Lessons from Phoenix: Women
Capturing the Lessons from the Phoenix Development Fund WOMEN IN ENTERPRISE
Introduction - participating projects:
All 3 women’s enterprise PDF projects participated in this review:
Women’s Enterprise & Employment Training Unit (WEETU) - Full Circle. PDF allocation £750,000 (original application £1 million) 58% of total budget.
Women’s Business Development Agency (WBDA) - In Your Time, The Patience Model. PDF allocation £250,000 (original application £500,000) 27% of total budget.
Train 2000 Ltd - Promoting Opportunities for Women in Enterprise and Regeneration (The POWER Programme). PDF allocation £795,000 (as original application) 41% of total budget.
In identifying the lessons learned from the PDF ‘Building on the Best’ both qualitative and quantitative data was collected using the following methods:
Review of individual organisational PDF project reports
Project manager and delivery personnel focus group
Sample client interviews
Review of other information including client service evaluations, stakeholder perceptions with project social accounts.
All 3 projects are Women’s Business Centres constituted as Companies Ltd by Guarantee providing women only enterprise and employment support services to women living in Merseyside (Train 2000), Norfolk Waveney and East Suffolk (WEETU), and the West Midlands and South West (WBDA). ‘Building on the Best’ PDF was used to scale up existing programmes, develop and test new methods of working, identify and work with additional target groups and broaden geographical coverage.
Projects’ Aims included:
To improve, scale up and roll out an integrated business support model developed under Phoenix Round 1 and expand it’s current target group
To provide bespoke higher-level skills programmes and management training to support the development needs of women owner managers to support the growth of their business and provide one to one monitoring and specialist business support
To address the issue of gender segregation within business start up by developing measures to link education with enterprise
To contribute to the effective implementation of the strategic framework for Women’s Enterprise by developing more formal mechanisms for gathering social policy evidence in order to win the hearts and minds of mainstream providers of the value of women’s enterprise and the role played by specialist providers
To recruit, train and develop ten women business advisors competent in supporting Women in Enterprise
To support women to set up and grow micro businesses through training support and access to micro lending circles
To promote micro lending and loan circles across the UK through the sale and licensing of the Full Circle programme
To promote the use of IT and E Commerce through the provision of practical user friendly training programmes and tool kits.
Target audience included:
Women in pre-determined regions/sub regions of England, both rural and urban who are economically active or inactive, are from a disadvantaged community, a BME community, have mild to moderate mental health problems, are ex offenders, lone parents or women who have a disability. Each deployed a variety of common tools and approaches. Informed in part by previous experience which had been rigorously monitored and evaluated,
Range of models used
Programme elements common to Participating Projects
Gateway Services/Signposting service
Initial advice clinics at related events
Accredited personal development and business training programme
One to one business counselling
Job education and training service aimed at up and development clients and women seeking employment and training.
Customised Elements building on organisational strengths or an identified local need
Pre-Enterprise training programme
Lending Circles, and Loans
High growth Business Programme, and Business Development Workshops
Enterprise Education package
Science, Engineering and Technology (SET) training
Higher level Management Skills Training
Business Advisor Training Programme, and
The development of a Social Policy Framework to track patterns of internal and external organisational service design and delivery that acted as barriers to would-be women entrepreneurs.
The range of products and services offered contributed to the creation of a holistic and integrated business support service. The flexibility of programme delivery enabled clients to access a menu of services suited to their needs and dependent upon their place in the business planning cycle. The client profile, outputs and outcomes achieved through this type of provision demonstrates the efficacy of providing an integrated business support service available to all women and customised to their personal circumstances. (Appendix 1)
Approaches to Targeting, Marketing and Outreach
At the outset, each organisation undertook a market segmentation exercise which served to provide a number of target group profiles. This profiling process enabled service delivery specification to reflect the needs of clients. In order to understand the complex nature of need and to unpack the issues relating to low business start up rates amongst women the projects used a matrix adapted from JRF Employment Matrix 2003 (Appendix 2). This matrix identifies what factors need to be considered when designing specific interventions and reiterates that women are not a homogenous group and therefore need bespoke interventions to address barriers to self-employment.
Previous design and delivery experience had demonstrated inappropriate assumptions about the type of women choosing a gender specific business service. It is often assumed that women educated to degree or postgraduate level have sufficient confidence and knowledge to seek out organisations such as Business Link. Evidence shows that women who had held senior management and executive positions, possessing graduate and postgraduate qualifications were equally as likely to access the specialist sector services as women with no qualifications nor paid employment experience.
Profile Employment Status 48% women unemployed 52% Employed Education Attainment Number of Women below Level 2 = 250
Number of Women with Level 2 and above = 168
Not Declared = 219 Number of Women below Level 2 = 176
Number of Women with Level 2 and above = 249
Not Declared = 226 (Source: Train 2000 profile)
Women reported accessibility, empathy and an awareness of their specific barriers as key influences in their decision to use a women only service. A recent report published by Prowess entitled ‘The F Factor’, details the different approaches to delivering a women’s enterprise service and characterises support rendered by gender specific or specialist provision as transformational and that provided by mainstream agencies as transactional.
Raising awareness of services
There was evidence of common approaches to promoting an enterprise culture and engaging with the various target groups:
Using formal and informal networks including regular presentations to appropriate organisations including CAB, Job Centre Plus, connections to women’s groups, special interest groups, Sure Start, Parent and Toddler groups and community organisations.
Using community influencers to promote the service. In many communities there are people who are widely trusted and respected. This is particularly true in certain cultural communities - their support of the services proved vital in encouraging broader participation.
Using user friendly literature in different languages and formats, highlighting the features and benefits of the WE service.
Having a presence at community and special interest events.
Using the free press to promote programmes and showcase businesses established by local women thus providing positive and more importantly, relevant role models.
Use of wider media, including local radio, geographical newsletters and community of interest newsletters and award ceremonies.
Hosting events and ‘piggybacking’ upon other events designed to promote enterprise where appropriate.
Using community venues, avoiding religious buildings or formal educational establishments which some may associate with past negative experiences.
Use of multi-lingual enterprise promotion and business advisor personnel.
Ensuring that project personnel reflected the cultural diversity of target communities. Client profile data indicates that women from BME communities participated in the programmes in significantly greater numbers relative to their numbers in the population.
A key indicator of the awareness raising approach is the number of women from diverse backgrounds accessing the services. Traditional methods of raising awareness more often than not fail to reach these groups due to a variety of reasons including:
inappropriate targeting e.g. using the same message for all target groups
unsuitable venues e.g. holding training and awareness sessions in city centre or out of town hotels
flyers and promotional leaflets which are available in English only and littered with jargon
inappropriate use of media e.g. advertising services in paid for newspapers as opposed to local free sheets
offering mixed gender training as the only option, which automatically excludes certain cultural communities and women lacking confidence
lack of childcare/caring support.
Each project has developed an outreach tool kit which is a step by step guide on how to effectively engage with groups who are considered hard to reach.
Provision of an outreach service is essential if the programme is to reach women from disadvantaged communities and other underrepresented groups in general. The lack of affordable, accessible public transport is a significant barrier for women living in disadvantaged communities, living on benefits or fixed incomes and who have caring or domestic responsibilities. Lack of confidence and low self-esteem are also barriers, which can be overcome by providing services within a known safe environment, eg community facilities from where other services are delivered particularly childcare services.
The Role of PDF and SBS
There were a number of consistent messages reported in relation to the role of the SBS and its impact on delivery organisations:
Programme Commissioning: All projects reported that they considered the project commissioning process to be very effective. Notable points were the application process itself which was deemed non-prescriptive and allowed projects to submit proposals which would contribute to learning and new model development. External and independent appraisal panels strengthened trust and accountability by effectively separating SBS PDF staff from project application decisions.
Programme Management: The PDF had effective programme management processes in place from the outset, eg the project reporting process, external financial management and monitoring, individual project support from PDF staff.
Committed to Discovery: Unlike other development funding initiatives the PDF programme sought feedback at all stages on the models being tested and developed rather than placing emphasis on outputs outlined.
Showcasing and Sharing Practice: The PDF programme excelled in this area by facilitating and encouraging sharing of both successes and failures within model development.
“PDF has been the most relaxed and approachable funding stream we have ever had the fortune to work with. One of the original purposes of PDF was to encourage innovation and learning and this was reflected in a flexible and approachable attitude, which allowed us to learn, review and amend activity throughout the course of the programme, which proved invaluable. Without exception, the PDF programme has been a joy to work on and the team at the SBS have been extremely friendly and accommodating”.
PDF is one of the lightest touch funders we have ever worked with and this attitude has definitely enabled us to just get on with delivery, experiment with new methodology and make a success of supporting women in to start up in business”.
These statements have universal resonance. The PDF provided an uninterrupted 5-year funding stream which enabled projects carry forward the learning from Round 1, further refine their approach and produce the impressive results. There was consensus that this facilitated women’s enterprise to rise up the national political agenda.
The role of the SBS and particularly the SBS team cannot be underestimated in contributing to the undoubted success of this programme. The fact that this was a national programme with national criterion, not driven by postcode, was also vital as it enabled projects to work together in a more meaningful way.
“My name is Elaine. I am a mature woman who for over 25 years worked within a well known very successful family owned hardware business. Last year I left the business as my brothers who held a majority shareholding were frustrating me. This was a very scary time for me. My friends assumed that because I appeared successful family business I would have no trouble setting up something else. They did not know that I did not have any confidence. The thought of starting a business of my own terrified me until I visited Train2000. Not only did they boost my confidence to high levels, but enabled me to identify and acknowledge my design and retail skills which previously I had dismissed. They supported me in putting together a business plan for an interior design and furniture retail company. I have now been running my business for almost 12 months and I am going from strength to strength. I am opening a new shop and will be employing four staff.”
“My name is Michelle and I am a lone parent and a mother of seven children. I am in my late thirties and have had a number of dead end jobs over the years. I spent most of my time looking after the children. In April 2000 I went to work for someone who supplied sandwiches to trade customers. Three years after I joined the owner decided to sell the business. I began to think that maybe I could take it over. I had no educational or business qualifications but I was confident that I knew enough about the business. I approached the bank that surprisingly gave me a loan. I soon found out that I had no other business related skills. Within the year I had spent the money but still did not have the lease sorted out. I was in danger of loosing everything. I got in touch with Business Link who could not help as I was in retail – even though I was selling to other businesses. I then contacted Train 2000 and was fast tracked through their system and got a £12,000 loan. Apart from the money I received business advice, which was equally as valuable for me. I would advise any women thinking of setting up a business to get proper business advice before applying for a bank loan. I am expanding my business on a daily basis.”
Any unintended outcomes, positive and negative
A significant positive unintended outcome has been the strength of the network built up not only between the PDF ‘Building on the Best’ projects but also other women-focused organisations. Sharing and implementing best practice across the sector led to an increased demand for the service and a growing awareness of the role which women’s enterprise plays in the economy. With varying degrees of success women’s enterprise was shifted from a social exclusion issue to an economic issue. This is evidenced by the public commitment of the Chancellor and other key ministers to the issue; the establishing of women’s enterprise as a government priority; the action plan devised by the Women’s Enterprise Panel - to be driven forward by the Women’s Enterprise Task Force (WETF). The WETF will aim ‘to ensure that every woman wherever she lives, has access to appropriate women friendly advice and all of the other support measures required to enable business start up’.
Other examples of unintended outcomes include:
an increasing demand for women led social enterprises
a recruitment service for a building society (Norwich Union)
a county-wide Women’s Association comprising of clients who had set up in business, secured employment or further training
there were also implications of working with a package of funders with changing strategic priorities and varying reporting requirements
women who have been through the POWER, Full Circle and Patience programme and who have set up in businesses choosing to return to the programmes for developmental support
equally, women in existing businesses seeking development support choosing the WE targeted service rather than mainstream.
On the negative side, there is a very real concern that the lessons learned from PDF are not being recognised. The Regional Economic Strategies recently published by RDAs would suggest that women’s enterprise is very much on the periphery.
Further evidence of a lack of recognition can be found in the financial allocations, which RDAs are preparing to make for the support of women’s enterprise in their regions. These vary from an allocation of £400,000 out of a business development budget of £202 million in the North West to £600,000 out of a budget of £106 million in the South East.
This coupled with a 206% increase in demand for services generated through PDF is creating a disconnect between increased demand and current supply. Post March 2006 the three PDF projects are threatened with closure. This will result in a diminution of service across the regions and will impact directly on women, particularly from those from disadvantaged communities who feel unable to access mainstream business support.
Overall Impact of PDF on the theme
PDF funding enabled all 3 organisations to lever in additional local, national and EU funds to the value of £4,158,052. It enabled them to vastly improve the quality of service in that they were continually able to refine their models to meet the needs of clients as they were identified. Train 2000 developed a model to test the cost effectiveness of delivering the PDF programme using their client profile as a basis. This clearly indicates that the benefits to the public purse heavily outweighs the cost and in fact year-on-year the cost of providing the service is less than the benefits which would have been paid to the women who either set up in business or secured employment. (Appendix 3)
The key to increasing the number of women owned business is the provision of an integrated package of women friendly business advice and access to finance and central to achieving this aim is adequate resources. PDF has enabled the testing and costing of the programme (between £4,000 and £5,000 per business start up). This compares favourably with initiatives such as NES.
The current funding for women’s enterprise support is primarily on an ad-hoc basis which militates against sewing the seeds of an enterprise culture and building capacity within the support sector. A commitment to long term funding is vital, particularly for organisations demonstrating best practice.
In the delivery of the PDF several other strategic issues were identified which included:
Job Centre staff’s limited understanding of the enterprise option, coupled with high staff turnover or movement within the service effecting continuity for clients and information.
The majority of RDAs hold the view that Women Enterprise is not a priority area and this is reflected in their respective Regional Economic Strategies and Strategic Investment Strategies.
The limited strategic integration between DTI, ODPM and DFES priorities.
The limited Local Strategic Partnership and local authority recognition of the importance of women’s enterprise development as an economic driver.
A continued reluctance of Business Link to prioritise women’s enterprise as it is considered “a low priority as it is at the lower end of the market”. There is a need to encourage Business Links franchisees to place an emphasis on women’s enterprise and women-friendly business support provision.
The fact that women’s businesses start-ups are still primarily service based, which means that there is a need for further levels of occupational desegregation.
Innovation and Best Practice
Innovative approaches – what good practice looks like
The provision of an integrated business support programme catering for women from the pre pre start up stage through to women seeking development advice is in itself innovative. There are no examples of this type of holistic provision being offered in the mainstream. The Strategic Framework indicates that this type of intervention is essential for women who have additional needs creating barriers to participation including:
lack of confidence,
childcare and caring responsibilities,
having English as another language
poor access to finance
The option of acquiring a nationally recognised qualification has proved attractive to both WEETU and Train 2000 clients but less so for clients of WIBDA. For many women this business qualification is the first they will have achieved and contributes to raising confidence and self-esteem. Train 2000’s Business Advisors’ Training programme is innovative in that it deliberately targeted women fro BME and Disabled communities. As a result 40% of trainees came from BME Communities and 20% of programme participants are disabled.
Good practice is evidenced by:
The out reach model
Payment of childcare and dependent care costs
Provision of day ‘evening’ courses
Provision of resource material in other languages and formats
Using community facilities
Using Social Accounting and Social Return on Investment to measure impact.
Each organisation considers that the PDF funded projects are in and of themselves the essence of good practice. The Patience Model, Power Programme and Full Circle projects are deliberately inclusive, women sensitive and culturally aware. From targeted outreach activity to training delivery, clients secure a holistic service and customised service designed to enable women from diverse backgrounds consider the option of self-employment. Furthermore the range of programmes also enables the addressing of skills deficits and limited qualifications.
In addition the JET services and Personal Development programmes on offer have contributed significantly to women being able to increase their confidence and self esteem. The linking of the JET service to enterprise training has provided a progression route for women who have considered and subsequently discarded the self-employed option. JET or employment advisors have worked closely with this group and across the three projects 66% of women using the service progress to employment, further training or education. This service has been highly regarded by the clients and a quote from a Train 2000 client sums up the views of many:
“Thanks to, your training and support I’ve just been appointed … so I’m back in full time employment and loving it. I’m sure I’m only one of your success stories but your service did help to make a difference to my life … I can’t thank you enough.”
The projects were all able to share best practice with others in the UK, Europe, US and China, as keynote speakers, workshop leaders and/or delegates. For instance, the Social Accounting Model has now been adopted in Slovenia.
Products, toolkits and materials developed
Full credit. A toolkit to enable other projects and organisations around the UK to run a Full Circle type of project. This has resulted in new projects being set up in East London, Manchester, Liverpool and Hertfordshire.
Development of an intensive one week ‘Is Enterprise for Me?’ training programme targeted at those who are at the very early stages of planning a business.
A self-study pack to enable those who cannot access full training courses.
An on-line one to one business counselling service accompanied by an accredited E-training programme.
Development of a range of evaluation and accounting models including a Social Return on Investment Tool in partnership with the New Economic Foundation which is designed to evaluate economic impact.
A Social Accounting model developed with the Social Audit Network, which measured the social, economic and environmental impact of the project.
One and three day ‘Fast track’ business training courses.
Outreach Strategy Toolkit.
High growth Business Acceleration programme, a unique 3 week intensive training programme and toolkit guide.
Refugee Integration Programme that equip clients with the confidence, knowledge and skills on how to set up a business in the UK.
Education packages and games which forms part of an enterprise package offered to schools and colleges.
Accredited business training programmes, varying in length from one day through to six weeks, reflecting the needs of individual clients. Each organisation was able to develop a comprehensive range of both paper and e-based lessons to support the client learning.
Accredited Business Advisor Training Programme targeting women wishing to become business advisors. Using expertise gained from undertaking a Business Advisor Development programme for the Slovenian Government, a refined model was developed in order to train women business advisors on Merseyside. 40% of participants are from BME communities whilst 20% declare themselves to be disabled.
Partnerships and linkages were established across the public, private and third sector. These included Business Links throughout the regions, RDAs, Princes Trust, Prime, Job Centre Plus, Connexions and the Next Step Network. In the wider network linkages were established with banks CDFIs universities, colleges of further education, CABs, community organisations and other specialist advice organisations such as the Shaw Trust. Furthermore each project contributed to a range of consultation documents including their regions’ Regional Economic Strategies.
Formal and informal networks comprising of such organisations is essential to the ability of delivery organisation to attract and reach women who would not consider using the services of a mainstream agency. There does however appear to be an issue over the number of referrals received by projects from the mainstream business support organisation, Business Link. This was particularly problematic in the West Midlands where WBDA received only four referrals over the lifetime of the project.
Specific programmes and evaluation tools were disseminated through the Equal funded AWE partnership via the CDFA contributed to the debate on access to finance.
Projects are now in a position to deliver a coherent holistic business support programme for women from diverse communities. Their products and services which can be replicated across the UK either as standalone programmes or as toolkits addressing particular issues such as access, targeting, engagement, skills and qualification deficits and unequal access to finance, have been developed.
The Business Advice Training programme model in addition to the other client centred programmes would provide an opportunity for the projects to garner income from either franchising or direct delivery. However, funds arrived from this exercise would by their nature be limited and dependent upon funders recognising the value of such programmes.
WBDA is developing the MONETA consortium that is seeking to identify sources of women friendly finance. WEETU are now delivering a pensions awareness programme for the DWP – whilst this is not related to enterprise it will provide an additional income stream. Each project now has saleable products and services and is considering forming a consortium to market such products and services.
In relation to how the service is to be funded in future it is clear that for a significant number of women at the start-up stage, paying for services is not an option. The issue of future development is currently clouded by the uncertain future of the sector in general and WEETU, WIBDA and Train 2000 in particular.
Key Lessons Learned - what would we have done differently
WEETU gained significant learning from delivering this PDF project and have identified a number of improvements that will be incorporated into future programmes. They would expand their portfolio of lending to include personal lending and business lending outside the peer-lending model. They would separate the lending from their business support functions, as their current relationship seems to have a negative effect on both. The Lending Circle would become a Business Support Circle supported by a business coach to give the circle added value for the participants. As an alternative to the Business Support Circle they would also offer individual coaching and mentoring as the support circle model is not the most relevant for everyone.
WBDA stated that they would keep the same goals – i.e. empowering women experiencing social and economic exclusion to start and sustain their own businesses. However, they will constantly look at adapting and changing the model and create additional spin-off projects (i.e. high-growth business acceleration programme for women; a computer-based business simulation game for girls etc), all with the ultimate aim of increasing the level of female entrepreneurship.
Train 2000 would have, at an earlier stage, expanded the range of training programmes to include intensive one-day development workshops that latterly have proved so successful. A significant proportion of PDF funding was allocated to the business advisor training programme, but the organisation underestimated the impact of integrating 10 new members of staff into a well established staff team. Arguably they should have implemented an organisational development plan at an earlier stage.
Overall projects are confident that their individual programme in terms of products/services and delivery were appropriate to serve the needs of diverse client groups. Client satisfaction was measured at each stage of the process and feedback acted upon when appropriate. Train 2000 produced social accounts and the SROI Impact model was used by WEETU. Ongoing monitoring and evaluation enabled projects to refine products and service delivery and develop new products/services to reflect emerging needs.
