Many of us will have thought about starting our own business at some point. Not many people get around to trying and those that do face a real challenge. Around half of small businesses fail in the first year of trading.
However, for people with convictions, disclosing convictions from the past often leads to discrimination in employment. This leads lots of people to look carefully at how they can employ themselves.
Don’t forget that you will need to disclose any unspent convictions when you apply for business insurances. Most insurance companies will refuse to insure you so make the most of our list of insurance brokers. Make it a part of your business plan to get advice from a broker on exactly what insurance you will need and speak to as many as possible to get a competitive quote.
Points to consider
The steps you need to take will depend on the kind of business, but some general points to consider include:
- A business plan that lays out a clear strategy and objectives is essential, particularly when seeking funding from lenders.
- You need to decide on the legal structure of your business – a limited company, self-employed sole trader or partnership
- Pick a suitable name for the business. If you choose to be a limited company, you will need to register the company name with Companies House.
- If you need premises, look for a cost-effective location that will balance convenience for customers and suppliers with the rent that you can afford to pay.
- There are various taxes to pay and accounts that you need to keep. Seek the help of a tax professional and make sure that you meet all tax deadlines.
- Initial set-up costs are considerable. If you cannot use savings or loans from family or friends, you could approach a bank. You may qualify for help from schemes run by the Government or charities.
Questions to ask yourself
When setting out what you want to do, key questions might include:
- Are you going to be able to get the relevant insurance, because of your convictions
- If setting up a company, do you want to become a Director? If you, you need to ensure you are not disqualified from Companies House. See Becoming a Director of a Company for more information.
- Do you want your name attached to your work, particularly if your conviction was featured in the media. You could think about changing your name first.
- If you’re looking to contract with companies, will they be requiring you to provide details of your criminal record? If so, what level of disclosure will they require?
Lets Talk About Self-Employment (NIACE) – This has lots of information regarding the steps that people with convictions, who are exploring the option of self-employment, should take.
Unlocking Potential: Working For Your Self (DTI) – You can read the stories of 15 people who have successfully started or revived businesses after a prison sentence (please note that this document is only available electronically).
Self Employment Checklist (CAB) – You can write to your local CAB to ask for a hard-copy of this.
Specific help and services
New Enterprise Allowance
The Work Programme is not the only Welfare to Work provision for those seeking self-employment. There is an alternative national scheme called New Enterprise Allowance (NEA). It is alternative in the sense that you cannot be on both programmes.
It has significant benefits. NEA offers business advice, assistance in producing a business plan, funding support and business mentoring. It offers a weekly allowance worth £1274 over 26 weeks, paid at £65 a week for the first 13 weeks and £33 per week for a further 13 weeks. There is also access to a loan of between £300 and £1000 to help with start-up costs. The loan has to be paid back but the allowance doesn’t.
The offer of a loan is not guaranteed. It is subject to status and available for projects with “high growth potential”.
To be eligible you must be aged 18 or over, have a business idea and receive one of the following benefits:-
- Job seekers allowance (or your partner does)
- Employment and support allowance (or your partner does)
- Income support
- You may be eligible if you receive Universal Credit
Any JSA claimant can now access NEA from the first day of their claim, instead of having to wait for 6 months as was previously the case.
One interesting feature of NEA is the setting up of Enterprise Clubs, where aspiring entrepreneurs can meet with local business people to get advice and participate in collective self-help. However, there is no money available from government for setting up Enterprise Clubs, unlike their employment equivalent, Work Clubs.
Details of the organisations responsible for the NEA in each Jobcentre Plus district are available here. More information about the NEA is available on the GOV.UK website here. If you’re interested in the NEA, talk to your Jobcentre Plus advisor.
GOV.UK has a detailed section online about setting up a business.
Citizens Advice Bureau (and their Advice Guide website) has lots of useful information and advice.
Business Link is a free business advice and support service, available online and through local advisers. To find your nearest office, you can visit the GOV.UK for details of various business support helplines.
StartUp Britain is a new campaign by entrepreneurs for entrepreneurs, launched on 28th March 2011. Designed to celebrate, inspire and accelerate enterprise in the UK, it has the full backing of the Prime Minister, the Chancellor and HM Government.
School for Startups is the UK’s leading provider of business training for entrepreneurs. We provide accelerated business training that helps entrepreneurs launch more successful startups and run more successful businesses.
Startup is a programme that offers ex-offenders, and those about to be released from prison, the opportunity to become self-employed, giving a real chance of a fresh start. Whether you are still in prison or recently released, just write briefly to them with details of yourself and your date of release, your business idea and any work experience/qualifications you hold. They should be able to send you a questionnaire to be completed.
UnLtd is a charity which supports social entrepreneurs – people with vision, drive, commitment and passion who want to change the world for the better. We do this by providing a complete package of funding and support, to help these individuals make their ideas a reality.
The Princes Trust provides practical support; advice and financial assistance to young people aged 18-30 who are interested in setting up their own business. Support available includes: Low interest loans, grants, marketing assistance, business mentoring
Business in the Community mobilises business for good. Its members commit to improve the way in which they manage their resources, be that their people or the planet. Its power is the unique platform this creates for collaborative action.
Companies House incorporate and dissolve limited companies, examine and store company information delivered under the Companies Act and related legislation, and make this information available to the public.
Young Enterprise UK works with the business community to deliver programmes to develop young peoples enterprise skills and experience for the future.
HMRC have sections devoted to people who are interested in starting up, or who have started, their own business; providing information on Tax, National Insurance and VAT issues.
The Health and Safety Executive provide information and advice on Health & Safety issues for people who are setting up their own business.
The National Federation of Enterprise Agencies provides a comprehensive range of quality services and support for Start-Ups, Micro Businesses and the Self Employed from a network of Enterprise Agencies.
Enterprise Education Trust is a business education and enterprise charity offering programmes and challenges to bring business to life for young people.
Breaking Chains is a charity which supports ex-offenders and their families to overcome obstacles in the way of employment by helping them to become self employed, or to set up their own businesses, social enterprises and co-operatives. If you need to be referred to Breaking Chains, you can do this directly, or contact us, and we can refer you to them.
Federation of Small Businesses is the UK’s largest campaigning pressure group promoting and protecting the interests of the self-employed and owners of small firms. Formed in 1974, it now has 200,000 members across 33 regions and 194 branches.
Fredericks Foundation is a charity that helps people wishing to set up, or expand their own business as a means to achieve financial independence whilst rebuilding their confidence and self esteem but are unable to access the finance required from conventional sources.