time to ditch the fetish of becoming a 'financially sustainable' business

In a social/networking session with fellow freelancers I was part of recently, a recurring theme amongst my fellow self employed, who are in their first few years of trading, kept coming up - namely a desire to become 'sustainable' (aka creating a pipeline of assured regular work).

Let's quickly clarify something about this - this isn't unique to freelancers.

While most businesses make it through their first year, most won't make it past 3. https://www.statista.com/statistics/285305/new-enterprise-survival-rate-in-the-uk/ 

This 3-year threshold is possibly why, if your business makes it past 3 years, it's officially recognised as being financially sustainable: 

https://www.freshbooks.com/hub/startup/how-long-does-it-take-business-to-be-successful#:~:text=list%20really%20expanding.-,Year%20Three,three%20years%20in%20the%20distance.  

However, within 2 years of reaching this magic milestone, 20% of these 'sustainable' businesses will then have had to close their doors for good... Just because you've made it to 3, doesn't automatically mean you're set for life.

So - if all businesses equally struggle to keep going (regardless of it they're large or micro), why do we keep chasing the dream of reaching a promised land of 'being financially sustainable'? The data referenced above shows this will never happen - but that's surely to be expected when you remember that markets, people, and fashions, etc keep changing all the time around us (so what we once thought everyone would want to buy, is now an anathema... disposable plastic cutlery, anyone?).

Surely it would be better to ditch the expectation of reaching a goal that's always going to be unachievable, and instead reframe our language and ambitions to something more realistic and honest: maybe something to do with cash reserves, and how long we can run for if we suddenly run out of paying customers (which would reduce the threat of facing imminent eviction from our homes, and therefore go a long way to helping our peace of mind and achieving a healthier state of mental well-being...).

How people's forgetfulness is costing me a family home (or, maybe it's time I stopped trying to be so idealistic?)

A few years ago, I started to track how much time I'd 'lost' from people forgetting to turn up to meetings that they'd asked for with me, or from groups who'd booked me to run workshops for them, only to cancel them the day before.

My reason for this wasn't motivated by spite or indignation, but rather to try and quantify and understand the extent of the impact of such occurrences on my business; and what that meant in turn for how well I could earn money to support my family.

http://thirdsectorexpert.blogspot.com/2020/06/to-everyone-who-forgot-to-turn-up-to.html 

The first time I reported this figure was in 2020 - and it a showed a whopping £4,560 over the year; equivalent to treating my family to a meal out once a week every week of the year.

Sadly, that figure has continued to rise year on year, and since 2020 it's jumped by over 80% to the latest reported value of £8,325!

That's about £160 a week that I otherwise could have earned - nearly £700 a month: almost the average cost of renting a family home in the UK! 

Over the last 18 years since I've become self employed, I've always tried to practice the value of grace in different ways - which to date, includes not penalising people who are causing me to incur these lost earnings (which, frankly, would be very welcome in my bank account in light of current inflationary and cost of living pressures). I could have been charging them a percentage of what I would have otherwise realised from working with them in those periods of time: a common practice in the terms and conditions amongst my fellow consultants and training providers.

But in light of people and groups seeming to be becoming more dismissive of recognising the impact (hurt) that their not trying to make effort to have the courtesy of letting me know when they know that they they're not going to be able to spend the time with me that they'd agreed to, and with sufficient notice for it not to cause me further financial distress, maybe I need to start introducing some 'nudges' in my own T&C's?

And that sucks - because, as I wrote before, I'm aware of how messy and unpredictable the world can be at times, and we can't always know when we're going to be knocked sideways. But surely, if we all know how much we're all struggling, we should at least be trying to make an effort to recognise when a change in our own circumstances may affect others, by having the courtesy to give each other a quick heads-up?

Perhaps by starting to include some penalties in how I agree to work with people, that might help to start to nudge behaviours so that we can all become a little more sympathetic, understanding, and supportive of each other?

But doing so would mean I'm starting to compromise on what I try and hold as one of my core values - perhaps after 18 years it's time I accepted that I can't carry on being so idealistic?

So how do you actually start a social enterprise?

'Social enterprise' is a phrase that seems to be increasingly commonplace, and something that we're all being encouraged to start-up to if we think we have an idea for a new project or a business that might do some good in some way.

There's also a lot of 'stuff' about them out there: mapping by Social Enterprise UK; webinars on how they can best report their impact and how they're changing the world for the better by Social Value UK; offers of funding for how they can support local communities continue to recover from the impact of the pandemic; and such like...

But I'm often approached by people who want to know the answer to a much more basic question about social enterprises - how do I actually set one up?

Well, the good news if that I've been running seminars, boot camps, and webinars covering this for about the last 20 years, and hopefully will be able to distil them down into a few pithy bullet points in this blog to help you start to chart your adventure into the lands of social enterprise...

