You are on page 1of 12

Crisis Ethical Enterprise and Employment (3xE) Network

Growing homeless entrepreneurs
From practice to theory and back again

2

Growing homeless entrepreneurs - From practice to theory and back again

Contents

Definitions ....................................................................................................... 4 Different models .............................................................................................. 5 Benefits of incubators ..................................................................................... 5 Key development issues ................................................................................ 6 Common problems ........................................................................................ 6 Relevance of incubators for homeless entrepreneurs ....................................... 7 Case studies .................................................................................................. 8 Further resources ........................................................................................ 11

3

3xE Network: helping the homeless sector establish social enterprises to help homeless people access work and skills
The Ethical Enterprise and Employment (3xE) Network is run by Crisis to bring together organisations using social enterprise and supported employment models, and organisations working with unemployed people who are homeless. 3xE works in partnership with social enterprise infrastructure organisations throughout England to improve take up of their services by homelessness sector organisations. 3xE also funds a variety of support services specially tailored to the needs of homelessness sector organisations to enable them to start or further develop social enterprises or supported employment schemes. The 3xE Network is funded by the Big Lottery Basis programme. Infosheet This is the first in a series of infosheets that 3xE is producing to capture and disseminate learning from the Network. ‘Growing homeless entrepreneurs’ is based on the learning and experience gained from a series of visits to best practice incubators and a seminar held by 3xE. The overview has been produced by Adrian Ashton, an expert on business incubators. Many homelessness sector organisations have grappled with clients’ difficulties in getting back to work: setting up their own business is a flexible option, but will they have the skills, confidence and staying power needed? A business incubator with support can provide just that.

4

Growing homeless entrepreneurs - From practice to theory and back again

Growing homeless entrepreneurs From practice to theory and back again
This overview of business incubators is based on a presentation by Adrian Ashton (www.adrianashton.co.uk) at the EcoHub in Southend-on-Sea in July 2010 for 3xE.

Definitions
Incubators for enterprises are defined by UKBI, the national trade association for business incubators as:

“providing SMEs and start-ups with the ideal location to develop and grow their businesses, offering everything from virtual support, rent-a-desk through to state of the art laboratories and everything in between. They provide direct access to hands-on intensive business support, access to finance and expertise and to other entrepreneurs and suppliers to really help businesses and entrepreneurs to grow – faster.”
They can therefore be seen to take many forms, but ultimately an incubator offers a physical space and facilities from which an enterprise may begin to trade, and non-physical support services to increase the success of the start-up enterprise: advice, training and signposting. Through these non-physical services, incubators often also support a number of additional enterprises which are not physically housed within them.

5

Different models
In the main, incubators are modeled in one of four ways: 1. ‘Hub and spoke’ - a central building exists which offers all the core services available to tenants and other enterprises using their non-physical services, and is linked to a number of ‘satellite’ buildings. These satellites will usually be unserviced, offer smaller rooms, but share an IT network with the ‘hub’ through internet, phone and possibly video connections. They are most common in remote, rural areas where it is impractical to offer a fully-serviced facility in all conurbations due to insufficient demand in each locality. 2. ‘Hybrid’ - incubators tend to be focused on supporting a particular type of thematic enterprise, for example young people or digital technologies. A hybrid model deliberately sets out to ensure a mixture of tenants and users of its services to encourage the wider business community to benefit from its services, rather than focusing support on stimulating a single type of business within it. 3. Integrated housing - while incubators have traditionally focused on housing new enterprises only, newer models are being created that offer housing for workers as well (although Emmaus communities have been offering work and accommodation for many years). In recognising

that the distinction between work and home is becoming blurred for many lifestyle entrepreneurs, this model seeks to support entrepreneurs in a ‘whole person’ way through also supporting their personal need for accommodation 4. ‘Piggy back’ - given the costs associated with the development of incubator facilities, some are developed within larger facilities. Such instances include universities who, through refurbishment of buildings, have begun to offer incubation to their graduate entrepreneurs.

