The growing ranks of the self-employed are not alone, an entrepreneur tells James Hurley
Emma Jones has a novel way of levelling the playing field between big businesses and their smaller counterparts when it comes to tax planning. The energetic founder of Enterprise Nation, a networking organisation for the self-employed and owners of small companies, got the idea while planning a trade mission for her members to Dublin.
“One after the other, we are going to visit Facebook, Twitter and LinkedIn, because their global headquarters are there, and we all know why,” she says. “We should set up our own patch of land there where small businesses can register their headquarters and get the same benefits.”
Ms Jones may be half-joking, but her determination to speak out on behalf of the little guy is genuine. Doing just that is what brings home the bacon.
She started Enterprise Nation in 2005 after reading Free Agent Nation, a book about the rise of the self-employed in the United States by Daniel Pink. “I bought ten copies and sent it to people and said: ‘You must read this because he is absolutely right.’ I thought the UK would follow in America’s footsteps.”
Britain has two million self-employed people. Between 2009-14, self-employment in the UK rose by almost 140,000 a year, compared with a long-term average of 40,000 a year before the financial crisis.
Enterprise Nation is an unashamedly for-profit venture, Ms Jones says, that wants to play a role in everything from providing nationwide business support to campaigning on government and European policy on behalf of its members. On the latter front, the 43-year-old says that her organisation can compete with the Federation of Small Businesses — by far the country’s largest membership and lobbying organisation for private companies, with about 200,000 members. Enterprise Nation has a more modest 66,500 members, but it is growing quickly thanks, its founder argues, to a different outlook and membership profile than the 42-year-old FSB.
Ms Jones’ members are often home-based business owners who use outsourcing and online tools to punch above their weight, often trading globally despite often having no (or few) staff.
“The reason we launched our membership [offering] is the kind of companies we work with were looking at membership organisations and thinking : ‘That organisation doesn’t look like me or represent what I want represented.’ There are things we have campaigned on that are not FSB territory. Today’s modern business owner has issues that the FSB is not seeing or reflecting because they don’t always hear about it.”
For an example, she points to Enterprise Nation’s voluble campaign in 2014, when an overhaul of VAT rules forced tiny companies, including those that had been exempt from VAT, to charge the tax on digital products sold to consumers in the customer’s country rather than their own.
While some of the network’s members have graduated to conventional offices, the focus remains on those running “micro businesses”.
About 10 per cent of Enterprise Nation members pay £30 a year for membership, with most of the remainder joining for free through partnerships with businesses such as O2 and Xero, the accountancy software firm. Members also are invited to pay to attend regular events and trade missions, while the body makes further money from corporate sponsorship and delivering government business support contracts.
More contentiously, it has 2,500 paying “advisory” members, who are allowed to sell their services to Enterprise Nation’s members in return for a £50 annual fee. The FSB frowns on this approach, but Ms Jones says that she is providing an effective online network and marketplace for members.
She is markedly unconcerned that the libertarian tendencies of Sajid Javid, the business secretary, will spell a downturn in trade for Enterprise Nation if he continues to axe state business support programmes. Quite the opposite, in fact: “In ten years of doing this, I have never seen the public sector being so hands off [with business support]. We have a business minister who believes that if the private sector can deliver the support, why should the taxpayer do it? They want the private sector to step up. I don’t think we are being opportunistic, [but] we look at and say: ‘Let’s make sure businesses are still getting advice.’ ”
Since Enterprise Nation has thrived on the back of booming self-employment, it is no surprise that Ms Jones disagrees with the suggestion that the rise of the freelancer might simply be down to a lack of good opportunities in conventional employment.
“People could go back into jobs now and they haven’t, they are still starting businesses. The biggest reason why people didn’t start a business was the fear of failure. Now you can start a business without leaving the day job and for less than £100. There is less risk now. It has become normal.”
If sizeable self-employment is here to stay, there will be plenty for the likes of Enterprise Nation and the FSB to say about how the state and big business deals with freelancers, from mortgage provision to pensions and sick pay. However, Ms Jones is characteristically cautious about calling for more state intervention. “We do need to look at things like the benefits system for the self-employed, but we don’t want to tip the balance too much so that the self-employed become employees. What we love about them is their verve. They have to get up in the morning because their wages and our economy depends on it.”
Behind the story
The Federation of Small Businesses and Enterprise Nation may compete for members, but they agree that small traders are facing a tricky year (James Hurley writes).
In his new year message, John Allan, chairman of the FSB, raised the challenges posed by the introduction of the living wage, the roll-out of statutory workplace pensions reaching the smallest employers and an overhaul of dividend taxation.
Emma Jones, founder of Enterprise Nation, cites those issues and adds the additional “burden” of looming tax rules, which could force small businesses to supply the taxman with updates four times a year, instead of once.
“None of these things is good for small businesses — it’s a bit of a perfect storm,” she says. “The living wage will have an impact on small business employment. It will force some businesses to move production offshore, which is a shame. And HM Revenue & Customs are focusing way too much on small businesses because it’s easier to go after them than big business.”