social enterprise legal structures for humans

Some people regard me as an expert authority on legal and governance forms for social enterprise, community businesses, and co-operatives - and while I always encourage people not to trust any guidance I offer them on this topic (because I'm not academically accredited in legal stuff, and more importantly because I'm not the one who's going to be legally responsible for administering the chosen form), people take encouragement from my achievements in changing company law, navigating Society Rules with the FCA, and finding paths through charity legislation.

Over the decades that I've been supporting people understand these choices, I've created a few tools/prompts to help focus discussions and reflections ('CHAMP' and 'Adrian's 4-boxes') - but this post isn't about those tools - instead it's about a 3-part limited youtube series I was invited to be part of the 'main cast' for.

A contact through one of my networks had approached me to ask if I could help them explore and understand what the best legal form for a new social enterprise they were developing might be. And as we talked about how I might offer guidance and assistance, we hit on the idea of making this a 'performance piece' - drawing back the curtain on how people usually go through this process as an encouragement to the wider sector, and also a working out of some of their (and the emerging enterprises') values.

So we scheduled 3 afternoons to talk though approaches to not only understanding why this legal form question is so important to get right, but the different ways we can pick and choose between them, and finally, applying all of this learning in real time/live to their nascent social enterprise.

There's an 'official' long post on LinkedIn by Matthew Bellringer (the contact that sparked this) where you can get the official story of how this series came to be: https://www.linkedin.com/pulse/foundations-thriving-social-enterprise-matthew-bellringer/ but I wanted to take the opportunity to reflect on how I found this process, in it being different to the ways in which I usually offer this type of support - to pull out what surprised me that I hadn't considered before, what was an encouragement in allowing more time and space to explore than is usually available, and some of the things which you don't normally hear or read about in this area.

So - the below points are what I think are useful framing/warm-up for anyone thinking of approaching either choosing or reviewing a legal or structural form for their social enterprise - if you want to know more about them, you'll have to follow the links to youtube and watch all 3 episodes...

- Comparing legal structures to buying second-hand car: you wouldn't buy a car without wanting to know some of its history to assure you that it's been built well, and looked after, so why don't we seek the same assurances when deciding between legal forms?

- The risks of using data that maps legal forms used by social enterprise in helping us choose one for our own: as part of the episodes, we looked at research into how far different legal forms are popular/less popular by the wider social enterprise sector. But as you'll see as you watch this segment, this mapping - as undertaken by national sector bodies, often presents a contradictory picture of findings. As with all research, what you find depends on how you ask the question, and whom you ask it of. And it seems that our sector leaders can sometimes do this in ways that might not seem to be that robust..?  

- None of the existing tools designed to help you plan your social enterprise model (social enterprise canvases, specialist business plan templates, etc) help you relate your ethos and values to the legal form you'll pick. Which seems a bit bonkers, because your chosen legal form is probably one of the best ways you have to make sure said ethos and values can be best protected into the future. That's why I developed my 'CHAMP' framework, which is profiled in detail through these episodes.

- Your legal structure as a social enterprise can influence your credibility to lobby and speak out on social issues. For example, charities and CICs are banned from undertaking political activities: but if we're serious about creating systemic change as a social enterprise, then at some point we have to engage with the policy and law makers (which perversely, our chosen form may actually prevent us from being able to do!).

- The problem with all of the toolkits designed to help making the process of picking a legal form easier is that they assume you understand the jargon, and underlying concepts associated with legal forms and governance. Which most of us don't, which explains why these toolkits are so underutilised by the wider sector.

- There's a confusion about Members, members, and membership, that knots so may people up when approaching social enterprise legal forms: one has legal power over you, one is a supportive friend, and the other is about collective activism that influences your decision making. Can you tell which is which?

- Stickers and badges, or legal power – which would people prefer to have in your social enterprise? And which would you want people to have? (remember that there are wider trends going on in society that means formal membership bodies are generally seeing their numbers start to plateau and decline - people may be more interested in being part of you for specific periods, rather than for life).

- We managed to compress over 400 years of legal structures for social enterprise into just over 10 minutes. A new personal best for me!

