PRIME Initiative

Buried away in the detail of the Chancellor’s budget report is notice of the end of a very valuable incentive for those struggling to work their way off benefit. From April 2012, the 50-plus element will be removed from Working Tax Credit. This means PRIME clients won’t be able to get it any more. This could mean a cut of £1,965 in their income in the first year back in work.

Working Tax Credit is a kind of reverse income tax that you should get if your household income falls below a certain level. For the newly self-employed it provides a useful safety net, as it means you know your income won’t fall to zero even if your net profit does. In the early stages of a new business this is very reassuring, as the risk of low or negative income from the startup is real.

Since the 50-plus element is only available to those who are returning to work after previously being on benefit it seems a very odd thing to cut. And it won’t save much for the public purse, since you’ve only ever been able to claim it for your first 12 months back in work. After that it ceases automatically anyway.

The Chancellor hopes to save £35 million in the tax year 2012-2013 by this measure, and £40 million a year thereafter.

Lets’s hope all of this money returns in some way to those striving to get themselves back into work by their own efforts. It’s a very strange thing to remove one of the few forms of financial assistance that was already well-targeted at those actively trying to work themselves off welfare dependency.

On a more positive note the Chancellor announced that the personal income tax allowance is to rise from April 2011 by £1,000 to £7,475, removing some 880,000 people on the lowest incomes from having to pay income tax at all. Eventually he hopes to raise the allowance to £10,000, but gave no definite date.

This measure should help many self-employed people, since most are set up as sole traders and are taxed primarily through income tax, filling in the self-employed self-assessment form.

There’s more about the budget on the resources area on PRIME’s other web site, PRIME Business Club.

Working Tax Credit - current maximum rates per year
(what you actually receive tapers off as your income rises. The Chancellor has also changed the taper “withdrawal rate” too, up two per cent to 41 per cent, so in future you will lose money faster).

 
Latest Working Tax Credit rates and thresholds

Full budget report on HM Treasury site (as big PDF) Stuff about ending the 50-plus back-to-work element is budget policy decision 41 in table 2.1 on page 48.

I grew up in a household where every time someone complained about something, my father said “Well why don’t you do something about it?”.  The “it” in the question was usually something as minor as third-world poverty or nuclear disarmament.
 
So having worked as a supplier in the business support sector for the last 18 years, I could not resist getting involved in the discussion sparked by Doug Richard’s provocative Enterprise Manifesto.
 
It’s easy to slag off the existing business support system. Indeed, that’s what we in the UK have a habit of doing. We moan. Then the politicians beat their chests and spend lots of taxpayers money creating a marvellous new approach, then we go round the loop again.

The old hands of the business-support industry label this “The Three Cs” ….. meaning that you expensively close the old organisation, then open up a new organisation across the road, rehiring the same staff but buying new Carpets, Curtains and Computers each time.
 
So what would I do if I was in charge?
 
Here are a three ideas:
 

1. Move to three UK providers.

At the moment, England puts most of its investment into one monolithic system: Business Link. This, like the UK’s education system, is in a state of constant change. Business Link was originally split into 82 units, each of which invented its own business-support systems (commissioning unique software, etc). Once these 82 were running smoothly, the 82 were scrapped in favour of nine units, with nine different systems this time, all run “by the private sector” (i.e. by short-term contractors) but all answering to one central set of objectives and metrics.

Meanwhile Wales and Scotland have each invented their own systems for business support, and have similarly changed these countless times.

This tinkering will never cease, because Soviet-style central planning will always lead to disappointment and yet another attempt at a new central plan by the next politician in charge.
 
Now ask yourself, why are the UK supermarkets so brilliant at giving the customer what the customer wants? It is because Tesco, Sainsburys and Asda compete to win customers. They find out what customers really want, then provide it cost-effectively to every town in the UK. (Hmmn, I can sense some readers’ hackles rising as I write this bit… )
 
We need a similar set-up in business support. I can imagine three or four companies (such as Serco and Exemplas) becoming superb as a result of such intense national competition. Rather then creating regional monopolies, we need a handful of national competitors which are rewarded in line with their success. How would I measure success? No room to explain it all here, but I believe that we could come up with a better system than the current one.
 

2. Mandate these big providers to use small suppliers

I never cease to be bowled over by the dynamism of the small business sector. These guys are truly hungry! The same goes for some of the smaller charities. It’s often a case of delivering excellent service or having no job next year.
 
And while public sector procurement is hugely biased in favour of (low risk) large suppliers, private sector procurement is far more open to small businesses.
 
When I think of training courses, or mentoring programmes, or websites , or online tools, or back-office systems, I can  always think of a small supplier who would be excellent… especially if they were given the chance to supply a national organisation (as proposed above) over a long period of time.
 