1) You'll already have a (social) idea, but is there actually the potential for a trading enterprise in it? 

Have you identified people or organisations who might be willing to pay you money (which is different to offering you philanthropic grants) for what you're going to be doing? 

2) How are you going to raise the money you need to get it started?

It's very rare than a start-up enterprise of any kind will have customers who line up in advance of it officially opening for business, to pay for the services and goods before they've even seen them. So have you thought about not only how you'll raise the cash you need for those early bills, but also where you'd be happy to seek it from?

3) Do you see yourself as a lone hero, or part of a 'Scooby gang'?

Creating any new enterprise is hard work and risky. Social enterprises even more so, because of the additional dimensions they have (balancing social mission with need to generate cash; trying to keep a set of values and ethics central in every decision made; feeling a responsibility to try and save the world...). So do you feel you can take it all on by yourself, or are you looking to recruit others to work with you in developing, leading, and managing it (and how will you ideally structure these relationships between you all)? 

And what measures can you think about putting in place to support yourself (after all, if you're supporting the birth of this exciting new social enterprise, whose looking out for you in return)?

The next steps in starting up a social enterprise flow from these, and may seem far more mundane in comparison, but are true for any enterprise thinking about starting up:

- create some budgets to help you manage costs and make sure you're going to be charging the right prices;

- pick a legal structure that will help you manifest and protect all of the above;

- register the enterprise with HMRC and whichever regulator is responsible for the legal structure you've picked, and open a bank account;

- do some marketing;

- Oh yes: and get out there to tell people you're now 'here' and so some selling!

Once these are in place, then everything else you come across out there about how social enterprises can thrive and prosper should start to make more sense.

But if you'd like to explore these steps in more detail, chat about how to tell if your idea really does have sufficient potential to be a trading enterprise, or would like to know about any other aspect of social enterprises, feel free to get in touch: I'm always happy to have an initial conversation by phone or video without charge or obligation.

laser discs, pagers, and social accounting

History is littered with examples of technologies and systems that were of higher standards and quality, but which were supplanted by inferior products and offers.

And that's the frame I want you to have in mind in this piece on 'social accounting' - a practice that dates back centuries, and in recent years, has seen substantive growth in interest in it through the adoption of Social Accounting, SROI, and such like which businesses and social enterprises have developed amongst themselves.

In large part, this has been driven by government interest in how public services can provide more 'bang for its buck' - starting in 2001 as a policy aspiration, this led to the introduction of legislation to start to mandate how the delivery of government contracts should now include going 'above and beyond' the core deliverables to generate wider benefits to communities and society at large. 

This drive by government is in turn largely responsible for the emergence of 'TOMs' - a relative newcomer to this arena of reporting social impact and value (it wasn't until 2017 that it's first framework was released). And whilst many who've been working in the impact sector for some time aren't fully convinced by it, it's quickly gaining traction as the de facto/go to model for local authorities and other public sector bodies to design and understand how social value will be being created and should be recorded and evidenced in the services they commission and contract.

And that creates a tension in how our services and activities are designed and managed - should the impacts that they can create be constrained to the narrow focus that TOMs has pre-defined (and in doing so, ignoring the wider value we create through how we work); and also only consider our impact through the lens of what it can be financially valued at? (which may make reporting simpler, but misses the point that some things are valuable but can't be reduced to a £). 

But it's not just TOMs - the housing sector created the 'HACT' framework in 2012 to identify and monetise services relating to where and how we live, and the construction industry is also piloting a new national value standard.

Such developments not only add to the confusion over how we should best approach thinking about, and understanding, the ways that our activities and services create benefit in the wider world and for the people and communities whose lives we touch. This is further complicated in that the resources associated with each of these new standards can make it hard to be able to justify adopting more than one of them.

So it seems we have a choice - do we stick with models of social accounting that many feel are of a higher rigour and relevance, and go the way of the laser discs and pagers; or do we accept that the world is shifting around us in ways we can't control, and pragmatically change our thinking and practices so we remain 'in the game' along with everyone else?

It feels like we're approaching another 'betamax vs vhs' showdown, and maybe this is one time that although we feel we're working to higher standards, we have to accept that to remain able to engage with commissioners, funders, and others, we have to shift how we think about how we report our impact to a 'lower standard', in order that we're not 'left out in the cold'... 

the impact of a pandemic on the impact we create

Some of you reading this will be aware that for the last 15 years, I've annually published an 'impact report' on my activities as a sole trader/freelancer - and each time I do, I try and pause to reflect here on some aspect of it that's particularly struck me.