- How the regulator for your chosen social enterprise legal form can strengthen others' trust in your venture. None of the toolkits or other materials 'out there' that I come across to help you decide about legal forms ever talk about the regulators: what they can do to you, how they can support and protect you, and how they may influence how others see you. But this is also a far wider issue and problem: I also see it a lot of start-up programmes, where social entrepreneurs are supported and encouraged to start-up and incorporate their ventures, but then given no support in knowing how to 'look after it' with their respective regulator - leading many early stage social enterprises to suffer fines, penalties, and even enforced winding up because no-one explained to them about the regulators... 

- It turns out that knowing how to bake cakes can be very helpful in informing how we approach designing different membership models in social enterprise legal forms.

- Campfire songs can be equally important in the selection of choosing a legal form for a social enterprise.

- and finally - why every social enterprise should be wary of S&M clubs if they’re going to be a CIC.

I've found myself enjoying this process of working with a group to find an answer to a question, and also that it's encouraged us to take more time in how we consider the options and implications - despite doing the whole thing remotely to each other with video calls, etc, it's felt like it's helped to make choosing a legal form a process that's allowed us to be more human. 

Episode 1: what's a social enterprise, and why do I care?  

https://youtu.be/5T7TzanQh0s 

Episode 2: what do social enterprise legal structures mean to me? 

https://youtu.be/EaRRsWPfDK0

Episode 3: social enterprise in the real world. 

https://youtu.be/JmEi3b6f9_g 

sharing squeaky bum moments, swearing, and bread - my contributions to European Freelancers Week 2021

Each year, there are initiatives and campaigns to help highlight the contribution that freelancers (like me) make to our economy and society, and also the realities and challenges we face in being overlooked in government business policy (including being taxed at higher rates than other types of employees).

One such initiative is European Freelancers Week, which each year stages a week (and 2 weekends) of events, gatherings, and conversations across Europe.

This year, part of its programme was an on-line conversation hosted by Freelance Heroes, and I found that my calendar wasn't demanding that I be delivering a workshop or meeting with a client at the time, so took the opportunity to 'click in'.

Now, my intention of doing this was to listen in to others' experiences, insights, and ideas, as part of the wider CPD framework I've designed for myself over the last 16 years - helping me better reflect on my own thoughts and practices.

But as the conversation progressed, one of the key participants had to offer apologies and leave early, and the host of the call spotted I was watching along and press-ganged me into joining the panel - with no intention to have been an active part of any of the EFweek2021 events this year, I hadn't given any thought to what I might contribute or argue...

(I start to appear at around the 34:30 mark - https://youtu.be/vo_-ACnhzyE?t=2070) 

Watching the call back, I realise that my unscripted and spontaneous offerings (which saw me talking about squeaky bum moments, swearing live, and the importance of bread), may not have been what people might have expected to be hearing about - but in the spirit of EFweek2021 being about allowing us to all share our voices with each other in mutual encouragement and support, it's hopefully added something to the mix that enriched the overall experience?

Is the growth in CICs actually damaging the wider social enterprise movement?

Some people may be aware that I've always questioned and challenged the Community Interest Company (CIC) legal form (see previous blog posts here) - largely because I've found that most social enterprises who've incorporated with this form have subsequently learnt that it wasn't actually the 'best fit' for them and their business model, and because what they're usually presented/'sold' as it being, doesn't actually stand up to scrutiny when looked at by evidence and research...

However, there are several social enterprises out there that I've supported to gain this status - I've always seen my role as an adviser to help people make better informed choices, not to tell they what decisions they should be making.

And it's in that vein, that I come to be typing this latest blog - prompted in part by a recent article by Pioneers Post on the 'explosion' of CICs during the pandemic: https://www.pioneerspost.com/news-views/20210825/record-number-of-community-interest-companies-amid-rise-of-grant-funds and CIC regulator wind up extent and causes

My concern about this sudden 'blossoming' of CICs is that rather than being a good thing in showing the growth of social enterprise in general, it may actually be more damaging to the sector in the long run...

Let me walk through through my thinking here, so as to try and help clarify and explain this rather bold assertion - and as always in my blog posts, you can leave comments to refute or challenge any of these:

1) Social Enterprises should be trading businesses, but most CICs aren't

In the absence of an overarching legal definition of what absolutely defines a social enterprise, the sector bodies have reached a consensus on what their defining characteristics should be (interestingly, none of which specify particular legal forms). Front and centre in these is that a social enterprise should be (or be clearly moving towards) generating most of its income from trading activities - but there is no requirement for CICs to need to trade, in order to generate their income or achieve their social mission! 

• when you apply to be a CIC, the application asks "if" you make a profit, not "when" - so the CIC Regulators' assumption is that most CICs' default business model will be that they expect to them lose money each year and/or will be reliant on grant funding to achieve their social purpose (you can't make a profit/surplus from grants);
• according to the CIC Regulator in their own published annual reports, most of the CICs they register will be wound up within 18 months - usually because they were unable to access the grant funding that they thought this legal form would enable then to be awarded.

2) Why are social entrepreneurs being encouraged to set up social enterprises in ways that mean they don't need to trade? 

As this legal form seems to be oft promoted to start-up social enterprises and social entrepreneurs as being the 'best form' for them, but it doesn't actually require them to act in ways that facilitate them to better meet the qualifying criteria of being what they say they want to be - how do we reconcile this apparent contradiction?

3) Are the public now seeing CICs as another form of charity, creating confusion about what social enterprise really 'is'?

If the most feted legal form for social enterprises to adopt therefore doesn't encourage the 'social enterprises' using it to act as social enterprises (with some evidences finding that CICs are actually more reliant on grants than charities are!) - it's going to cause confusion amongst others (who are already confused about what social enterprise is from the lack of a legal definition). If CICs are seen as not trading to achieve their social purpose - how will this not confuse people as to the need for social enterprises to trade: are social enterprises therefore just another type of charity, rather than a revolutionary/innovative/transformative way of doing business?. And this confusion will surely mean its harder to create more consistent messages about what social enterprise is and can do, in order for the sector to realise its full transformative potential.

However, as will all things, there are exceptions to the above - there are social enterprises out there who've never taken a penny in grant funding; who have found clever ways to harness what many feel to be 'too risky' elements of the CIC form with regards to the powers of the CIC Regulator over them; and who are trailblazing for the wider sector as a result.

My interest here isn't to decry this specific legal form wholesale, but rather to try and contribute to a wider ongoing discussion that means as a sector we can be more coherent, and ultimately make it easier to achieve the things we aspire to.

Co-ops will never succeed until they start demanding more money from people who want to join them

The co-operative movement is often referred to as having emerged from Rochdale in 1844 (although it's history goes far further back than that) - a time when the average life expectancy was a mere 21 years; and most people died in the streets wearing nothing but rags.

The co-operative society that was formed then did two very powerful things that have since resonated through history: one has defined the movement globally (documenting a set of core values and principles); and the other has come to limit the interest of people in not only becoming members of co-operatives, but subsequently also not being interested in being actively involved in their governance (the setting of a membership fee of £1).

Whilst those values have gone on to be argued about, expanded, refined, and ultimately codified by the International Co-operative Alliance as the acid test of what makes a co-op a co-op, that membership fee has largely remained resolutely steadfast at £1 in nearly all co-ops.

Today, most people in the movement would argue that it should remain £1 - this is the lowest amount the law will recognise and allow, and allows for inclusivity: after all, no matter what your circumstances, you can scrape £1 together relatively quickly and easily.

But adjust for inflation, and that £1 should actually now be £128.

However, inflation only looks at the nominal buying power of that £1 - it doesn't recognise the extremes of poverty and deprivation people whom that co-operative in Rochdale was created for, and how those might transpose to our society of 2021.

A couple of quick google searches identifies that in 1844, people were most likely to be factory workers or labourers, with an annual earning of around £20.

Compare that to the average UK salary in 2021 which is £29,600 (as at 18th March).

And suddenly we start to some some big differences.

If I were to join a co-op in 1844, it would cost me 5% of what I could hope to earn in a year = roughly 3 weeks earnings (nearly a months wages) .

3 weeks wages today would be equal to £1,700.

Suddenly it becomes apparent just how radical the co-op of Rochdale was, in what it represented that meant people were willing to give up so much of what they would have otherwise spent on their rent, meals, and health (no NHS in those days!).

If you invested nearly £2,000 or a month's wages in something, you'd want to make sure you were getting value for money and a return on what you've otherwise have been spending it on (insert your favourite vice here). You'd want to make sure your voice was heard: you'd engage with any and all opportunities the organisation offered you to be part of its governance and decision making.

In short - you'd be actively involved, because it had hurt you financially to be part of it.

Most co-ops today struggle to not only recruit members, but also to encourage and maintain their involvement and engagement in their co-op's governance and activities.

