My cover story for this week's WE on government-funded self-employment programs.
EDUCATION: Self help
By Andrea Warner
A few months ago, Vancouver’s Pauline Siu celebrated the first anniversary of her small business, an ethical and eco-friendly clothing label called flora&fauna;. In the midst of an economic downturn so fierce that B.C.’s unemployment rate has almost doubled in the past year (119,000 in July 2008; 200,000 in July 2009), Siu’s success is noteworthy — even more so given that she doesn’t have an MBA and, by her own admission, had no real business acumen when she started. Instead, Siu is a graduate of one of the government-funded self-employment programs that are now churning out some of the province’s best entrepreneurs.
With tuition fees proving prohibitive for many Vancouverites (particularly those queuing up to receive EI benefits), intensive self-employment programs offered by institutions including BCIT, Douglas College, and S.U.C.C.E.S.S. are an attractive — and lucrative — alternative. Most of the programs boast a 90-per-cent success rate, meaning graduates sustain their businesses through that first crucial year.
“I’d been wanting to start flora&fauna;for a couple of years, and I’d been working in the fashion industry, but I knew nothing about business,” Siu says. “Before I found out about the BEST [BCIT Entrepreneurial Skills Training] program, I was considering going back to school for a bachelor’s in business, but I’d already spent so much time in school. When I found out about the program, I was so relieved, because it meant I was getting what I need to know for a small business, whereas the university program would be about big business.”
A typical government-funded self-employment program offers 12 weeks in the classroom and 40 weeks of real-world learning, with advisors helping to guide students through the process. Funding conditions mean that applicants must meet specific criteria (i.e., having an active EI claim, or having received EI within the last 36 months, or having received a maternity/parental claim in the last 60 months) to qualify for the program. Paid versions of these programs, such as BCIT’s Venture program, are also available to applicants who don’t meet such requirements.
Most applicants vying for a seat are simply following a growing trend, as indicated in a July report from Statistics Canada on labour force conditions. From July 2008 to July 2009, the self-employment sector was B.C.’s sole area of growth, increasing six per cent (about 28,500 people). Siu and her 16 peers in the BEST program were among those who made the leap.
Although the application process for a self-employment programs is intense, Siu credits it with “getting the ball rolling,” and helping her to “think like a business person.” A business plan must be submitted for review, and applicants have to agree to participate in numerous interviews. The information is then scrutinized by a committee that determines one’s eligibility. The daunting process helps prepare prospective students for the seriousness of starting one’s own business.
Melanie Burke, owner of Gastown salon Burke & Hair, graduated from the self-employment program at Douglas College more than four years ago, and credits the program with helping her business to thrive.“I probably could not have successfully opened my business and stayed open without that program,” she says. “I took it because I needed to know how to run a business aside from doing hair — that part I knew really well, but I didn’t know how to set up my inventory or do my taxes, and the program offered a lot of insight into how to do that. They had experts in the field who came in and talked about how to do specific things. I don’t know how anyone opens a business without taking a program like that!”
“It eliminates your chances of making those huge mistakes,” Siu says. “All of your classmates are thinking, or trying to learn to think, in a business way, so just to bounce ideas off of them [is important]. We still meet every month; there are 17 of us who are still doing the businesses they planned on doing. I mean, no one’s raking it in, but being able to sustain yourself like that is amazing.”
Ironically, though, the program Siu credits with helping her launch her business is currently on hiatus. According to Ken Takeuchi, business advisor to BCIT’s Venture program, BEST fell victim to government consolidation and bureaucracy last year. “It’s something that slipped through the cracks,” he says. “Basically, at the end of last year, all contracts for self-employment programs were under review. Service Canada, who was the partner in the program at that time, felt that there were more programs out there than there was demand for. Vancouver had five, and they dropped it to three. The Burnaby/New West area dropped from two to one.”
It was the tiniest of cracks that BEST fell through. Its staff submitted all the required paperwork, thinking it would be a “rubber-stamp kind of thing,” but failed to submit one spreadsheet in quadruplicate. Thus, the program was disqualified from the bid process, despite its long history of success: 10 years, 700 graduates, and more than 70 per cent of its graduates continuing to operate their own business. Now, a year after the decision to cut programs due to the booming economy, the unemployment rate has almost doubled, increasing the demand for the programs.
“In hindsight I’m sure they’re kicking themselves for it,” Takeuchi says. “We were pretty upset, and felt the system lost a really strong program. Hopefully, looking ahead, they have to maintain an adequate service level. Let’s face it: As much as this downward trend came very suddenly, there are economic cycles to be aware of.”
Loretta Hands, program assistant for S.U.C.C.E.S.S.’s self-employment program, which helps landed immigrants and other qualified applicants, says the number of e-mail and telephone inquiries she’s received since November, 2008 have doubled. This past June (“Traditionally a slow time,” she says ), the program received 36 applications for 16 seats. Web traffic for the site has increased 27 per cent over the last three months.
As for cuts to the program, Hands says S.U.C.C.E.S.S. has actually received increased funding to expand the number of intakes through 2011 (five per year, versus four in 2008), but she admits that the workload for staff has doubled.
Mari-Lou Shoukar, marketing manager for Douglas College’s two self-employment programs, has also noted a spike in interest. “The information sessions are full all the time,” she says. “We hold seven sessions per program, per month, and it’s easily been double to triple the number of attendees.”
With a set capacity, and no foreseeable room for growth until self-employment-program contracts come up for renewal again in 2010, the government appears to be attempting to tackle the unemployment problem from a different angle, and BCIT is determined to provide a solution through a proposed business-skills training program.“Because of the unemployment rate, there was a call for proposals to have people upgrade and find better employment for themselves,” Takeuchi says. “Not so much to start their own business, but to learn a lot of the business skills to help them be better employees.”
As Siu prepares for flora&fauna’s second year of business (at the time of our interview, she was choosing between two different models for a photo shoot), she’s taking comfort in having met other graduates of similar self-employment programs — in plenty of surprising places.
“Right now I only work with other local small businesses, because that’s the scale that I’m at, and it’s what I want to support,” Siu says. “I just found out that my screen-printer went through the program seven years ago, and a number of other independent local designers have gone through similar programs as well, and they’re all still in business several years later. You never think that, like, ‘It’s just me who’s gone through this.’ It’s a nice thing to see.”