Most businesses, charities, and social enterprises who are currently talking about the impact they've created through the pandemic, successive lock-downs, and the disruption to communities and people's lives over the last year, seem to be largely focussing on what they've done over this last year. Which is fine and proper, but it doesn't help us fully understand the wider, longer-term impacts of the pandemic on how we try and achieve our respective missions - only what our immediate responses to it have been.

But I've been using a consistent framework and measures in how I monitor, report, and reflect on, my impact for over a decade. That means that this year's impact report has allowed me to better explore just how far the disruption to how we work, think, and feel, has truly had on my practices - and as such, I'm better able to consider what changes I might need to introduce as we emerge into our brave new vaccinated world (and which I can politely pass on).

Spoiler alert: it seems the pandemic has had little (or as expected) effect on the metrics I use to capture the impacts I create across different themes.

But what I do find of particular note is:

tax paid: it's been already shown by others that in being self-employed, I already pay proportionately more tax on my income than my counterparts both on payrolls, and those taking their earnings as company Directors. But this year, the amount of tax I've paid has significantly increased - and tracking this back into the data shows that it's because I was fortunate to be eligible for some of the government's coronavirus business support schemes: but that support I received to help me sustain my business (and family) was always going to be subject to being taxed - so although it may have initially seemed I could have breathed a sign of relief when HMRC said I was eligible to apply for SEISS, I always knew that there'd be at least one painful sting in the tail associated with it...

grace: in my last impact report, I'd started to capture and monetise my 'grace': the amount of lost earnings I'd suffered due to people either forgetting that we had arranged to speak/meet, or cancelling training sessions with only a days' notice (with no recourse for me to claim any late cancellation fee). Perhaps the most distressing part of this year's impact report is not that this figure hasn't changed, it's that if anything, its actually increased. Which means that the respect we're showing each other in making sure we turn up (or phone in/log on) when we've agreed to, or at the very least, sending apologies in good time if we know we can't, is on the wane...

But there's lots of other things in this years report. It now runs to 11 pages, with 12 indicators, 3 charts, 3 tables, and a slew of summary case studies and testimonials - in the first year I created it, covering the year 2006-7, it only had 3 numbers and was a footnote in my corporate CV!

And you can view it in all it's glorious technicolour and images, here.

Therefore, please do take a look through it - I'd be keen to hear what strikes you about it as being of particular interest in help me better understand it myself, and to therefore continue to create as much positive impact as I can into the future.

why the lifeline of SEISS may bankrupt us next year...

At the start of the pandemic, roughly 5 million of us were self-employed.

At the start of the pandemic, government made financial support available to business owners (in the form of grants linked to business rates) and employees (in the form of the furlough scheme).

Only after what seemed an eternity of panic and doubt, did government make an equivalent scheme for us in the form of the SEISS (except about half of us aren't actually eligible to apply for it!).

At the time, may argued that this was further evidence that despite their rhetoric about entrepreneurship, the current administration don't actually understand or care about us unless we're employing lots of people (despite the fact that we pay more tax than our employed counterparts, and other types of business owners). And this led to lobbies, campaigns, and the formation of #ExcludedUK to try and challenge this discrimination.

For those of us who are eligible, the SEISS grant was a lifeline (because even if we can land paying work, we all know it can sometimes take months to get paid which means weeks of little, if any, income to keep the lights on with).

But for those of us who began breathing sighs of relief, having gone through the small print and talked with others who haven't, we may actually be worse off next year for having received it, than if we'd not been eligible for it in the first place...

Unlike the business rate grants and employee furlough schemes, the SEISS grant carries a clause that says we may have to pay it back if HMRC deem that we managed to end this current financial year in a better place than we feared we would (perhaps because in the last few weeks of it, we suddenly land a large contract or finally get paid those back-invoices we never thought would be honoured). But we don't know exactly what the threshold for that looks like, or might be, beyond terms and phrases that are as equally vague as "substantial meal" is for pub landlords.

We'll only know if this is the case after we've done our tax returns, and as the SEISS grants are taxable, we'll have already paid about 20% of them back as tax. 

So if HMRC deem that we shouldn't have received the grant after all, the SEISS amount will magically transform from a grant into a very short-term loan that carries at least 20% interest - 20% being the amount we've already paid in tax on it, and then there's additional interest on the full amount again unless we repay it straight away. It's cheaper to take a bounce-back loan, or arrange  (and you have more time to repay it).

But there's more...

Lets say that you also pay child maintenance through the Child Maintenance Agency. They calculate what you should pay annually, based on your last tax return. Which means that for next year, the SEISS grant(s) you received will be counted as part of your income/earnings (because it's taxable income), pushing you into paying a higher amount of child maintenance. But if you've had to pay the grant (plus at least 20% interest) back, then they've fixed your amount too high. You're already facing the threat of legal action from HMRC to repay money that you no longer have, and now are also being forced to pay levels of child maintenance that haven't been worked out properly that will stretch you even further than you are now.

The pandemic and lack of government support for the self-employed has already seen nearly half a million of us giving up our enterprises, with many more seriously considering doing the same by the end of this year.

My concern is that the SEISS grant that initially seemed like a lifeline to some, actually shows that the government who've designed them have a contempt for people who are self-employed based on larger business owners and salaried workers not facing any such fears, because of the grant support they've received has no such risks attached.

All we've ever asked for as the self-employed is parity with our employed counterparts (who already enjoy far greater privileges than us in terms of lower taxes, pension contributions, better pay, and such like). Initially this parity was about making sure we can all have access to some form of support, but maybe we should also be asking for this support to be equally non-discriminatory in the risks it forces us to take when/if accepting it?

UPDATE AS AT 10 MAY 2021

and so the panic of having to repay these grants begins (but still with very unclear guidance...): https://www.gov.uk/government/publications/penalties-for-not-telling-hmrc-about-self-employment-income-support-scheme-grant-overpayments-ccfs47

sources and references

https://www.statista.com/statistics/318234/united-kingdom-self-employed/ 

https://thirdsectorexpert.blogspot.com/2018/02/who-in-their-right-mind-would-be-self.html

https://www.accountancyage.com/2020/08/07/self-employment-income-support-is-it-payback-time/

https://www.excludeduk.org/excluded-uk-an-inclusive-alliance-for-the-excluded 

https://www.lse.ac.uk/News/Latest-news-from-LSE/2020/K-November/Hours-and-incomes-of-self-employed-workers-stayed-low-over-summer 

https://www.altfi.com/article/5997_uk-smes-now-wait-an-average-of-23-days-for-late-payments

https://www.bbc.co.uk/news/uk-55129828 

to everyone who forgot to turn up to their meetings with me last year - can I have my £4,500 back, please?

We all know the feeling of frustration of having arranged to meet with someone, only for them to not turn up when agreed; and after waiting the polite 5-10 minutes before calling them, only learn that they'd forgotten.

At the best of times, this can make us feel like they don't think we have any importance or value (or else they'd have remembered we were in their diary), but as a sole trader, it also represents a painful loss of cash as well - because I'm not salaried.

Unlike others in paid employment, who have a guaranteed income each month - against which they decide how to best allocate their time to justify receiving it; I have a fixed amount of time each month - against which I have to maximise my opportunities to generate an income. 
So if you're not a client of mine and I offer to share some of my time with you, then that's me saying that I think who you are and what you're trying to achieve is more important than my earning cash to help pay the rent, or keep the fridge stocked up.

But it goes beyond that - because it's not just the need to generate an income that's the sole determinate of how I use my time, but the importance of being with my girlfriend, and kids. And beyond that, having opportunity to hang out with parents, siblings, friends - and indulge in personal interests (reading, whiskey, walking, classic movies, galleries and museums, gardening,...).

So when you say 'sorry, I forgot' - that's akin to your saying to me "You've chosen to sacrifice a lot to spend this time with me, but I don't think your ability to retain a home, spend time with family, or any of the other things that enrich our lives, are worth bothering to even recognise."

But I'll never say that to you. 

I'll never say it because I try and live by a set of values that inform who I am, how I think about things, how I approach my work, and how I try and build relationships with different groups of people.

So instead, because of the value of 'grace', I'll politely and demurely brush it off and offer to reschedule with you.

These values are something that I've always tried to keep front and centre in my day to day life, and part of the way I do this is through my annual impact report, the measures in which reflect these values.

And over the last year, I've been thinking about how to capture this value of 'grace'... It seems that the easiest way might be to measure the number of times the above scenario has played out over the year.

And to subsequently help me understand the true extent of what this value of 'grace' costs me (and how it can be recognised by other people), I've monetised it in the same way I have my pro bono activity.

The first reading on this new indicator is a bit of a shock: £4,560.

The financial value of the time I've lost because people acted in a way that suggested: "You've chosen to sacrifice a lot to spend this time with me, but I don't think your ability to retain a home, spend time with family, or any of the other things that enrich our lives, are worth bothering to even recognise.", is in excess of £4,000.

Averaged out over the year, that's getting on for £100 a week - for comparison, that's akin to the cost of taking my family out for a meal together; the cost of renewing one of my professional memberships; or the cost of a basic portable hearing loop (for when I'm working with people who experience deafness).

And it's more than half of what I gave in pro bono support over the same period.

So the next time you ask or agree to meet with me, or someone else who's not salaried, please try and make the effort to check your diary or let us know if you know you're going to be running late...

becoming deaf, dumb, and blind, during the lock-down

Nearly all of us are currently subject to a national 'lock-down' during an unprecedented pandemic.

And all of us are responding in different ways to the challenges that this 'new world' we now find ourselves living and working in present.

After the initial panic, patterns seem to be starting to stabilise: we're getting used to having to que for an hour (or longer) to get into the supermarket, and then once we're inside for it to take 2-3 times as long to get around as we used to be able to do our shop in, in order to practice social distancing and limiting contact with fellow shoppers and store staff.

But for many, the revelation that they can now work from home using video conferencing and remote access, and which people seem to already be developing habits around, seems to suggest that many will struggle to want to go back to the drudgery of commuting once we're out of the other side of this (whenever that may be).

But there's something about working from home, and also the wider implications of how as enterprises and business we fumble our way forwards through this, that no-one really wants to seem to talk about:

1) what it your internet connection goes down? I've heard of several people and small businesses who have been essentially excluded from the world completely after routine line installs and upgrades fell foul of 'human error', leaving them deaf, dumb, and blind to the world...

2) and what it your tech dies? My laptop's hard drive failed at the start of this week - and it's unlikely that I'll be able to get it anywhere for repair for months, so in the face of having already had nearly all my earning work cancelled by clients already, and an uncertain wait to find out if I'll be able to access the self-employed income support scheme, I've had to pay out several hundreds of pounds unexpectedly to order to buy a new one, and hope that it can be delivered sometime in the next 2 weeks... (in the meantime, my girlfriend has very kindly offered me the use of hers, from which I'm typing this).

3) Gurus and experts all seem to be extolling the virtues of 'pivoting' our business models - but encouraging us to do so in ways that assume that it's only our current market place or customers that are being disrupted - this is nothing like any of us have lived through before, and nothing that was ever conceived of by the academics and speakers who developed these models and frameworks. So for us businesses and enterprises already facing an immediate uncertain future because of cash shortfalls, our longer term planning is also compromised by the models we're being presented with to reinvent ourselves through having been developed for different times...

4) And finally, what happens after the summer for education bodies?

Universities and Colleges quickly moved to continue to offer teaching and classes using on-line platforms, and replace exams with assignments. But within a few months, these will become the norm for many students, who must surely then begin to wonder why they need to raise the money to live on or near a campus to be able to engage with their further and higher education in the future, when they can access it equally from wherever they find themselves living now?

Like many, I can't see that we're ever going to fully return to living and working as we were at the start of 2020, but I wonder how many waves of shock, panic, and fear this pandemic will successively unleash on us before we can all feel its over - and what these will do in turn to our work, learning, and relationships as societies, communities, and economies.

Hopefully the time that the lockdown offers us to start to carefully think about these things will mean that we don't emerge from the pandemic only to fall into the next global panic... 

having your accounts audited doesn't prove they're correct - so why do we keep thinking it does?

Lets get one thing clear from the start here - there are a lot of accountants who will be upset with me for writing this.

But at the same time, there are hopefully a lot of groups and businesses who'll now start to save a lot of money and stress after reading it...

There's a commonly held belief that I want to correct with this post - namely that an awful lot of people (including commissioners, grant making bodies, government officials, and the like) all think that if you have your accounts audited it proves that they're accurate.

It doesn't.

The process of auditing is simply someone giving an opinion that the way you've approached adding up your receipts and invoices (based on what you choose to reveal to them) is sound. 

An audit does not guarantee that the accounts are fully correct, or that you're a sound business proposition - and if you don't believe me, just go back and read what it says on the certificate that you pay an auditor to give you (the below extracts are from the auditors certification to the 2019 accounts for Arrandco Business Services):

• "Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement...  Reasonable assurance...is not a guarantee that an audit...will always detect a material misstatement when it exists."

• "We do not accept or assume responsibility to any party... to any body, for our work, for this report, or the opinions we have formed"

So if the audit process doesn't guarantee it will spot mistakes in your accounts, and if there is subsequently found to be an issue that the auditor missed, then the auditor isn't responsible for that - so what do we pay for..?

And to add to this question on the validity of the audit process, let's also remind ourselves of a few recent 'audit failures' - 

Patissie Valleirie - when asked why the auditors to this high street retail chain didn't spot the £40m fraud that spanned several years, their auditors said they don't look for fraud as part of their audit process... 

Carillion - not just one, but two firms of auditors missed the signs of a greater than £1bn hole in the accounts of this national construction firm that was a one-time darling of government commissioners, as well as ongoing signs of insolvent trading...

Kids Company - the flagship charity that suddenly seemed to run out of cash in 2015, was having serious concerns raised about apparent financial reporting and management irregularities to its Trustees as far back as 2002, yet still had accounts signed off every year...

RSM Tenon - one of the leading accountancy and audit firms found that it wasn't even getting its own accounts right after they were signed off...

the Charity Commission - last year openly said that about half of the accounts filed with it aren't being properly examined or checked by the auditors who are being paid to do so, which calls into question how far we can trust the accounts of any charity in general...

