Get the most out of your Inc. online experience by registering and joining the Inc. community today. Get access to all Inc.com content and priority invites to free Inc. networking events in your area.

Login using:


Or login directly through Inc.com

The Ultimate Unemployment Benefit

A federally-sponsored program serves as a springboard for unemployed workers who want to start their own businesses.

By Alessandra Bianchi | 
 

After losing his six-figure-income position during a downsizing at a Massachusetts computer company, in August 1990, Steve Kirk saw his luck change. A month later he became a participant in the Massachusetts Enterprise Project (MEP), a federally sponsored program that seeks to test the viability of self-employment as a reemployment alternative for people on the dole. Modeled after successful programs in France and the United Kingdom, the MEP is designed to serve as a springboard for people (eligible for unemployment benefits) who wish to start their own businesses. Participants receive business-development consulting in the form of seminars and one-on-one training sessions; small-business loans for qualified borrowers; and a stipend equal to the person's regular unemployment compensation for 24 weeks.

Kirk launched his business, ESI Computing, in Carlisle, Mass., on personal savings of $40,000 and expects revenues to top $1 million this year. The program's biweekly training seminars in tax, legal, and accounting matters "allowed me not to spend a lot of money in the beginning on professional services," he says.

After losing her job as a nurse in a Wellesley, Mass., health-care center, last year, Rose-Marie Batts began to think about her options. One-on-one sessions with an MEP business-development consultant taught her "how to focus on what I needed to learn and on the development of my actual product," she says. Today Batts Healthcare Consulting Services, in Acton, Mass., launched on savings of less than $6,000, helps companies comply with Occupational Safety and Health Act standards and expects first-year revenues of $20,000.

Boston-based Shawmut Bank, the MEP's bank partner, has made $236,400 in commercial loans to program participants. Massachusetts is the only state in the country to test the federally sponsored self-employment option. MEP director Bonnie Dallinger says her department's next task is persuading the Clinton administration to incorporate self-employment options in its economic-stimulus package. -- Alessandra Bianchi

* * *

Savings to the Unemployment-Insurance Trust Fund

Project Control
participants group
(510) (510)
Started business or found job before end of regular benefits period 57% 34%
Exhausted regular benefits (remained on unemployment) 40% 65%
Collected extended benefits 31% 43%
Average benefits paid per person (including extensions) $7,502 $8,927
Average weeks collecting unemployment insurance (including extensions) 28.3 33.7

Source: Massachusetts Department of Employment and Training, May 1992.

* * *

Read more:

  • What You're Not Doing to Maximize Profit (But Should Be)
  • Redbox's Smart Move: What You Can Learn
  • What Makes a Company Resilient?

    • Sign-up for our Small Business Success Newsletter