In fact I can imagine both the national business support providers and their small suppliers becoming world class, and supplying overseas customers, just as our private schools and leading universities educate students from around the world.
 

3. Encourage online suppliers

I count myself very lucky, as my company is one of the two main publishers behind the business advice on the massively successful www.businesslink.gov.uk website.
 
But this website leaves precious little room in the marketplace for the private sector websites. I think it should proactively partner with the private sector and I would include our own specialist websites in the list www.startupdonut.co.uk, www.marketingdonut.co.uk and www.lawdonut.co.uk.
 

Rory MccGwire is founder and Chief Executive of BHP Information Solutions.

If you are as interested as I am in the whole issue of how best to organise this country’s business support, you may also be interested in my blogs on this theme on the Startup Donut website:

Business regulation

Have your say! Business support – Part 1

Have your say! Business support – Part 2

Have your say! Business support – Part 3

More details are emerging of the Conservative/Liberal Democrat Coalition’s policy on issues that affect employment creation and the encouragement of new businesses. Here’s a round-up based on what’s been said in important ministerial statements today. I also include some words said before the election by the winning side that still seem to be relevant.

The official statements 24 May 2010

Jobs and Welfare
http://programmeforgovernment.hmg.gov.uk/jobs-and-welfare/

Key points seem to be: a new “Work for Yourself” programme to encourage self-employment with loans and mentoring, new locally-based Work Clubs for conventional job seekers, and a promise of faster access to back-to-work programmes for those facing the biggest barriers.
On the last point, currently those unemployed and over 50 normally have to wait at least six months before getting on a government-sponsored self-employment programme.

Business
http://programmeforgovernment.hmg.gov.uk/business/

No real detail here, but several interesting commitments. Some (unspecified) RDAs are likely to be replaced by local authority-led “Local Enterprise Partnerships”, the IR35 self-employment tax ruling will be replaced with something less hostile to genuine small businesses, and more government tenders will go online with an “aspiration” that 25% of government contracts will eventually go to small and medium-sized businesses.

Detail on corporation tax rate changes that could well affect older entrepreneurs wanting to sell up to move into retirement are still to come.

Pensions and Older People
http://programmeforgovernment.hmg.gov.uk/pensions-and-older-people/
The default retirement age will go, while the state pension age probably will increase to 66 - but not before 2016.

Conservative position before the election

“Our ‘Work for Yourself’ programme will help move people into self-employment. We will build a network of business mentors and offer substantial loans to would-be entrepreneurs, supporting self-employment and franchising as a route back into work. We will work with specialist organisations that already have a proven track record in this area, like the Prince’s Trust and the Bright Ideas Trust, to offer the best support.”

For getting workless people back into ordinary jobs (as opposed to their own self-employed businesses) the Conservatives were talking about a mixture of “Service Academies” for particular employment sectors and small locally-based job clubs. This ideas still seem to be going forward, but no new detail has emerged.

Future of RDAs

While the Conservatives have long been sceptical about the value of England’s nine Regional Development Agencies in promoting prosperity and economic growth, the man who now has the top job at the department that funds them is Liberal Democrat Vince Cable, 67.

But he wasn’t a great fan of the RDAs either. Before the election he explicitly questioned the value of having them at all in the South East and the East of England, but suggested they might have role where structural unemployment is still a problem.

The form of words used in today’s statement suggests RDAs could possibly survive in areas where they can show they are popular - and in particular if they are supported by the local authorities in their region. But that the presumption now is that many will go.

In England local authorities are elected by the people. The big weakness of the RDAs is that despite spending large amounts of tax payers money they are not elected, and with the single exception of the London Development Agency they have very little democratic accountability.

So with spending cuts now a priority they have few allies to defend them. It seems local authorities will increasingly take over any functions that are deemed worth keeping.

This will move England closer to the Scottish position, where the elected local authorities already take on more business promotion and economic development functions.

Most relevant new ministers

DWP
Secretary of State for Work and Pensions – Rt Hon Iain Duncan Smith MP
Minister of State – Chris Grayling MP
Minister of State – Steve Webb MP
Parliamentary Under Secretary of State – Maria Miller MP
Parliamentary Under Secretary of State (Minister for Welfare Reform) – Lord Freud
(What do they all do? More details may be posted on the DWP site later:
http://www.dwp.gov.uk/about-dwp/ministers/ )

BIS
Secretary of State for Business, Innovation and Skills – Dr Vincent Cable MP
Minister of State – Mark Prisk MP

Other relevant departments
Secretary of State for Communities and Local Government – Eric Pickles MP
Secretary of State for the Home Department and Minister for Women and Equalities – Rt Hon Theresa May MP
Secretary of State for Education – Michael Gove MP

The House of Commons Work and Pensions Committee has been looking at contracted employment programmes - the sort of thing people are sent on by Jobcentre Plus after they have been out of work for a while.

