesnt give anyone a real idea of what business is like.

Have a word with the Disabled Entrepreneurs (sorry cannot remember their web address) as they may be able to advise you with regard to self employment.

Definitely try and find a part time job though because the reality is that you probably won't make enough money for the first two years to be able to support yourself.

Pippajane

Hi all,

I have recently joined the NEA scheme and was told by the job centre that whilst on this scheme if I get other work I can take it and earn as much as I like as no longer on JSA. Having signed up to the scheme I have been told I am no longer allowed to do other work and I can only receive the £65 a week for 13 weeks and half that for a further 13 and claim working tax credits.
I already have two days a week work and receive no benefit whilst doing this apart from getting my NI paid. I would prefer to be working and work more if the opportunity arises whilst setting up my business and not claim working tax credits. Does anyone know what I am or am not allowed to do as I am being told conflicting things and I am now considering coming off the NEA but don't know how it will affect things then either. Any thoughts please??

Thanks :rotfl: