To think it's impossible to come off benefits to start own business?

[HipHipHippoo]

I have been claiming income support for a couple of months after being made redundant from my job. I found another recently but now they've changed the original requirements to include one weekend day which I can't do as I'm a lone parent.

I really want to start my own business as a childrens party organiser. People always remark on my children's parties, and I've organised and hosted them for friends children too. I know it involves weekends too, but I could do it with my DC around. I just know I could make it a success.

I spoke to the advisor at the job centre about how I can survive while establishing my business, whether I can receive partial housing benefit while I'm not earning much at the beginning and so on. She pretty much told me it's not worth the effort

I have no support or savings and am really struggling to survive on benefits. I just don't understand how I can transfer to my own business and survive (without being fraudulent!) Has anyone else managed it and could possibly offer any advice? Or is the advisor right and it's just not possible?

No-one is going to want your DC around at their party. You'll get a horrid name for yourself in the circles that you need to be impressing.

OP probably won't be back. Her friends and family have given positive feedback, so that's enough to make her think a business work... but as so many failed business owners will tell you, it isn't enough.

Mumsnet seems to have a high proportion of middle class mums, so it's a good place to hear opinions from the type of people you'd be advertising too. But doesn't sound like OP wants opinions.

when you start a new self employed business you have 3 months before you need to inform inland revenue it exists,

you can make about £1000 on the side each year without declaring (ie ebaying / babysitting / gardening the odd party hosting) this type of ebaying is buying to sell on not selling what is yours or your kids surplus possessions. I would try and do this so you have a £1000 cushion
you have a year with a start up before you need to be making minimum wage if you are claiming benefits too; no-one is expected to make money on day 1 and so to start with it will be topped up

extracted from official guidance
"Start-ups
If your business is less than 12 months old, the minimum income floor won’t apply to you for one year.

During this period, you will not have to look for other paid work.

However, you will have to attend an interview every three months to prove you’re still gainfully self-employed and be taking steps to increase your earnings.

You will be allowed one start-up period every five years."

if you have been self employed more than 12 months
minimum floor level is worked out as 35 hours ( it can be less hours if you have children under 12) at minimum wage minus NI and tax, if you earn over this universal credit drops by 63p per pound earned however if after a year you are not making floor level you are no longer compensated for this

OP, things have probably changed since the roll-out of Universal Credit, however the DWP used to have a variety of schemes to support people like yourself who have a business idea and want to work on that rather than just go through conventional job-hunting.

I was in your exact position and was signed up for a programme where you are mentored through the process of getting your business up and running, a programme which was outsourced to other providers but all the while I was still entitled to Job Seeker's etc.

If your idea isn't viable they won't take you on, but if they see the potential they will help you to realise it and advise you every step of the way.

When my business launched I of course came off Job Seekers but the outsource company paid me c. £66 a week for the first three months and £33 for the second three, then a bonus of £500 after 6 months (for not giving up) to see me on my way flying solo. Working Tax Credit was claimable if I needed it, and I'm pretty sure housing benefit was too, as for any low earner.

This was just three years ago, so there must still be schemes like this, otherwise the outsource companies, who seemed to work solely with DWP clients, would all be out of work too.

I'd try and speak to a different advisor, as the DWP isn't just about getting you to look for jobs, it's about getting you into work and if that's self-employment then they should still have the courses to help you do it.

Good luck!

It is possible to start your own business and come off benefits, but those businesses usually have long term contracts or services which generate repeat business. I'm an accountant who deals with start ups on a regular basis.

You anticipate charging £150 to £200 per event. Very few people are likely to use you until you are established, which means that you will initially be dependent upon friends and family. I can guarantee that they would expect "mates rates" and you would need lots of different groups of contacts to build a reputation outside your immediate group. This also means you need to be able to generate a lot of different ideas, as each child/parent will expect a unique theme. I also agree with the others that you are being very unrealistic about the weekends involved and your client's expectations for you to have your own childcare in place.

Have you considered developing a small range of "pre-packed parties" charging £x per head. For example, I used a company which sent laminated recipe cards, aprons, chefs hats and fabric pens for a cookery party, all beautifully packaged. That would enable you to work when you have childcare and devote the rest of your time to your family. You would need a good website, but it really is more feasible than a party organiser with so many restrictions on how, where & when you can work.

OP - don't give up yet! I'm an LP with a nearly grown SN DS.

In my over 40 years of 'adult' working life I have never found the Job Centre (since they were established) particularly useful for anything except for turning up as present. I've never got a job from one, nor any useful advice, so don't let that Job Centre lady put you off.

Wiith regards to 'floor levels' and Income/hours worked, I think exceptions apply if you are a Carer (in receipt of Carer's Allowance) who cares for someone in receipt of at least mid-rate DLA (usually so for a dc) or PIP. This is in regards to UC. ASFAIK there is no Income floor level (floor level = NMW for hours worked) for TC

I got this info from an excellent link that a MNetter provided in a different thread a few weeks ago so you will need to research this yourself. Also, from the link (which took apart and explained every feature of UC) there are supposed to be various 'pathways' where exceptions to the 'floor levels' also apply as you build up your business.