Jobcentre itself does not actually run these programmes, but instead contracts them out to mainly private providers. The bulk of the work is carried out by a mixture of private companies and some “third sector” non-profits. PRIME itself has sometimes been a provider in such schemes, so we know what they are like.

Most of the organisations involved, whether private or charitable, are actually looking to make a profit or surplus on providing such services. Payment to the providers is usually by results in some way. They receive a portion of the money up-front when they start training or helping a person, but the majority later - when the trainee achieves some target outcome, like ceasing to claim benefit or staying in a job for three months.

This all sounds pretty efficient, but there are some potential problems with this model. The Committee has drawn attention to them in its report - and found some evidence that bad things are happening.

Basically providers have a financial incentive to concentrate their efforts on the candidates most likely to succeed - in the words of the report to “cream off” the people most likely to help them attain their targets. Meanwhile those the provider thinks are not likely to end up giving them good or profitable outcomes are at risk of being simply “parked” - i.e. minimal effort is expended on them.

This is indeed a real risk, and it is likely that future back-to-work schemes, whichever flavour of government is in power, are likely now to follow some payment by results model. The Committee is to be congratulated on drawing attention to the problems that can result. The solution, if there is one, is to police the contracts more effectively, and perhaps to broaden the range of rewarded outcomes, so that all who go on these programmes get a fair crack of the whip.

Extract from report below.
Full report at the Parliament web site - HTML version (browsable) or PDF version.

Creaming and Parking

100. Providers are increasingly being paid by results, on the basis of the number of customers moving into work, rather than a flat fee. There are two particular risks associated with this approach. The first is that of ‘creaming’, where contractors who are paid by results are likely to concentrate their efforts on those participants who are closest to the labour market and more easily placed in a job. The second is that of “parking” where participants who are deemed furthest from the labour market will receive a bare minimum of services and are unlikely to make any progress whilst participating in a programme. In this way providers seek to maximise their profit, focusing on customers who will earn them outcome payments, while spending as little as possible on customers who will not.

101. There is evidence that creaming and parking is taking place in the Pathways to Work programme. Research by the Department found that provider staff felt that the focus on performance targets influenced their behaviour with clients, to the extent that they spent less time than required with people with multiple barriers to work (and perceived as harder to help). They also felt that they needed to encourage job ready clients to take jobs that would enable a swift return to work, rather than take lengthier routes towards jobs that they wanted.

102. In addition, most providers who took part in the research perceived that clients were, on the whole, harder to help than they had anticipated and some staff expressed concerns that this had also led to job outcome targets being prioritised ahead of clients’ well being and ability to sustain employment.

from p28, section 4, Vulnerable Groups in The House of Commons Work and Pensions Committee - Fourth Report Management and Administration of Contracted Employment Programmes

Joblessness among the over-50s rose by 14,000 to 398,000 in the three months to January, the latest figures from the Office for National Statistics show.

This is on the official unemployment count. The official count includes only those out of work who are claiming Jobseekers Allowance, making it fairly inaccurate for both younger and older workers.  Younger workers disappear off the figures if they go back into education, while older workers stop being counted if they go onto health-related benefits - which many more over 50s are on than Jobseekers Allowance.

Nonetheless the official figures do provide an indication of whether the trend in unemployment is up or down. The trend now is still bad for the over 50s.

According to PRIME’s Peter Bennie, quoted in The Times, “It used to be that around 14 per cent of Jobseekers Allowance claimants were over 50. But in some towns and cities that figure is now at 35 or 36 per cent.”

The Times also talked to James O’Grady, 53, who lost his sales job last year and has just gone self-employed. And it talked to a younger jobseeker, an 18-year-old now on an apprentice scheme.

Full Times article on Age barriers to getting a job

PRIME, the charity founded by Prince Charles to help people over the age of 50 across the UK to get back into work by starting their own businesses, has appointed Richard Martin as Chairman Designate. He will take over from the existing Chair Pauline Norton in the summer.

Pauline says “I am delighted that Richard will be succeeding me as Chairman and believe he will lead the charity into its next exciting phase of development. Richard brings such a wealth of experience and contacts from the business, consulting and venture-capital worlds.”

Richard Martin started out on the London Stock Exchange before moving into marketing, working for the oil company Castrol and then the brewers Courage. Richard founded, grew and later sold his own consultancy business. He has since been involved with a series of start-ups in a variety of roles – investor, consultant and non-executive director.

Richard says “with the recession in full swing and the number of older unemployed people rising sharply, there is a greater need than ever for PRIME. My task is to ensure the charity continues to make a real impact on the problem and I look forward to building on the tremendous work carried out by Pauline and the PRIME team. But now we need to raise more money to support a growing number of over 50s move out of worklessness and into enterprise.”

PRIME (the Prince’s Initiative for Mature Enterprise) is one of The Prince’s Charities, a group of twenty not-for-profit organisations of which HRH The Prince of Wales is President. PRIME offers a practical package of support for people who are over the age of 50 and out of work, including a Business Club and the Zopa-PRIME Olderpreneur Loan scheme.

The over 50s are particularly affected by unemployment and the recession, so setting up their own businesses is a vital way back into the labour market. In the UK as a whole some three million 50 to 65-year-olds have no paid employment, and the number is rising. The best thing anyone who finds themselves in this position can do is sign up for PRIME’s help at www.primebusinessclub.com.

“Over 50s who are out of paid employment for six months after being made redundant only stand a one-in-ten chance of being an employee again”, says Laurie South, Chief Executive of PRIME. “It’s never been more important to provide opportunities for over 50s who want to work.

“But opportunities are hard to come by at the moment. As a result many people are now seriously considering self-employment. New businesses started by the over 50s will be a big factor in the economic recovery”, says Laurie.

1. Source of figures
The figures are derived from the Annual Population Survey and Labour Force Survey published by the Office of National Statistics, available at www.nomisweb.co.uk and from the PRIME report Olderpreneur Outcomes - more details here.

2. Interview Opportunities
PRIME’s Chief Executive Laurie South is available. Ring 0800 783 1904 to arrange a time.

3. What PRIME does
PRIME provides three levels of service, all delivered free to the unemployed people aged 50 and over who need them. At the first level there is “ Universal Offer” consisting of an information pack delivered by post, a web site with invaluable business content, and weekly (PRIME Business Update) and monthly (The Olderpreneur) email newsletters.

PRIME’s “Intermediate Offer”, available in selected parts of the UK, consists of PRIME’s own events and workshops plus seminars we deliver at other people’s events; a new mentoring scheme starting off in three cities (Bristol, Belfast and Newcastle); and an innovative Olderpreneur loan fund, available across the UK and delivered in conjunction with specialist on-line lender Zopa.com.

Finally the “Enhanced Offer” consists of a more intensive training and tailored one-to-one support. This is only available in the locations where PRIME is able to secure special funding. In 2009/10 PRIME had such funding in Sheffield (Sheffield City Council) and Doncaster (Doncaster Council), both in Yorkshire, in North-East Derbyshire (Department of Work and Pensions), and in the Black Country in the West Midlands (sponsored by Microsoft).

In 2009 PRIME gave practical advice and help to over 4,000 people who were thinking of starting there own businesses, and over 40 per cent achieved a successful business launch.

4. Further information
For more information about PRIME visit www.primebusinessclub.com
Media inquiries to Faye Banerjee or Ian Stobie via 0800 783 1904 or prime@ace.org.uk

The PRIME Initiative is a registered charity (No. 261794-2) linked to the National Council on Ageing and a company registered in England (No. 4184314). Registered address: Astral House, 1268 London Road, London SW16 4ER. President: HRH The Prince of Wales.

Plans to deal with pension shortfalls by encouraging people to work for longer received a dash of cold water today. Three-quarters of us could be too ill to work, Professor Sir Michael Marmot of University College London warns in a new report.

All but the richest Britons suffer years of ill health. People in the richest neighbourhoods in England live seven years longer than in the poorest, and enjoy an extra 17 years of good health.

Even if you exclude the poorest five per cent and the richest five per cent the gap in life expectancy between those in low and high income places is still six years, and in disability-free life expectancy 13 years.

Much more needs to be done to address health inequalities if raising the retirement age to 68 is really to mean people remaining active and working for longer, the report warns.

The report is not the work of some maverick outfit, but the final paper from the Marmot Commission - set up in 2008 at the request of the Secretary of State for Health. The Commission, chaired by Sir Michael Marmot, was tasked with finding the most effective strategies to reducing health inequalities in the country.

Fair Society, Healthy Lives (The Marmot Review)

Coverage at Times Online

In all the events and reports on worklessness that have come out over the last couple of weeks youth unemployment is always the central theme. But the evidence on youth unemployment is a bit like jelly - bright and brash on the surface, but 95 per cent water. You can’t use it to support anything. Only Polly Toynbee writing in the Guardian seems to have noticed that there was considerably more youth unemployment in the 80s than there is now.

Don’t get me wrong. I am not saying we should take all the public and private money that is spent on youth schemes away. The two groups that suffer the most when unemployment rises are the young trying to get a start on the employment ladder and older workers trying to stay on it – or get back on. Both groups require help - it’s not an either or thing.

The belief that all our problems will be solved if we throw everything into helping youth is irrational. It doesn’t even help youth long term. If older workers can’t get a job who will be paying to support them in their impoverished retirement? Today’s youth, one way or another.

In fact the interests of young and old are closer than you might think in other ways too. For example, schemes to help them often have the same flaws. So understanding what actually works when it comes to practically assisting one group can often lead to better initiatives to help the other.

Take the Future Jobs Fund. It is a Department for Work and Pensions initiative designed to create 170,000 additional jobs, mainly for 18-24 year olds who have been out of work for nearly a year. It does seem to be providing some new opportunities, particularly in work experience and training places. But it’s too early to say how many of real long-term jobs will remain when the money runs out in March 2011.

Here’s the problem. The Future Jobs Fund depends on there being employers ready to take government money to create sustainable jobs for youth. But will there be enough employers wanting to hire in the midst of a recession? Even with the incentive currently being offered of up to £6,500 for each unemployed young ­person taken on?

We really need to increase the number of expanding employers. One way to do that would be to put more effort into enterprise support for people creating new businesses. For example the over 50s – people who have seen recessions before. People with the experience, skills and knowledge to build businesses with a good survival rate, even in tough times.

So let’s put aside the false distinctions and the factional fighting. It’s often older people who can help younger people. And the other way round too.

Having said that, I’d not say no to a Future Enterprise Fund for the over 50s, should some wise government set one up. The point is the jobs the new enterprises create would help not just their older owners, but all of society.

If you’ve started your own business or have become self-employed after the age of 50, here’s a chance to get some free publicity. We’d like to hear from you. We’re looking for stories to put up on the case-studies section of this web site.

There are two ways of entering. If you use Microsoft Word just download this form (in Word 2003 doc format), fill in some details and email it back to us at primebusinessclub@gmail.com

Or if you prefer you can fill in the form immediately here online. You don’t need to fill in every field in great detail - just enough to give us the gist of what you are doing. We’ll also email you a link so you can return to your online form later and alter or add details should you want to.

You story could inspire others - and also warn them of pitfalls to avoid along the way. And it could also drive traffic to your web site, from both customers and journalists looking for stories. We’ll link to your web site from any case studies we write up.

Ideally your business needs to have got to the stage where it has started trading and have enough customers on board to say something about how things are going. We are interested in businesses up to about two years old - but older is acceptable if you can still remember lessons learned from your the early days of your venture.

We don’t guarantee we’ll put every business submitted up. We’ll contact you to go through your story if it’s suitable. Since we are not sure how many great stories we will receive at the moment we can’t promise to respond to everybody.

Influential voices are calling for the current “default retirement age” of 65 to be scrapped. The latest call comes from the Equality and Human Rights Commission (EHRC), which has said that workers should be able to stay in their jobs beyond the age of 65. The EHRC polled 1,500 workers, and found that a relaxation of the current rule would be welcomed by most. The House of Lords is likely to debate the issue today, as part of the debate on the Equality Bill, which is currently threading its way through parliament.

Currently employers have the legal right to force employees to retire at 65 - irrespective of whether or not the employee in question is still able to do the job. This was confirmed in a legal ruling in September of last year - but there were strings attached.

The High Court ruled that the default retirement age was not unlawful - but that there was now a compelling case for it to be scrapped. In practice this means that employers can still lawfully retire people against their will at the age of 65, for the time being. But the court wanted an urgent review of this provision.

The current Equality Bill does provide an opportunity to decide whether the default retirement age stays in place. The government has said it intends to get the bill passed before the general election this year. So there’s a chance here for the political parties to do more than make promises, but to actually vote on the issue.

Many organisations have already scrapped automatic retirement based on age, without waiting for a change in the law making them. They include Tesco, Marks & Spencer, HBOS, the Co-op Group and the Civil Service (for all but senior civil servants). An umbrella group called The Employers Forum on Age has been campaigning against forced retirement at 65 for several years.

However, Personnel Today magazine, which itself backs the campaign to scrap forced retirement, reports that some employers are still against changing the law, particularly now, in the middle of a recession. This is because it provides a useful mechanism for them to reduce staff numbers legally. Personnel Today quotes one HR director, who is against changing the lw, as saying “It’s useful to us now”.

Long term though forced retirement at 65 is likely to go. But this in itself won’t be enough to keep more people in work and earning. The jobs need to be there in the first place, for anyone of any age to do.