Benefits of incubators
Incubator facilities offer benefits to two main groups – the individual entrepreneurs, and the wider local economy: For the individual entrepreneur, they gain access to a supportive peer group of like minded people, and become part of a community that offers them access to various types of support. And research shows that through this supportive environment, their businesses are three times more likely to succeed than they might have otherwise. For the wider local economy, incubators have been found to directly support an average of 30 enterprises, with a further 150 being supported through their associated services, and that through the support to these businesses 167 full-time jobs are created and sustained.
Above left: Social Enterprise Coalition, image: Steve Forrest Above right: Farming For All

6

Growing homeless entrepreneurs - From practice to theory and back again

Key development issues
In developing incubator facilities, a number of approaches can be taken depending on the type of model being adopted. Regardless of model though, there are two key issues to consider: 1) Ensuring that there will be a sustained interest and demand for facilities and services being offered into the future – this means understanding not just the current needs of local businesses, but their future needs and those of aspiring entrepreneurs who are yet to develop and launch their enterprises; 2) That there is sufficient interest and support able to be offered by other agencies and providers to the future tenants and users around business support services.

Common problems
There are a number of challenges and problems that incubators experience and it is useful to know what these are before developing a new facility to ensure that they can be accounted for from the outset: • Financing - not just raising the finance required for the initial start-up costs of the facility, but also supporting its cash-flow during periods where tenancy rates (and therefore rental incomes) may be low, to allow for discounts to be offered to incoming enterprises, to support salary and maintenance costs and so on; • ‘Move on’ - the premise of any incubator is that it supports an enterprise to form, grow, but that the enterprise then ultimately ‘moves on’ having been nurtured and able to support itself, so that others may benefit from the facility. However, due to the supportive culture and environment of incubators, many tenants are reluctant to move out; • Common areas - incubators have a number of shared facilities including kitchen space and it is usually around how different tenants use (and leave) these facilities that causes the most problems; and, • Access and infrastructure - it should be borne in mind that not all entrepreneurs will be able, or want to, drive. There should therefore be adequate access to public transport links as well as parking facilities for those that do wish to.

7

Relevance of incubators for homeless entrepreneurs
Given the above, incubator facilities can be seen to potentially offer a number of significant benefits to homeless entrepreneurs: • A dedicated space to focus the mind - hostels and other temporary accommodation are usually full of distractions and offer limited storage facilities that may be needed by a start-up enterprise. • Flexible terms and support all in one place homeless support agencies are usually fragmented by location and difficult to access outside of pre-arranged times: having business support services available on-site through the incubator encourages entrepreneurs by their having access to help ‘on tap’.

• Supportive peer network - from like minded entrepreneurs who all wish to see each other succeed and not be satisfied with simply maintaining the ‘status quo’ of their life and situation. • Challenge perceptions about homeless entrepreneurs through having a mix of tenants - there is often a great stigma attached to being homeless and offering a public space that allows homeless entrepreneurs to showcase themselves to the wider business community (fellow tenants and other users of services) will go a long way to challenge others’ perceptions about the abilities of people who are homeless.

Opposite left: Manchester Ceramics; opposite right: Open Cinema Above left: Create Leeds, image: Mark Skeet; above right: Emmaus

8

Growing homeless entrepreneurs - From practice to theory and back again

Case Studies
St Mungos St Mungo’s offers a range of services to homeless people, including advice on setting up and running a business. However, the organisation recognised that once back in the hostel or at home there was little support to help people build their business. They were missing opportunities to network with other businesses and were restricted by a lack of storage space or room to be creative. One solution was to develop a space which people could work out of to build an enterprise. St Mungo’s had un-used space in its basement, which with the help of volunteers was transformed into a suitable workspace. The first residents were Squeaky Chains, a social enterprise set up in October 2009 to repair old bikes to sell. The space is provided free of charge, and in return Squeaky Chains provide one day of training to clients each week. St Mungo’s provides business support when requested, but the project leader is given independence to pursue his ideas and establish rules for his volunteers and trainees. For St Mungo’s this is an important part of what the business incubator offers: to demonstrate trust in individuals and encourage independence. Other groups have since set up within the space, on a full or part-time basis dependent on their needs. The centre aims to provide an opportunity for anybody tackling homelessness and to

encourage a mix of individuals, projects and skills so that people can learn from each other. There are undeniably challenges. The cost of renting in London is high and the more successful the centre is the more space will be needed. The centre is only open on weekdays, which limits access to workshops and storage. However, the space offers a secure, supportive and productive working environment. In its first year of operation Squeaky Chains trained in bike maintenance ten people affected by homelessness, many of who had no interest in bikes before. Two have gone into related employment, three have achieved City and Guild qualifications and others continue to volunteer in the workshop training new recruits. The aim is to continue to build the centre to offer space to more businesses and social enterprises.