What is success – what really worked and why
Success is an increased awareness of the opportunities provided by enterprise across a whole range of stakeholders and not confined to the women themselves. Notwithstanding the lack of financial support from the key funding organisations, significant evidence exists to demonstrate that women’s enterprise is recognised as a key driver in the economy, e.g. chancellor statements, the Strategic Framework, Enterprise for All, and the DTI Business Plan to name but a few.
Success must also be measured in the numbers of women (5,986) who have accessed the services over the past three years. A significant majority of these women did not in fact move into self-employment, however many did improve their employability and secure a job, a promotion, qualifications or proceeded to formal study at FE or HE.
In terms of a holistic model of engagement, a sophisticated approach to delivery of outreach services has proved highly successful whether in a rural or urban environment. Each organisation cited the provision of a women only service as being a factor for their clients choosing targeted business support rather than mainstream provision. Their ability to explore their ideas in a supportive environment of their peers is key to the positive experience they had. The maintenance of an ongoing relationship with clients often over the course of many years is one of the strengths of the targeted service and distinguishes it from many purely transactional enterprise support models.
The creation of high standard, bespoke course materials and learning activities which are tailored to meet the needs of our client group, coupled with child-friendly training times, and travel and childcare allowances which reduce the barriers to women accessing the services, is a further distinguishing feature. Furthermore offering training on an outreach basis in community venues enabled wider participation and access.
What did not work and why
Whist being successful in raising media awareness through showcasing women business starts, contributing to press features and initiating women’s business awards and at a national level by contributing to the women’s enterprise debate, the projects appear to have failed in relation to engaging the key funding organisations. This, despite numerous efforts via a variety of consultations including respective RES consultations, indicates that a new and radical solution must be provided which includes consideration of the relationship between mainstream and specialist providers and a plan to ensure that resource allocation is made more equitable. This debate requires political intervention at the highest level.
There now exists a unique opportunity to drive up the number of women owned business in the UK. Significant amounts of public funding through the PDF have enabled the development of a first class infrastructure for women’s enterprise support across a number of regions. This well developed infrastructure whilst still very patchy, has helped to deliver an impressive set of outputs and outcomes and has enabled projects to develop products, service and delivery models which can be replicated across regions and trans-nationally.
Impact of Regionalisation/Devolution
The transfer of responsibility for enterprise from the SBS to the RDAs has been particularly problematic. Project managers report on a number of issues in their respective regions which include:
resistance by RDA staff and leadership to recognise the economic case for increased levels of female enterprise
capacity within RDAs to ensure that this agenda is given priority, is patchy or non-existent
reliance and assumed ability of the BLO network to deliver on the women’s enterprise agenda when it clearly cannot
evidence of investment in models that actually serve to exclude women
a culture of an “espoused commitment to women’s enterprise” without clearly defined investment lines to enable delivery poses a real risk of established Women’s Enterprise Centres collapsing.
Message for policy makers and commissioners
Positive action policies targeting underrepresented groups have an improving effect on the economic and social mobility of these groups. The vision of ‘enterprise for all’ can be achieved but will require targeted measures to ensure that everyone, irrespective of socio economic background or life experience. The role played by the third sector cannot be underestimated and is evidenced not only by the number of women accessing their services but also by the diversity within this client group. Women previously considered ‘hard to reach’ are setting up businesses, in part as a result of being able to access the type of support which is often only offered by third sector organisations who are able to provide a more targeted and client centered service. Third sector organisations are currently providing services where market failure exists.
A greater degree of inter departmental working is required as ‘enterprise’ should not be the province of the DTI and Treasury alone. A cross-departmental working group was established to inform the Strategic Framework: a similar group should now be formed to feed into the Women’s Enterprise Task Force and the Comprehensive Spending Review.
Underpinning current issues of sustainability is ‘stop start’ project funding which impacts on the ability of organisations to develop and maintain capacity within the sector. In the short term investment in current best practice, particularly existing women’s business centres, is required, and in the medium term use of the Comprehensive Spending Review to reallocate resources from currently funded provision which is not working to that which is.
Whilst the dearth of women owned businesses across the entire country is acknowledged, it is unsatisfactory that there remains a corresponding lack of the type of women-friendly business support provision across the regions to enable any significant increase. At the culmination of the PDF, funding to resource the ongoing delivery of PDF projects’ women’s enterprise services remains woefully inadequate.