External links
Equality and Human Rights Commission summary of proposals

EHRC report (PDF) Working Better: The over 50s, the new work generation

Personnel Today on attitudes of HR chiefs pro and con

The Guardian Harman wants end to compulsory retirement age

Note:
The default retirement age and the state pension age are currently out of step. The default retirement age was set at 65 for both men and women in legislation that came into effect four years ago. Meanwhile women continue to be receive their state pension earlier than men, currently at age 60 while men have to wait till 65. But the plan is to harmonise the age for both sexes, increasing it in stages to 68 over time.

When will you get a state pension? Official State Pension Age calculator

Over 300 delegates from older people’s organisations poured into the Scottish Parliament at the bottom of The Royal Mile in Edinburgh on Friday 2nd October. This was the first Older People’s Assembly in Scotland of this size, and is certainly more than England, Wales and Northern Ireland have produced. There are a range of forums, panels, committees and local assemblies across the UK, but nothing on this scale or with this potential.

A few years ago the obsession was with younger people’s parliaments. Thank goodness the reality of an ageing society has at last sunk home.

For me it was a great pleasure both to be able to speak about the work PRIME could deliver to help the Scottish Government create a wealthier and fairer Scotland, and to actually enjoy being in the ten-year-old Scottish Parliament building.

Like many first assemblies in the past, the sub-texts of this very successful meeting were about the legitimate areas of discussion, the format that any future meetings of this kind should take to be most effective, and what the extent and limits of the Assembly’s power might be.

At this stage the proceedings of the Assembly will form a report which will go to, amongst others, the Members of the Scottish Parliament. But there then has to be a deliberation about the next steps.

Younger people’s assemblies are a chance for the young to learn political skills, but older people’s assemblies may well offer a chance for older people to apply the political skills they have learnt over a lifetime. I was certainly urging the Assembly to demand a proper programme of enterprise support activities for older people in Scotland.

If society continues to be so youth obsessed, will older people take their political revenge through older people’s assemblies? It will be interesting to watch, but even better to participate.
Further reading:
Report on event from Age Concern and Help the Aged in Scotland

The Guardian has published a long piece called “Starting a business - what the over-50s need to know“. Businesses started by people in their 50s are more likely to succeed than those begun by 20- or 30-somethings, it says, and author Patrick Collinson goes on to interview some examples of olderpreneurs.

PRIME’s free roadshow events receive a plug, as does the PRIME-Zopa loan.

Other contributors make some telling points.

Dr Barrie Hopson, author of The Rainbow Years: The Pluses of Being 50+ is quoted as saying: “Only one-third of the over-55s are in employment. Many have taken early retirement or redundancy payoffs, or are in ill-health. Yet the studies show that if you want to stay healthy, stay in paid work. It’s very difficult for those made redundant to come back into the workforce, with lots of evidence of age discrimination. Not surprisingly, when no one will give you a job, you have to create your own.”

Ron Botham, author of Nesta’s report The Grey Economy: Third Age Entrepreneurs Critical to Growth, says: “Traditionally, it has been assumed that entrepreneurship is a young person’s game, but research shows that the share of older entrepreneurs has increased and is increasing.

“If an entrepreneur starts up their business later in life they will have much more experience of work,” he continues. “Many older people are attracted to setting up their own business as they can actually work after the official retirement age without any pressure to retire.”

Cecile Trijssenaar has secured the first loan under the Zopa-PRIME Olderpreneur loan scheme. She is using it to help her set up her dating site TopMatch West London, which she hopes to have live in August.

Cecile, who is just 50, requested £13,000 to buy into and develop an online dating franchise called TopMatch, which she will operate in the area of London where she lives. She got the loan at an annual interest rate of 9.86 per cent, just 0.46 per cent above what she requested.

Once Cecile decided to buy the franchise, she looked for ways to raise money. She spoke to her bank and found that the chances of getting a loan were minimal.

So she turned to Zopa - an online lending marketplace. Cecile knew about Zopa from previous research, and liked the fact that the money was lent by ordinary people, instead of a big corporate bank. Cecile read about the Olderpreneur loan scheme on the Zopa site, and decided to contact PRIME.

You need to pass a number of requirements to be accepted for the Zopa-PRIME loan. You must be over 50 (or just about to be so you will be when the loan is taken out), and can request no more than £15,000. You must have lived in the UK for the last three years, and have a UK bank account registered in your name at your home address.

You must also not have taken out a loan in the last four months, and vitally you must have a strong and realistic business plan.