Contact details Colin Vint, Business Start-Up Coach. Tel 020 7902 7951 Email colin.vint@mungos.org

9

Pop-up Business Incubator: Aspirations In 2004, Aspire Support UK was launched to support the network of social enterprises working under the Aspire name. It became a registered charity in 2006 and is now exploring and developing new opportunities for spreading and embedding the core Aspire model of transforming lives through enterprise and employment. Aspire Support UK became Aspire Foundation in 2008. The charity hopes to help homeless and disadvantaged people start their own successful businesses. Working with a network of the capital’s homeless charities, Aspire Foundation runs a series of courses in business development around London. Successful entrepreneurs with real life experience of starting and running a business present six day-workshops on: researching your market, raising money to start your business, where to run your business from, starting up legally (red tape), who to ask for help, information, finance and support, business planning, sales and marketing alongside managing the risks.

The pilot programme has attracted over 20 people, 17 of whom have graduated the course, keen to carry on with their business idea. They will continue to receive mentoring from Aspire’s Business Development Manager. The Pop-up Business Incubator will be repeated as and where needed.

Contact details Paul Funnell Business Development Manager Tel: 0207 921 4448 Email: paul@aspire-foundation.com

Opposite: Squeaky Chains workshop at St Mungo’s Above: Aspire Foundation

10

Growing homeless entrepreneurs - From practice to theory and back again

Wandsworth Youth Enterprise Since 1988 Wandsworth Youth Enterprise Centre (WYEC), based in Tooting, London, has been supporting young people aged 17-30 to develop business ideas and start up their own businesses. Their mission is ‘to increase economic activity and promote entrepreneurial behaviour among young people within disadvantaged communities’. WYEC’s is a four step model which begins with the Business Launchpad, an outreach project that uses a range of methods to engage young people onto their business training and counselling programme. The next stage is for those who are interested in setting up a business to attend an interactive, introductory workshop. At step three those who have decided to stay on to explore setting up a business, become clients and receive one-to-one assessment.

WYEC then offers a programme for young entrepreneurs to support them in the first two years of running and establishing a new business, including a business counselling service, skills workshops, training courses and managed workspaces. The centre has developed a £2.7 million business centre in Tooting to provide income for the charity’s work and to provide move-on space for young people moving from WYEC’s incubator space. Since being established WYEC has supported over 5,000 young people and seen more than 500 businesses started. The centre has a high survival rate of young businesses with 85-90 per cent trading after two years.

Contact details Wandsworth Youth Enterprise Centre Trident Business Centre 89 Bickersteth Road London, SW17 9SH Toyin Dania, Business Counselling and Training Manager Tel: 020 8516 7700 Email: toyin@wyec.org.uk Website: www.wyec.org.uk

11

Further resources
• Find details of how to apply for FREE 3xE Membership and FREE 3xE services • Find 3xE Members’ Directory • Read case studies of homeless social enterprises and learn the lessons of their experience • Find policy documents about social enterprise • Find business planning guidance and tools • Add your product or service to the supplychain pages • Find links to other helpful sites Other • CAN Guide: How to Mezzanine • Cluster Policy: Issues for Social Enterprise, Bob Allan • Benchmarking Framework for Business Incubation, 2003, UKBI • Feasibility study for a regional flagship incubator in Cambridge for Co-operative and Social Enterprises, 2003, Adrian Ashton • Research report on establishing a dedicated Community Enterprise incubator in Cambridgeshire, 2003, Adrian Ashton • Mosques on stilts, rhubarb plantations, and time share printing presses – Future opportunities and needs for workspace in Burnley, 2007, Adrian Ashton • Workhubs – smart work spaces for a low carbon economy, 2010, Workhubs Network

www.crisis.org.uk/3xE

Online • UKBI - www.ukbi.co.uk • Development Trusts Association www.dta.org.uk • Asset Transfer Unit - www.atu.org.uk • Workhubs Network - www.workhubs.com Find help in your region from regional social enterprise infrastructure bodies: North East www.nesep.co.uk South East www.se2partnership.co.uk West Midlands www.socialenterprisewm.org.uk East of England www.seee.co.uk East Midlands www.seem.uk.net South West www.rise-sw.co.uk Yorkshire & Humberside www.seyh.org.uk North West www.sen.org.uk/about-sen/senw London www.sel.org.uk

• • • • • • • • •

For further copies of this document, contact: 3xE Network Crisis 66 Commercial Street London, E1 6LT Tel 020 7426 8500 Email 3xE@crisis.org.uk www.crisis.org.uk/3xe
Registered Charity Numbers: E&W1082947, SC040094.