How to … Help tenants start businesses

At London & Quadrant housing association we embarked on a six-month pilot study with One London, a business development charity, in order to help local residents set up their own businesses. The idea, which also involved Family Housing Association, was initially conceived to overcome the catch-22 situation that results in banks and building societies promising to reward new business ideas, but not those that lack the necessary cash or assets.

We contacted One London because we had worked with them in the past. We were aware that they too were keen to develop their business with housing associations and they had a good track record – so there was a common agenda.

For the purposes of the pilot the project was focused on the residents’ and tenants’ groups based in the south London boroughs of Lambeth and Southwark.

Over the coming months we needed to see what resources would have to be in place for this type of scheme to work and there was a need to raise social housing residents’ awareness of enterprise opportunities, small business start-ups and the idea of business growth.

First, we wrote to residents in early February and March requesting feedback on business ideas. To our surprise, the response far exceeded expectation – we found that many residents were keen to start up their own businesses.

Most of their ideas were based on current or past work experiences.

Overall we got 141 responses, with 64% from women and 86% from ethnic minorities. In total, 120 people applied for start-up money for their ideas in the first month.

The key issues that residents felt were important included the need for one-to-one ongoing business advice. Advice on finding business premises was also a major issue for potential entrepreneurs and many residents were not aware of local services and wanted a more prominent service in Lambeth that focused on enterprise and business support.

Throughout the process we always made sure we had a point of contact for residents who had queries. For help and advice they had access to the advisory services at One London’s business advice service in Lambeth.

Those people who had decided to embark on their own businesses and had put together business plans were then assigned a business adviser who helped them deal with issues like raising finance, marketing and finding the right premises. However the majority of clients needed to discuss their ideas with a project manager to help them form a plan.

As a result of the scheme, residents were able to take advantage of a number of support facilities including: accessing business and enterprise training, developing business plans, accessing One London funding streams for small business start-ups, signing up to business mentor schemes and receiving “business checks” from professional advisers.

The businesses that came about as a result of the project include a consultancy practice that specialises in alternative therapy treatment, which was set up by a tenant who is a qualified homeopath.

Another tenant who is an IT trainer and website designer decided to set up his own web design company. He attended an “Introduction to Enterprise” course and worked with a business adviser to complete his business plan. His business is now in full flow and he has secured several local contracts.

The project is now being evaluated and the commitment to those residents who successfully set up their businesses is still being fulfilled.

What we want to do now is to try to extend the scheme across London and we are in discussion with several banks about developing a financial initiative that will enable us to set up a service to lend money to residents.