Could it be because the movement hasn't paid enough heed to its history, and forgotten just how much it asked of people who wanted to be part of it, in order to keep this cost of membership current and relevant?

If co-ops today suddenly made the cost of membership £1,700 (after all, they all echo nearly everything else that the Rochdale co-op mandated and advocated), I suspect we'd seen an initial drop in member numbers. But those that did become members - how active and dynamic would they be in the democracy of their co-ops?  

Why I think Ed Mayo got it right (but mostly wrong) about co-ops and charities

Ed Mayo blogged recently about how he saw charities and co-ops being able to learn more from each other than is traditionally thought (after all: charities are based on philanthropic gifts and a desire to help out other people, whereas co-ops are based on an ethos of mutual self-help through economic trading).

And I was interested in what he had to say because I've also often thought that many other movements and sectors are more aligned to co-ops than might appear at first glance (for example - trade unions; but more on that later...).

But as much as I like Ed (after all, he did buy me a round of whiskey after I called him out at a conference he was chairing!), I can't help but feel he only scratched the surface - and I think that co-ops and charities are much more aligned with each other in more fundamental ways that he argued in his piece.

Ed pointed to 3 areas that related to how many charities are seeking to encourage more open memberships and participatory governance (both principle tenants of co-ops), and exploring 'social investment'. But these could equally apply to many other types of organisations within the wider and broader social enterprise movement.

Sorry Ed, but I have an idea that co-ops and charities are much more closely related, and at fundamental levels:

Firstly, lets look in general terms, starting with the values that define co-ops - 

• self-help, self-responsibility - internal to co-ops and their members, these are both things that charities would agree that they try to encourage and nurture within the people they support
• democracy - as Ed highlights in his blog, participatory governance is something that's a growing trend amongst charities
• equality and equity - are both enshrined in charity law to ensure that charities support people and communities in a transparent and fair way, regardless of circumstance
• solidarity - it's extremely rate to find a charity that isn't working collaboratively with other charities, or part of bodies such as the ncvo (the charities' counterpart to CooperativesUK)

And going on from that, lets then look at the principles through which co-ops enact these values - 

• voluntary and open membership - charities offer support without any condition of a person being a member, in much the same way as many co-ops
• democratic member control - membership charities have AGMs and other governance functions that mean their Trustees remain accountable to the members
• member economic participation - OK, so you got me on this one. This is pretty much co-ops only (although I do know of lots of co-ops where members aren't engaged economically with what their co-op does...)
• autonomy and independence - just like co-ops, charities are required by law to be free from any undue control or influence over them by means of corporate membership or private ownership
• education, training, and information - just as co-ops need to ensure their members are supported to be able to fully discharge their responsibilities of being such, so charities also need to be offering the same 
• Concern for community - a principle of co-ops, this is a mandatory expectation on charities through the public benefit reporting requirements that they're subject to

But the correlations don't stop there:

1. There are examples of recognised co-ops also being registered charities (for example the Co-op College)
2. The development and support needs of co-ops and charities are often the same 
3. Co-ops and charities are both recognised as being pillars of the wider social enterprise/Third/social sector (as typified by the mapping undertaken by the likes of Social Enterprise UK, and ncvo grouping them together)
4. In manifesting and managing their values and principles, some co-ops have created separate charities
5. Just as charities can trade, many co-ops can also access and be awarded grant funding 

So - charities and co-ops are closer bed-fellows that some might care to admit. And that means that when we think about who we should look to for inspiration and models of practice to learn from, each shouldn't automatically dismiss the other.

And to end where I began - co-ops and unions are closer than many might think in many ways, and this is being recognised and furthered through memorandums of understanding being created between some of the federal bodies of each sector. So might we see similar agreements and commitments starting to appear between the bodies that represent, support, and advocate for charities and co-ops in the future..?  

why do we keep insisting on keeping social and 'regular' entrepreneurs apart, when both have the same sh!t to deal with..?

In my experience of supporting various start-up programmes throughout the UK over the last 20 years, and having walked alongside many for part of their journey, most entrepreneurs don't call themselves that. 

They're simply people trying to make a go of an idea to either help them fix a problem they see in their community or help them get a bit more financial security for themselves (usually both).