So - back to my opening question: if the process of auditing accounts doesn't guarantee that they're correct, and the auditor has no responsibility if its subsequently found that they didn't do their job properly:

(1) why do we pay for our accounts to be audited?

(2) and in light of the above quick example from across different sectors, why do we still keep asking for accounts to be audited as proof of assurance that the organisation is trading legally and is not insolvent?

member only content

there seems to be an increasing trend on the internet towards content being hosted behind paywalls - the number of emails I now receive with links to research, features, and articles which are increasingly marked as 'member only content' when I try to read them, is starting to annoy me...

I fully appreciate that in an increasingly fragmented economy, people need to find novel and clever ways of being able to earn a living (or something approximating one), and so the potential to earn 'micro payments' of a few pence from people clicking to read your blog post or news feature may seem innocuous enough. But I'm concerned it may herald the dawn of a new net age of digital inequality - not from access to the technology which is the current digital divide, but from not being able to access information or learning when you do.

When the internet was created, it was intended to be as freely open and available to as many people as possible. A principle that chimes with the declaration of human rights, whose Article 26 states that everyone has the right to education [to be able to access learning], and that this should be free; and Article 27 which says that we should all be able to freely participate in the cultural life of our [on-line] community. 

If we start putting up charges to access content, then we start to limit the sharing our learning and experiences with each other - we start to segregate our communities into those who can afford to 'play with us' and those who can't. Which means that potentially increasingly large numbers of people will lose access to articles and research that could help to further understanding, constructively challenge prejudice and bias, and generally create a more consistent experience for us all on-line and in our lives.

I also appreciate the argument that we only truly value things we've paid for, but if the established norm in the marketplace of internet blogs and articles was that they were freely shared, then surely we need to be having a wider and deeper conversation about the effects that our use of 'member only content' may be creating in exacerbating inequality, stopping prejudice and bias from being able to be challenged as they could/should be, and generally increasingly p!ssing people off who are trying to contribute to the overall pool of knowledge and learning at the cost of our own time, in keeping with the original spirit of the internet, only to see others seemingly starting to exploit it for selfish gains...?

who in their right mind would be self-employed?

I've been self-employed for over 13 years now (although more by accident than deliberate design), and I increasingly hear arguments being made everywhere as to why more of us should set up our own businesses, become self-employed, or start a career as a freelancer. 

But in all the hype and excitement, I can't help but feel that people aren't being given the 'full picture' of what they might be trading off in not pursuing more traditional employment options, and as a result, rushing into something that makes their lives harder and less happy than they might potentially have otherwise been.

Don't believe me? Well, what about these various published researches that highlight the 'dark truth' about self-employment that very few (if any) of its advocates share with us:

less earnings and more poverty - 

- as a body of workers, we're increasingly likely to be earning below the minimum wage, and the trend is that this will be true for majority of us within the next 2 years: 

https://flipchartfairytales.wordpress.com/2016/03/22/self-employed-slide-further-into-poverty/

and

https://flipchartfairytales.wordpress.com/2016/10/26/why-low-paid-self-employment-is-everyones-problem/

and

http://businessadvice.co.uk/hr/employment-law/government-urged-to-protect-freelancers-with-self-employed-minimum-wage

- compared to our 'employed' counterparts, we're actually earning less now than we did 20 years ago: 

http://www.resolutionfoundation.org/media/press-releases/typical-earnings-of-the-self-employed-lower-than-20-years-ago/ 

- and compared to those same employed counterparts, we're also paying more in tax on the earnings we can make than they do on the wages they're paid:

https://flipchartfairytales.wordpress.com/2017/03/10/self-employment-whos-dodging-the-tax/ 

- changes to our benefits system by government, means that for those of us who qualify as being eligible for some type of income support, we'll now be about £2,000 a year worse off than before...

http://businessadvice.co.uk/hr/payroll/universal-credit-leaving-self-employed-over-2000-a-year-worse-off-than-employees 

- all of which means that many of us have very little (if any) cash savings to fall back on in the event of a 'rainy day':

http://smallbusiness.co.uk/business-savings-strains-self-employed-2542586/ 

more sickness and worse (physical) health - 

- we're not entitled to sick pay: if we get sick, we can't earn or claim anything in the way that our employed counterparts can:

http://businessadvice.co.uk/hr/payroll/self-employed-demand-statutory-sick-pay-ahead-of-any-other-benefit

- as a result, over 80% of us who fall ill will work through it, as we can't afford to stop earning, placing further risk to our long-term future health:

https://www.moneydonut.co.uk/news/self-employed-risk-health-working-through-illness 

more loneliness and worse (mental) health - 

- working for yourself means you're more likely to suffer from loneliness and the anxiety that's associated with this:

https://www.fastcompany.com/3059317/how-ive-learned-to-thrive-with-the-loneliness-of-freelancing

longer hours and less time with / more stress for our families:

