‘Supporting young entrepreneurs: the Government will shortly pilot a Young Entrepreneurs Allowance, providing successful applicants with support towards their living costs during the first year of their business’.
HM Treasury: p16 extract from the Budget paper, ‘Entrepreneurship in the UK: Start. Scale. Stay’
The Budget may not have done much to tackle the welfare overload (which will be £430 bn in 2027-28), but those with an enterprising approach will have been relieved to see that it does support risk takers and entrepreneurs. For example, not only is this recognised in maintaining the current rates on Capital Gains Tax, but a new ‘Founders Relief’ re-instates the Entrepreneur’s Allowance for high growth, innovative businesses.
However, it's particularly encouraging to see the plans for piloting a ‘Young Entrepreneur’s Allowance’ in England, offering successful applicants support with living costs during their first year of starting a business. We'll have to wait another few weeks to see Alan Milburn's report on tackling the challenge of nearly one million young people not in education, employment or training: but this Young Entrepreneur’s Allowance initiative should clearly be an important feature therein.
In the old days, potential entrepreneurs were encouraged to get a regular job for the first 15-20 years of adulthood in order to build experience in the workplace before setting out on their own. Even then there were challenges with that approach as, by that stage in life, people would often have family responsibilities and commitments; and therefore may have preferred not to take on additional risks. But now the tools of the future are much better understood by the young, and the opportunity to set up a successful business therefore comes much earlier.
The challenge is to undergo an attitudinal transformation which can move the dial from a young person's stressful environment — and it is much more stressful today than thirty years ago — and which can help in defining the foundational elements of one’s future life, building a plan which will move towards that compelling future, and living a life rhythm which supports the basics and all aspects of that plan.
In case you're wondering where the last sentence of our opening section came from, you'll find it on the ‘Approach’ tab of the Mindfort website to which I was introduced by listening to the BBC Bottom Line episode last week. I've been an interviewee for Evan Davies on The Bottom Line myself, and I have much respect for his constructive approach to exploring positive ways forward.
Last week he interviewed Riordan Maynard and Sushovan Hussain, two originally successful business people who experienced huge falls from grace, both ending up in U.S. prisons for five years. Evan named the episode ‘Redemption’; it's an extraordinary pair of experiences which have led in both cases to very positive outlooks for the future.
Riordan Maynard has taken a particularly interesting approach, designed to achieve attitudinal transformation. This is a journey which is particularly significant for young people who take The Share Foundation’s life skills programme Stepladder Plus, and the charity is currently working with Sussex University to assess its effectiveness in reducing NEET rates for adult care leavers. Step 4 is particularly revealing in this respect, when young people set out in 250-500 words their plans for adult life.
At present Riordan Maynard provides his service for individual entrepreneurs, but in the new year he plans to enable much wider access. I look forward to exploring with him whether his approach could provide an additional line of support for adult care leavers.
As he says, you have to be mentally strong for building a company, and I can confirm from my own experience that is definitely the case: at The Share Centre we started with just three of us and a blank sheet of paper. But that mental strength does not need to be intrinsic — it can be grown and developed, and Mindfort shows how that can be achieved.
So, if the government is really committed to encouraging young entrepreneurs throughout England, Riordan Maynard could have a great deal to offer; this is particularly important for all those NEET young adults, because a long spell of time out of employment, education or training can leave people feeling very despondent about their future prospects.
I recommend taking a good look through HM Treasury’s prospectus for entrepreneurs, ‘Entrepreneurship in the UK: Start. Scale. Stay’. It reflects a determination to move on from the perennial UK bugbear that has resulted in so many successful innovators moving overseas in order to build their businesses.
There is, at last, a clear acceptance that ‘Government cannot create the companies of the future. Entrepreneurs do that’, but it goes on to say that Government can help them to succeed by opening up opportunities, improving access to finance and removing barriers that hold businesses back.
Identifying an early source of revenue is a key feature of successful entrepreneurship: it seriously reduces the need for additional capital funding, and therefore allows you to keep control of your venture throughout the early years. I call such revenue ‘surrogate capital’ and, for young people in their early twenties, it could be substantially boosted by the personal capital proceeds of their Child Trust Fund.
For that early source of revenue, it's worth exploring what people are most prepared to pay for. I asked Google AI that question, and its answers include saving time and convenience, reducing risk and gaining security, and ‘status and exclusive experiences’ such as memorable travel and entertainment.
There's a real mix of opportunities here for all young people who are prepared to look ahead with optimism. So, let's hope that Alan Milburn will be reading John Healey’s prospectus on UK entrepreneurship and his plans to pilot the Young Entrepreneur’s Allowance in England, and that he will include this option in the opportunities he sets out for those one million young people without education, employment or training.
Gavin Oldham OBE
Share Radio