Cecile describes her dealings with PRIME in the following way:

“PRIME were ruthless. They were very thorough, but really really good. It focused my mind. I realised that up until now I had been very fuzzy, but Siu (PRIME’s Loans Manager) asked for everything to be really detailed and precise and I thought that was fantastic, and very helpful.”

Cecile Trijssenaar

Writing a good business plan - where you have to outline things like how you are going to make a profit and detail both the strengths and weaknesses of your proposed venture, will help you to get funding. You also need to think about your marketing strategy, and how sales can be realistically achieved.

A good credit record is also a definite advantage, and this seems to have helped win the trust of many of Cecile’s lenders - who are ordinary members of the public lending via the Zopa exchange. If you have a county court judgement (CCJ), loan default, or have been unable to repay a loan, you are not likely to be successful.

Once cleared by PRIME, Cecile’s next step was to apply online for a Zopa listing. This involves three stages; registration, passing Zopa’s online credit score and risk asssessment, and finally getting your pitch for a loan up on the web site’s “listings” section, You can do this online or on a paper-based application if you prefer.

If you are accepted as a Zopa borrower, you are then able to promote your borrowing needs to potential lenders. Your pitch basically sells your business idea, and explains to lenders why you are a ‘safe pair of hands’ and why you can be trusted to repay them.

You can see Cecile’s listing here.

Potential lenders viewing your listing can ask you questions. “This probing by the public can be very helpful”, says PRIME’s loans manager Siu Woo, “and may reveal issues you haven’t thought of. But you are under no obligation to answer if you feel a question is too intrusive.”

Cecile made it through all the hoops. Within three days she got offers for the full amount. With money now in the bank, Cecile can get on with launching the business. The actual launch day is scheduled for the first week of August

Unlike other dating sites Cecile will be personally vetting each individual, which means she can get a more accurate view of what people are like, and what sort of person they are looking for, as well as filter out anyone who seems untrustworthy.

Cecile says “I had a friend who met up with a guy via a dating agency, and afterwards she got a lot of abusive text message. I want to cut out situations like that. TopMatch West London will also be cheaper than a lot of dating sites, costing £399 for a year.”

Cecile has a background in the TV and film industry, but wanted extra stability for her five-year-old son. She initially set up a support website for those trying to adopt internationally - something that Cecile is passionate about. But though this succeeded as a project, the site has too few members to become the basis of a profitable business. So Cecile decided she must look elsewhere to find an income.

“I set up criteria for what I wanted to do. I wanted to work from home. I wanted flexible hours so that I could be with my son. I didn’t want a boss breathing down my neck, and I wanted to do something that made people happy.”

Cecile searched for a job that fitted her requirements, and came across an advert for the Top Match franchise on www.workingmums.co.uk. She says “I immediately thought, ‘that’s what I want to do’, and started to get excited.”

The franchise costs £11,950. This includes a five year licence (that can be renewed at no extra fee), two days training, a laptop and software. The franchisor also promises £500 worth of marketing, £1,500 worth of promotion, continuous IT and business support, legal fees and office set up costs.

Cecile will have exclusivity for the TopMatch franchise in the West London area, which has an estimated 340,000 singletons. But she will have to pay the franchiser £69 whenever she signs a new member. There is a 90-day money back guarantee if the business does not take off, and an option to sell it back to the franchiser at any time for the same price.

Contact:
Top Match West London, www.westlondon.topmatch-uk.com

Further reading

1. More about Zopa-PRIME loan fund and how to apply.

2. More about franchising. Download PRIME’s free 70-page guide, which includes a jargon buster and warnings about pitfalls to avoid.

Anne Walsh, 53 from Manchester, went from BT operations manager to quirky craftswoman, when she applied for voluntary redundancy.

BT operations manager Anne Walsh was the breadwinner for a disabled husband and three children. Fed up with her office job, Anne promised herself she would change her life when she turned 50. Anne applied for voluntary redundancy, sold her Porsche, and bought a van. She began to make gifts for family friends, and to sell on eBay. Anne made flowers out of socks, cakes and trifles out of soap and face cloths, and large cakes out of baby’s nappies. Anne says ‘the cakes definitely started as a hobby, but more and more people wanted them, and it soon became a business.’ My Unique Gifts now caters for a wealth of occasions from births and weddings to dog and cat pampering, with products ranging from £3:95 to £55.

Research

Anne’s first idea was the ‘nappy cake’. This is a fake cake made of disposable nappies, which Anne saw on holiday in San Francisco in 2001. Anne researched the product on the Internet and found that though extremely popular in the US and Canada, the nappy cake was barely on the British market. Anne purchased a ‘teach yourself’ DVD, and began to experiment. My Unique Gifts now boasts a whole range of nappy cakes from single to five tiered, complete with 96 nappies, two bottles, a pair of baby socks, baby suit and matching hat or bib, receiving blanket, crystal keepsake, photo frame, and soft toy.