- if the main household earner is self-employed (as was my own experience for 12 years), then not only are their relationships with their family increasingly likely to suffer, but their family will also begin to feel more stressed as well:

http://businessadvice.co.uk/insurance/health/pressures-of-self-employment-creep-into-family-life

- we also work longer hours (typically 13 hours a day), with less time off for holidays:

https://www.sectorsdonut.co.uk/news/forget-balance-self-employment-about-work-life-blur

- and women in particular struggle to be able to maintain a semblance of controlled hours if self-employed, juggling multiple family responsibilities which lead them to have extremely elongated days with little (if any) time for themselves and their own well-being:

https://www.startupdonut.co.uk/node/120747 

retirement?

- less than 1 in 5 of us is able to save into a pension (unlike our employed counterparts whose employers make regular monthly contributions into one on their behalf on top of the salary they pay them..):

https://www.ipse.co.uk/our/news-listing/self-employed-pensions-the-ticking-time-bomb.html 

So the research shows us that to strike out as an entrepreneur means you're more likely to be poor/in poverty; suffer long-term ill health; have worse relationships with your family; and never be able to retire...

and you what makes this even worse? Government is aware of all of this from the official statistics it collects and openly publishes, yet somehow doesn't seem to be able to get around to doing anything about them: 

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/trendsinselfemploymentintheuk/2018-02-07 

If I've made it sound like self-employment is a bleak landscape that only the wretched and foolish would dare to venture into, I apologise. My interest in collating and presenting these various and multiple researches is, as always in my blogs, a desire to share knowledge in helping people make more informed decisions and being able to spot/avoid hype - it's not all doom and gloom for everyone. After all, 15% of us do it. And we do it for a variety of reasons: the unavailability of other forms of employment, the need for flexibility around family/caring responsibilities, the desire to use a personal skill or passion that outweighs the apparent cost of maintaining it as a sometimes hobby, and similar.

And in light of our Government's apparent disinterest in us, we're also increasingly finding ways to support ourselves:

Facebook groups like Freelance Heroes - https://www.facebook.com/groups/freelanceheroes

Campaigns like MicroBiz Matters

- https://microbizmattersday.rocks/blog/

Pooling of financial support for each other through co-operative initiatives such as 'Bread Funds'

- http://breadfunds.uk/

The current state of self-employment and freelancing may therefore be very precarious, but we can perhaps have hope of a brighter future if we start to take more action in all of our interests by working together, and supporting each other more..?

if you want support for your startup, you'll likely need to ignore your ethics...

I find myself in an unusual conundrum as an enterprise advisor who also has a pretty explicit set of values and ethics in how I approach the way I work:

Over the last few years, government has consistently reduced the amount of resource and support available to people who want to start up different types of businesses as a route to employment, generating jobs, changing the world in new ways, and such like. This has meant that the support that so many entrepreneurs of all types need and value is increasingly scarce.

At the same time, high street banks and financial services bodies seem to be moving into this business support space through creating startup grant funds, developing (free) incubators and workspace, and sponsoring national thematic enterprise support initiatives.

All seems pretty straightforward? And economists would probably point to this as an example of how market forces are creating responses that people and enterprises need, without the need for state intervention.

But here's the rub - a recent survey of the 'ethical-ness' of high street banks seems to suggest that those who are scored as 'most unethical' are the ones doing the most around these startup and social enterprise support initiatives. A case of 'buying your way out of a guilty conscience'? (http://www.thegoodshoppingguide.com/ethical-banks-and-building-societies)

And for the entrepreneurs accessing this support - some won't care where the money's coming from, but I see that people increasingly are interested in how that money has come to be on the basis of choices about where they choose to invest their own savings, suppliers they choose to procure from, and the places they try and recruit their staff from.

Market forces are all well and good, but remember that the market isn't a person - it doesn't have ethics or values like you or I. And that likely means that entrepreneurs' difficult choices will only be added to in the future when they start to weigh up the ethics of accepting the support that they know that their enterprise needs, but comes at a cost of having been raised from investing and trading in practices that they'd otherwise be very uncomfortable with...

crowdfunding grants for your project - the shape of things to come or a dystopian future?

I find myself talking a lot about crowdfunding these days - partly because I'm starting to deliver more training and learning programmes around strategic finance and managing accounts, but also because it seems to be a space where more grant makers are moving into...

I've always held that the main benefit you can derive from crowdfunding isn't about the money, but rather proving interest and demand, and building a tribe of supporters. I've also always argued that it's a lot of hard work to make a crowdfunding campaign a success (most fail to reach their targets, or come anywhere close to them...)