So I'm increasingly frustrated when I keep seeing national sector bodies re-enforcing a narrative that social and non-social entrepreneurs need special treatment that somehow doesn't seem to apply to the other:

• the School for Social Entrepreneurs recently posted about the 5 ways that social entrepreneurs best learn - but if you took out the 'social' in the title, you'd instantly recognise them as being exactly the same way that any non-social entrepreneur prefers to learn too...

• and the recent Good Deals conference emphasised the impact that being a social entrepreneur has on their mental health - echoing the findings of the World Economic Forums' own research into the mental health of all entrepreneurs around the world... (but not seeming to make any reference or links to this...)

It therefore seems that if you identify as social or not as an entrepreneur, you're probably going to be sharing the same needs, concerns, and preferences for how you access the support you want - and this isn't anything new either: cross-sector research I did into social enterprises, charities, and private businesses all the way back in 2003 (an era of dial-up internet!) found that regardless of which sector people identified as being part of, they all had the same development needs and shared preferences for how they accessed learning and training.

And to my mind that suggests that we're continuing to miss a trick in amplifying the impact that entrepreneurs could be making on society's problems, and the wider economy - why are we creating this artificial segregation of entrepreneurs based on their founding motivations, when the support they need is the same.  And surely by learning and growing together they might better encourage, inspire, challenge, and ultimately "be" more than the sum of their respective camps..?

In the enterprise programmes I've been fortunate to have been able to manage and lead over the years, I've always sought to encourage such a 'mixing it up' philosophy, and although none were ever evaluated on the grounds of it being mixed-sector entrepreneurs, no-one in them seemed to have any problem in undertaking their journey as an entrepreneur with the others who had differing visions or motivations to their own.

So when we will we start to see (social) enterprise support agents admit that these divisions between sectors aren't really that valid or justifiable, and in doing so, be able to be more inclusive in releasing support into our wider communities and economies for the benefit of all..?

what I did in 2018 that got me noticed (in trouble?) the most...

It's that time of the year when a lot of people are starting to share their retrospectives of the last 12 months - greatest hits type profiles of their biggest 'wins', most exciting adventure, and such like.

And it struck me that although I'm now entering my 14th year of being self-employed, I've never actually done one on myself. So, in the spirit of the season, and in keeping with the adage of "try everything once apart from morriss dancing* and incest", here goes:

As this is my first one, I thought I'd try and start with something relatively straightforward and simple - what did I write/post about over the year that caught people's interest and imagination the most?

As some may know, I don't place much stock in social media analytics, so don't have fancy dashboards that track my activity across all my social media channels (and there's rather a lot of it!). So what I've done in the 'keep in simple and quick/easy to start' philosophy is to use the dashboards that are built into my blog site, and on twitter, to try and spot which post on each got the most impressions (people coming across it and reading it), as this seems to me to be the 'right' count for the sake of consistency and continuity? 

But enough already, you cry! What's the result - what did I post about this year that got the most people talking, thinking, and otherwise pausing for a brief moment because it chimed with what they're thinking about or trying to work on more (cue drum roll...):

On my blog - it was my post reflecting on my latest social impact report on myself, and how I'm now aligning it to the UN's Global Development Goals:

https://thirdsectorexpert.blogspot.com/2018/05/how-social-impact-reports-sometimes.html

On twitter - it was celebrating my being named as the most innovative in the UK in developing new csr models: 

https://twitter.com/AdrianAshton2/status/1032656981620867078/photo/1 

At first glance, this might seem a bit narcissistic (something it's been suggested I am in the past by Liam Black), but I'd like to think there's something more encouraging to be taken from this - because to me, what ties both of these posts together is something about being a responsible business: not just in a 'tick box', "we'll help raise some money for a local charity" kind of way, but something deeper about how people are wanting businesses to keep stepping up to the mark and do the right thing by everyone (not just their owners).

This idea also fits with recent national surveys highlighting that public trust in businesses is at an all-time high, while it's at an all-time low in charities, and I'd rather not go into how people are feeling about the government...

So, 2018 - the year that businesses not only heard the rallying call to be the leaders and supporters of society and local communities that we the people are needing, but have also started to try and figure out how they best answer it..?

* sadly I recently came across a photo my mum took of me as a young child dressed in morris dancing attire, but I'm determined to never do a 'luke skywalker'...

the danger of believing 'official statistics'...

Some of you may recall how I've argued in the past about how we should take the 'encouragements' and direction offered by our sector bodies with more than a generous handful of salt...

