Yet, for some people, self-employment or setting up a small business has the potential to be transformative – to give purpose, to provide an income and may even be a way to improve the local or regional community. While finance options can appear limited, fortunately there are avenues available to people currently out of work to help them get their enterprise off the ground.
Entrepreneurship is a pathway for unemployed individuals to re-enter the workforce. The Start Up Loans programme provides up to £25,000 with a fixed interest rate in the form of a personal loan and those that get the loan can have access to up to 12 months of free mentorship from industry experts. This support can make all the difference to those seeking to bring their entrepreneurial dreams to life, but who don’t have the spare cash or external support network to do so.
Start Up Loans has also recently launched ‘The Fresh Start Guide’ in collaboration with the Department of Work and Pensions (DWP) and HMRC. Tailor-made to assist those seeking a new direction, the guide provides top industry guidance to those thinking of becoming self-employed and gives a comprehensive 10-step process to help aspiring small business owners create their own enterprise.
The guide will be distributed through DWP’s network of job centres across the nation and passed on to 25,000 specialist job coaches. Literature will also be shared with large companies planning to make large scale redundancies, to show avenues that are available to people who find themselves out of work.
Key features of the guide include guidance on business finance, a solid process for starting a business from the ground up, and detail the impact on welfare benefits that are available to unemployed individuals.
Supporting unemployed individuals is fundamental to help boost the UK economy, and giving support and confidence to those who are out of work is the right thing to do. A 2022 report by the Learning & Work Institute calculated an 80% employment rate would boost the economy by £23bn.
The Fresh Start Guide also features case studies of previously unemployed people who have gone on to start their business after taking out a Start Up Loan. Having access to testimonials from successful small businesses started by unemployed individuals can further boost confidence of aspiring entrepreneurs who are out of work, as they can relate to other start-up stories and learn from the experiences of others.
One Start Up Loans success story is Vine and Vibe, a botanical-themed coffee shop and houseplant centre based in Pembroke, Wales. Husband-and-wife Kristian and Beckie Howell launched their small enterprise with the help of a £20,000 Start Up Loan and turned their shared passion for houseplants into a business, after co-founder Kristian experienced a life-changing injury.
After being unable to access finance via traditional methods to set up shop, the Start Up Loan allowed both Kristian and Beckie to build their sustainable, community-focused business that is accessible by design. The Vine and Vibe 6,000 square ft centre built in a disused greenhouse with reclaimed materials offers specialist drinks and sweet treats, and stocks a wide range of houseplants and botanical-themed homewares.
Vine and Vibe co-founder Beckie said, “being on a low income and reliant on disability benefits meant that traditional lenders simply weren’t an option for us. We knew we had a strong idea and the determination to make it work, but we needed someone to take a chance on us.
“The Start Up Loan gave us that opportunity – not just with the funding but providing the support and advice to help us understand cash flow and business planning too. Without it, Vine and Vibe wouldn’t be here.”
Vine and Vibe co-founder Kristian adds, “we’ve worked hard to source ethically and locally wherever possible. Our coffee comes from Capital Roasters, just 1.5 miles away, and we’re working with them to develop our own flavour profile. The café serves seasonal drinks like yuzu lavender and strawberry basil iced lattes to make the experience unique.”
“The Start Up Loan gave us the platform to take our vision from idea to reality. It has been transformational.”
Since 2012, Start Up Loans has provided £148m in loans to unemployed and economically inactive people in the UK, bringing potentially over 28,000 businesses from a dream into a reality. Vital community hubs like Vine and Vibe may not exist without initial funding, professional support and mentorship.
A lot of economically inactive people may not realise the support and finance that is available to them to start up their own business, and it is our duty to ensure that start-up knowledge, and valuable mentorship from industry professionals, can be accessed by all with ease.
The Fresh Start Guide covers ground from the costs of setting up a business through to marketing plan and everything in between could play a part in helping meet this duty. We look forward to seeing the impact it can make.