Recently though I've started to notice grant making bodies starting to increasingly move in the crowdfunding space - offering 'top up' grants to groups and projects who raise either a minimum amount, or who offer to match the amounts raised in this way (step forward Power to Change Community Shares Booster, Santander's changemakers, el al). And in some ways this makes sense: grant making bodies only have so much cash to go round, and want to make sure that their money makes the most impact where they spend it. So to have a project that shows it has high levels of public and community support from people already donating to it, would seem to be a good indication that it will do very well in having a body of people already wishing to support it and see it succeed.

And there are also calls from various national sector bodies that even if charities don't integrate crowdfunding into their income generating strategies, everyone should try it at least once... 

But... crowdfunding can be a fickle game. It takes a lot of time and skill to be successful at it. It's also a form of popularity contest in trying to get a community to support your project over someone else's. And what about those projects and activities which, while we all agree are worthy and needed, are also those which we might struggle to otherwise offer support to if they started crowdfunding?

Crowdfunding can generate all sorts of benefits and unexpected outcomes. It can also be a large waste of time and effort. But is a space that people and funders are increasingly interested in - and if we haven't tried it, how can we have any credibility when we try and subsequently argue that its not for us?

Like Oscar Wilde (or someone like him) famously may have once said - try everything once, apart from Morris dancing; but I'd say just make sure you go into it with your eyes open and don't believe all of the hype...

why it's a good thing for some of my clients I don't fully follow the example of Jesus...

As someone who professes a Christian faith, I've always tried to reflect the values and dogma that comes with that in everything I approach (including my work). And over the years, I've started to explore this further in some of the posts here on my blog.

But recently it struck me that as much as many might argue we should follow the example of Jesus in all we do, I don't think I can, at least, not in everything...

I was recently asked as part of a church service to briefly speak about an aspect of my work that I struggle with, and I chose to relate some stories about when and how clients pay me. 

I shared that there's an ongoing balance I need to strike between showing grace in those instances where I know a client may come to struggle to pay me what they owe me owing to changing circumstances, and so I might choose to forgive their debt to me; but that I also need to ensure I'm encouraging people to be accountable and pay what they owe where they can (after all, I too have bills to pay, and commitments to honour).

And it got me thinking about a slogan that was popularised in parts of the Christian church a few years back - "What Would Jesus Do?", and I realised that some of my clients whom I chose to take a more formal line with with regards to payment of my invoices would probably be relieved that I don't fully follow Jesus' example where he came across traders who were being disrespectful...

maybe social investment isn't that different after all..?

I was able to make it along to this year's "Working Capital" conference that was recently staged in Sheffield - a day to immerse myself in reflecting, arguing, sharing, and further exploring the wonderful world of 'social investment'.

Depending on who you speak with, Social Investment is either the next big thing (and has been for a few years...); is a market that's suffered failure in the past and needed interventions from government; or a smoke screen for covering the cuts to grants that sustain many charities and social enterprises...

money might not grow on trees, but these desktop garden
pots from Key Fund mean you can grow most other things 

The day offered a range of perspectives and stories: Cliff Prior of Big Society Capital stating openly what many are starting to whisper in hushed tones - social enterprise should be moving more towards retail and consumer markets because public commissioners are very tough nuts to either crack, or to change their behaviours; and Hazel Blears encouraging those same commissioners to do more to learn from each other to progress the social value act (but in doing seemingly having forgotten previous national initiatives over the last 20 odd years that were designed to do just that...).

But the impressions I'm left with (initially at least - as always, I'm open to others coming back to me to challenge me on these points) are:

• most of the specialist lenders to social enterprise make it difficult for the sector to borrow from them because they usually have repayment terms of only 5 years maximum. But in the private sector its not uncommon to 'refinance' a loan - it can often be hard to get a loan because you've no history of repaying debts; but once you start to, you can flip your loan to another lender on better terms... So what's to stop social enterprises getting what seem initially expensive loans in comparison with the high street banks who see them as being too risky, showing they can manage repayments, and then transfer the loan to their high street bank on better terms?

• the things that are important to those seeking investment (quick decision, affordable terms, flexibility), are the same as for any other type of organisation in any sector seeking a loan

• as a general movement, social investment seems to be a little bit too 'introspective' for my liking: NESTA undertake regular national surveys of social and alternative finance, which no-one referenced today. Without understanding how different 'flavours' of social finance compare to other finance types in how widely they're being used, how can we hope to make a best informed decision about where we should be investing our time in pursuing investment?

But but in all, a good day to reflect, see some friendly and familiar faces, and hopefully the start of most other enterprises' journeys into investment that will ultimately help them create bigger and better impacts on, and for, their respective communities.