And I've based those arguments on where such bodies get their money from, and whom they're trying to curry favour with rather than asking us what their priorities should be; (don't believe me? Think back to the last time a sector body you're in membership of openly asked you what they should be doing on your behalf, openly published the results, and then reported on how far they'd delivered against those).

Some of you also know that I have a habit at looking at published research and data - not as a trained mathematical/economic analyst, but rather as an 'enthusiastic amateur', to see what new (or contradictory) stories they might offer to help us better understand ourselves and the issues we face.

And my latest 'rummaging' concerns the NCVO's Almanac and Social Enterprise UK's 'State of the Sector' survey. And the reason for picking these two august bodies? I'm refreshing some of the training courses and materials I deliver around governance in the sector, and though it might be interesting to see what both sources have to say about latest trends (as they both map legal forms adopted in the sector, and both published their current findings for the same year: 2017).

As with all surveys from different bodies, they've framed and categorised data relating to the same question against a range of different options and headings, but with a bit of rough transposition on my part, what seems to emerge is a picture of some confusion:

Quite some difference.

But so what you might say (and perhaps rightly so) - NCVO is concerned with those organisations who are predominately volunteer dependent (hence the title), whereas SEUK is concerned with enterprises that are trading - so we'd expect to see a difference, right?

Well, here's why I think this is more of an issue for us than we might think it is:

1) Policy makers, funders, and commissioners all group charities and social enterprises together into a single pot (hence the term 'civil society'). 

They don't differentiate in the way that our sector bodies do, so when they come to make policy and pass legislation that will affect us, how can we have confidence they're making the right choices when the data we're presenting them with to do so appears to be so contradictory?

2) Where the data comes from. 

NCVO's Almanac draws upon several external, objective, and credited sources, so should be pretty sound. SEUK's data is largely a collation of the returns they've received to a call for survey responses from groups in the sector - so their data is only as good as the people who fill out the forms. And that could be more of a problem than we'd like to admit: as a result they list sole traders as recognised legal types of social enterprise in their report (not sure anyone else would?), and 6% of all the CICs who responded weren't able to identify or be categorised as to whether they have share capital or not which, when added together with the other 'uncertain' responses, shows that over 10% of all respondents whose data has been collated and published as reflecting the realities of the sector today don't know what their legal form is - so how can we trust that they'll be any more accurate in other data that they give?

Let me put this another way - if we were building a house wouldn't we want to have confidence in the nature of the foundations, and that the way they'd been created would subsequently stand up to scrutiny from a variety of inspectors and other builders to ensure that what we're building doesn't come crashing down around us in the future when the weather gets rough..? 

If the data we use to act as the comparable 'bedrock' in shaping support, interventions, and lobbying for the sector is found to be suspect in the future, isn't there therefore a risk that a lot of efforts now would be wasted, hence why it's important to make sure we test such data today..?

As with any mapping exercise, there will always be ways in which the methodologies used, and the way the analysis on data captured can be criticised. My reason for doing so here isn't to belittle or reduce the efforts of these 2 bodies, but rather encourage us to pause before citing an 'official statistic' about our sector to make sure that we can be confident that it really is accurate, and in everyone's best interests to be using for the reasons we are.



UPDATE - 19 Sept 2018

There's been some new mapping research published today by Social Enterprise UK that seems to have picked up on some of these 'vagaries' I've outlined, and offers a more robust methodology in starting to scope the true shape and size of the social enterprise sector: https://www.socialenterprise.org.uk/the-hidden-revolution

Also, there's been some good debate and rebuttals and cross-rebuttals over on LinkedIn that you may also want to check out (including from the ex-deputy chief exec at Social Enterprise UK!): https://www.linkedin.com/feed/update/urn:li:activity:6447793971262418944

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..?

the best national business support policy may be no policy at all...?

I recently found myself on an 'expert panel' at a forum convened by ISBE (the Institute of Small Business and Entrepreneurship) on the future of business support policy in the UK, as part of their ongoing conversation into informing and shaping what a new national policy should be.

(OK - to clarify, I was technically there as Leigh Sear of SFEDI and the IOEE, but as he'd been called away overseas, he asked me to fill in for him, hence the confusion of my having 2 names at the forum.)