If I hadn't been self-employed there was no way that I would have been able to work at all due to DS's SN. And whilst my income might be low, I know that the many other self-employed and small businesses that I do business with would have found the 'market rate' for the services I provide too crippling. Most are already paying through the nose for rent and business council taxes.

The Children's Party Planning sounds a great idea - you have done them already on a low budget and people have commented how good they are.

Forget the Banks, keep your rates appropriate to the people you are charging, don't lay out on any materials without an upfront payment. You will spend more time on working than the NMW pays at the start of this - but as long as you aren't out of pocket it's really better than doing nothing at all.

I know how tough it is, but I don't think taking your own DC to a client's party is a good idea - even if you have to pay someone to watch them whilst you're 'working' at the party and break even or even lose a couple of quid, it's worth it as you build your business recommendations.

Good Luck OP

I'm not planning on taking my DC to the actual parties. I would be setting up activities and props, then returning to tidy up at the end so it wouldn't make a difference if my DC were there.

I'm currently waiting for the result of my DLA claim for DC.

it wouldn't make a difference if my DC were there

It definitely would if (for example) you would be using venues that charge for setup/tidy up time

If you couldn't continue your current job with 1 weekend shift because of your dc how will you manage 4+ weekend parties? You should get employed in this industry and gain more experience whilst having the backup of an employer for now. If that works out perhaps you'll be able to set up your own business in the future

Three kids, one who can't be left with anyone else, yet it won't impact how well you work?

Your insurance provider will not cover you if you tell them your children will be running around whilst you set up. If anything happens to one of your kids, or if your kids manage to destroy a prob or break something in the venue etc then your insurance won't pay out. But my guess is you just won't tell the insurance company.

If I'm paying for an hour or set up and 30 minutes of clear up then I expect a full hour of complete concentration on the set up. You cannot give that because you'll be looking after your 3 children during that time too. People won't pay for that.

Your obviously going to do it anyway but I wish people like you would actually listen before you go and blow a few hundred pounds which you don't have on a folly.

What if someone is throwing the party in their home or garden? Are the supposed to just let your kids in to run wild whilst you work? Because you can't supervise your kids.. You will be working. What if they don't want your kids in their house whilst the are prepping party food and doing a final clean up?

And if the venue only allows (or the parents only pay for) a half hour before and after for set up and cleaning... You can't supervise your kids because you will only have a short time in which to work.

Think it through.

You can be self-employed and receive housing benefit & tax credits.

The British Library do loads of online business seminars you make an appointment then 'attend', so to speak. Or you can go see a business adviser in your area, look up info online

I would be setting up activities and props, then returning to tidy up at the end so it wouldn't make a difference if my DC were there.

So not running the party? No food? Who would run the activities?

How much reasonably would people pay for that? You can but props for pennies from China via amazon if you are prepared to wait.

I think people would expect the party organiser to stay for the actual party, not just setting up and clearing up.

I also think people won’t want to be paying you to set up and clear up if you are supervising three children at the same time.

But most people have parties at similar times 1:30-5:30 in between those times. Say you had three booked as you have projected, factor in travelling and possible delays- how in the world are you going to do it, be in three places at the same time to start and clear up??? I’m honestly would not work!

As I said above, I'm not looking for advice about the actual business. Just how to transition from benefits to self employment.

The first step in transition from benefits to self employment is to have a viable business... which you don't have.

Then you need to have a safety net of some savings to get you through. If you're not already on UC then this will trigger a move, so that's 5 or 6 weeks with no benefits income. Do you have the money to cover that time? Plus the extra needed to finance the start of the business?

Then you will need to report your profit and your benefits will be calculated accordingly (the first year doesn't have the minimum earnings so you'll be ok for that time).

You need to register as a sole trader with HMRC so learn how to keep your books and have everything in order incase of a random check and also for your tax return.

I've paid the amounts you're asking for parties but that's covered the cost of entertainers, or animal handlers or science boffins or softplay. Unless the props you're setting up are a full on tumbletots bonanza, I can't see how you'd possibly charge that much when you're not even there for the party. Even a bouncy castle isn't that much. People pay someone to run the party for them (because it's hell!). I've never come across someone who gets paid not to cover the actual party. I know it's not what you're asking but nonetheless it's not coming across as a job that could get you off benefits.

Incidentally I'm self employed and as others have said, I built up my business while working in a full time job then gradually went part time and eventually could afford to support myself. That's the only way really.

Op I know your question was different but it's never wise to ignore other people's experience, knowledge and also your target market's opinions. That's how businesses fail at the beginning.

It sounds tough, but all the concernes mentioned in here are absolutely valid. Especially the ones about insurance.

Just as an FYI, going from income support to 16 hours self employed absolutely will not trigger a uc claim

You could look at tax credits instead, I presume you already get child tax, so working tax would not be a "new claim" for you. You'd just ring up tax credits and tell them you've started work. However unless you yourself get DLA or PIP you will no longer be able to go back on income support if the work doesn't come in, as they've stopped almost all new claims for older benefits from Feb onwards including for those with 3 or more kids.

If I paid that amount of money for you to run a party, I'd expect you to handle everything (including providing the entertainment/ activities) and not bring your kids along.

Have you looked into Kickstarter or a go fund me?

And you have been told, you need to have a savings cushion to use as you transition off because it will trigger a UC claim or cause your entitlement to fluctuate. That's how you transition.