‘invest in success’
APPENDIX 3 Train 2000 Cost Benefit Analysis Business Start-up
The purpose of this briefing paper is to consider the economic benefit of the creation of women’s business to the economy, compared with the cost of providing targeted business start up support for women.
These calculations are based upon Train 2000’s experience of supporting women to start up in business since 1996 and previous service delivery performance data specifically through the Phoenix Development Funded Programmes 2001-2006 and is predicated upon providing an integrated package of business support.
Train 2000 project the creation of 200 female owned businesses based upon previous delivery results. It also highlights the potential economic impact of creating 3000 businesses. The 3000 business creation market opportunity has been calculated using the Labour Market Survey data on the numbers of economically inactive women on Merseyside who want to work, which currently stands at 35,000 women and the numbers of women who are currently in some type of employment but have the potential to start an enterprise. The following client profile has been used:
45% economically inactive
27% lone parents
21% BME women
The economic impact of these businesses starting is projected through:
the savings to the public purse of women coming off benefits
the contribution to GVA
the contribution to NVA
2.1 Economic inactivity costs to the government
The following calculations are based upon 2005 benefit rates:
Annual income of woman living alone, in average RSL property, in receipt of JSA and associated benefits £6,683.56
Annual income of single parent with two children, in average RSL property, in receipt of JSA and associated benefits £9, 867.52
Annual income of single disabled woman, in average RSL property, in receipt of incapacity benefit and associated benefits £7,736.56
Fig.1 Profile of economically inactive women Profile of women starting up businesses At 200
businesses At 3000
businesses Single women 61 904 Female lone parents 24 365 Disabled women 5 81 Total economically inactive 90 1350
Fig.2 Estimated savings to the Treasury At 200
businesses At 3000
businesses Single women £403,019 £6,045,280 Female lone parents £239,781 £3,596,711 Disabled women £41,777 £626,661 Estimated net saving year one
£684,577 £10,268,652 Estimated net saving year two at 76% sustainability £520,278 £7,804,176 Estimated net saving year three at 76% sustainability £520,278 £7,804,176 Total net saving over three years £1,725,134 £25,877,004
Gross Value Added
The GVA is calculated assuming the new businesses have an average annual turnover of £50,000.
Fig.3 Gross value added over three years At 200
businesses At 3000
businesses Estimated Gross Value Added in year one £10,000,000
£150,000,000 Estimated Gross Value Added in year two at 76% sustainability £7,600,000
£114,000,000 Estimated Gross Value Added in year three at 76% sustainability £7,600,000 £114,000,000 Total GVA over three years £25,200,000 £378,000,000
Net Value Added
The Net Value Added has been calculated as advised by Government Office for the North West.
Fig. 4 Net value added over three years At 200
businesses At 3000
businesses Turnover growth £10,000,000 £150,000,000 Cost of sales estimated at 50% of GVA £ 5,000,000 £75,000,000 Adjustment for dead weight x 0.3 £3,500,000 £52,500,000 Adjustment for displacement x 0.3 £2,450,000 £36,750,000 Adjustment for multipliers x 1.15 £3,675,000 £55,125,000 Estimated Net Value Added in year one £3,675,000 £55,125,000 Estimated Net Value Added in year two at 76% sustainability £2,793,000 £41,895,000 Estimated Net Value Added in year three at 76% sustainability £2,793,000 £41,895,000 Total NVA over three years £9,261,000 £138,915,000
2.4 Jobs created
Assuming that every business creates 1.5 jobs then 200 businesses will create 300 jobs and 3,000 businesses 4,500 jobs.
2.5 Cost of delivery
The cost of the integrated programme of support offered by Train 2000 is, in total, £4,000 per business start. This equates to £800,000 to create 200 businesses or £12,000,000 to create 3,000 businesses.
There is a real cost benefit to the public purse in investing in the women’s enterprise agenda in terms of:
A decrease in dependency upon state benefits
Contribution to the economy in terms of GVA
Increase in tax revenue
Multiplier effect on the economy
The enabling effect of women’s enterprise.
The integrated package offers good value for money and particularly when considering the target group.
The real opportunity lies in the ability to deliver the model on a large enough scale to impact upon economic inactivity (i.e. 152,000 economically inactive women of whom 35,000 women are economically inactive but want to work) and benefit dependency (and in particular incapacity benefit) in Merseyside.