And while I shared various stories and approaches to business support with those present, I thought it might also be useful to capture here some of the other speakers' arguments and discussions with those in the room that stuck with me, as well as some of what I took away that I'm still mulling over, and that will likely also inform my own ongoing activity in this field:

The definitions debate

With the almost fetishism of high growth in business support policy, it seems that the definition of what constitutes 'high growth' may be too exclusive in excluding many businesses who are seeing significant increases in revenues, but aren't matching this with creating lots of direct employment opportunities (such as software firms, and something that will be be increasingly the norm with the rise of the 'gig economy').

As a result, many businesses who have the potential to contribute greatly to our economy are being sidelined and overlooked - surely to our cost...?

Not a 'bottomless well' (of growth)

It also seems that business growth isn't something that can be sustained - various data sets shared by the ERC(https://www.enterpriseresearch.ac.uk/wp-content/uploads/2017/04/ERC-InsightPap-HartDanes.pdf) all indicate that firms can only experience grow for about their first 5 years, and then all mature and plateau; so if policy is to prioritise support for growth, we need to be more open and honest in recognising that businesses are only able to do so for a time limited period.

Measures of success

There seemed to be a general consensus that we need to use more that just financial measures to consider success in business growth - and that these should reflect the aspirations and motivations of the entrepreneurs and owners behind the businesses.

However, I've an idea that whatever these measures are should share the same characteristics as metrics in financial accounts: that they can be bench-marked externally to help us better consider how we compare and contrast with others to fully appreciate just how successful we really are, and that they can be aggregated to form data sets and evidence bases to allow us to better represent and lobby on their behalf.

Whose benefit is policy actually for?

Discussions around the different players active in the business support arena raised a question about who business support should be for, and who should be paying for it. Public policy should take a utilitarian approach, facilitating and enabling the most benefit for the most people, and in the real world, this means that the State can't appease everyone, or provide for all business types and needs (hence it's prioritising of high growth over sole traders as it believes this will create the most impact for more people).

However, we're seeing private firms starting to offer accelerator and incubator programmes, and also sponsor others' enterprise development and growth initiatives. So rather than try and create a single public policy that will encompass everyone, should we rather be taking an approach that uses simpler policy frameworks around different themes and types of enterprise/entrepreneur; better recognising that in some instances the private sector is better placed, and should be leading on elements of support?

The rationale (and risks) for enterprise education to be a recognised part of business support

There seemed to be agreement that any role Universities hold in delivering any policy around business support needs to include elements of enterprise education, and while there are good reasons for this, there are also some risks too - 

• teaching and encouraging entrepreneurship amongst students increases their future employability by developing skills that employers value
• degree apprenticeships creates opportunities for universities to capitalise on their role as a provider of learning, but there's no clear models for how Universities might best harness this new model (yet...)
• there's a risk that in some universities having linked their offer of enterprise support to that of national policy, many student startups are being 'lost' or 'fail to launch' as the University is too focused on encouraging high growth and Intellectual Property-based ventures
• with the rise of corporates taking active roles in offering business support (including where there may not be an immediately obvious business case for them to do so), there's a need for Universities to better co-ordinate their offer with these to capitalise on knowledge and expertise that both are developing - but tellingly, there was no presence from any such corporates at the Forum...

The holy grail: creating a pipeline of support for startup to high growth

Within any national policy that emerges, there will need be a recognition that encouraging new startups is just as important as supporting growth in existing businesses - but that its also difficult to ensure that this progression is smooth or able to be well managed. This is largely because of not only the sheer diversity of different business types and motivations, but also the plethora of support available to them at different stages and in different sectors.

In theory, Local Economic Partnerships should be well placed to better co-ordinate these support offers to maximise their potential for wider benefit, but the experience of many seems to be that owing to the governance models of LEPs not being inclusive or transparent enough, that such knowledge and co-ordination which could unlock the potential of many firms, isn't happening.

If we can only do one thing...

As a closing to the panel debate, a few straw polls were taken of people in the room, asking for shows of hands to gauge what the focus of national policy should be if it could only focus on one thing: more start-ups, or more scale-ups.

(Personally, I'm in favour of more start-ups: they create and encourage more diversity and choice in an ever-changing society; help us develop more resilience; and research shows that the larger firms tend not to stick around that long anyway - the FTSE100 has a churn rate of about 10% each year!)

Overwhelming the room voted in favour of more start-ups.

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.