Training

When Anne registered with PRIME, she was told where to go for business advice. She attended a free HMRC Business Advice Open Day, where PRIME hosted a seminar on working for yourself. Anne then booked herself onto a free HMRC workshop on self-employment tax issues. Anne says ‘both events were extremely helpful in getting to know the basics.’ But she did leave some things to the professionals, and hired a bookkeeper to document her accounts. The rest of Anne’s training was simply trying new things and learning as she went along.

Marketing and development

An early marketing tool was to circulate an email round Manchester College. A family friend, worked at the college, and sent out pictures of Christmas cakes that were on offer. This was very successful, and large orders flooded in. Anne now keeps her own mailing list, and sends out details of new gifts, or seasonal promotions.

Anne attended a craft fair with her Daughter in the Lake District, and was thrilled by the positive feedback her gifts received. The buzz spurred her on and Anne began to go to craft fairs and farmer’s markets on a regular basis. This brought in repeat customers, and the business began to expand.

Anne is now considering larger trade markets and has applied for her first two day event, the Stars and Stripes Classic American Car Show in Cheshire. Larger markets are £25 - £60 for the pitch; more expensive than the small craft fairs Anne is used to. But they provide a great opportunity to hit a larger and more commercial audience.

When going to get a logo painted on her van, Alan, the graphic designer gave Anne a tip. He recommended investing in a 0800 number. This means that if Anne’s real number (or ghost number) changes, the business line will remain the same, and customers will not be lost. The freephone number costs Anne about £60 a year. Calls cost an extra 4p a minute, but Anne keeps costs down by using her answer machine to take messages, then phoning people back from her landline, which has free minutes.

Anne’s main marketing weapon came in the form of stepson Steven Walsh. Steven is the Director of Marketing Success Unlimited, a company which specialises in branding and marketing campaign management, with a focus on online marketing. Steven provided Anne with business cards, letterheaded paper and flyers, and crucially created her website and online shop. This made Anne’s products more visible and accessible to customers outside Manchester. It also allowed people to pay by credit or debit card, which made the transaction process easier and safer for customers.

Problems

Anne’s main problem was finding suppliers that would keep the costs down. Where the Internet had proven an invaluable research tool in other areas, a lot of old warehouses were just not online. The Internet pointed to expensive and commercial manufacturers, and Anne had to dig a lot deeper to find wholesalers that provided a cost-effective price. Word of mouth became the best resource here. Anne asked friends that worked in retail, and got some good leads. Finally she was able to get her materials at a bargain, and bring down the asking price of her own gifts.

Future

Anne’s business is steadily growing and expanding. With each request, more socks and nappies are taking over the house. On 1st June 2009, Anne opened a shop and workshop, giving her business more space and achieving her target for 2009. Free Cobwebs (information factsheets) on renting, buying and choosing business premises are available from PRIME on request.

Contacts

Anne Walsh
53B North Road
Droylsden
Tameside
Manchester
M43 6NN
Freephone no: 0800 043 7156
Website: www.myuniquegifts.co.uk

Upward Curve PR has chosen PRIME as its Charity of the Year 2009 to 2010. “We are so pleased to be able to offer PRIME PR support”, says Helen Ashley of Upward Curve. “We chose them because we felt that with our aging population and the current recession, the charity’s focus is particularly relevant.”

“The over-50s face huge problems of unemployment and age discrimination in the job market. It’s great that we’ll be able to work with PRIME to help them raise awareness of these issues and let over 50s know how PRIME can help them set up on their own.”

Laurie South, PRIME’s chief executive, said “Upward Curve has exactly the right sort of experience that PRIME needs. We are now better able to help more people over 50 start in business than at any time in our history. But we need to get the message of what we can do out there and in front of people. We also need to keep support coming in, so we can scale up our services and make them available more consistently across the whole UK.”

Upward Curve PR is an award-winning PR and communications agency working mainly with clients in the public and not-for-profit sector. Based in Kingston near London it has recently celebrated its tenth anniversary, and brings this experience plus a strong ethical stance to the advice it offers.

Parents for Children (now part of TACT), an adoption charity specialising in finding homes for ‘harder-to-place’ children, was the Agency’s Charity of the Year in 2008. Edwina Brocklesby, Director of Parents for Children, said “I could not speak more highly of Upward Curve. They have transformed the potential of this agency and raised our profile beyond our wildest dreams.”

PRIME was one of 100 charities, social enterprises and voluntary groups applying for the honour this year.