Kleurrijk Ondernemen (Colourful entrepreneurship) is a project initiated by the Province of North-Holland and the Municipality of Zaanstad in 2002, with funding from EQUAL of the European Social Fund, as well as national, provincial and local funding. The project has been extended and is currently managed by the municipality of Zaanstad.
This policy measure has been implemented by two main partners, one public and one private. The municipality of Zaanstad is the coordinator of the project and responsible for reporting, administration and monitoring. The private organisation Mind4steps is responsible for the programme’s realisation of the programme. Three departments of the municipality of Zaanstad are involved in the project: the Department of Economic Affairs, the Department of Social Affairs and the Department of Communication. Other outside organizations providing regular services to the project include the Chambers of Commerce, the Dutch Tax Administration and the Centre for Work and Income (CWI).
Funders and funding
The project started in 2002, has been extended twice and is still up and running. It covers three time periods, each with its own sources of funding and budgets (see table).
The first Kleurrijk Ondernemen project started in September 2002 and ended in May 2004. Kleurrijk Ondernemen I was one of ten Innostart projects initiated and coordinated by the province of North-Holland, with the financial support of Equal of the European Social Fund. Innostart aimed at promoting equal opportunities for socioeconomically disadvantaged groups to start their own business within the Province of North-Holland. The total cost of the Innostart programme was € 3.5 million of which € 1.7 million was financed by Equal. The Province financed Innostart with € 726,000. The budget for Kleurrijk Ondernemen was € 235,015 of which the Municipality of Zaanstad contributed € 88,132. The remaining budget was provided by the Innostart (Province of North Holland and Equal funds).
The policy aim of the Municipality of Zaanstad, in particular the Department of Economic Affairs, is to strengthen the local economic structure and to stimulate the employment situation. This includes the promotion of entrepreneurship and increasing the number of start-ups. The point of departure for this project is, first, aiming at economic results and, second, to promote social involvement with certain target groups. This policy consisted of three projects, one of which is Kleurrijk Ondernemen (Ministry of SZW 2005: 15). Kleurrijk Ondernemen I was so successful that the Zaanstad Municipality decided to continue its support of starting enterprises. This resulted in Kleurrijk Ondernemen II. The project, which started in January 2005 and ended in January 2007, was funded completely by the Municipality of Zaanstad with an annual budget of € 75,000. Kleurrijk Ondernemen III started in May 2007. It has a budget of € 252,000 for the total period of two years, of which €67,000 is provided by the Ministry of Social Affairs (Fund Allochtonen & Arbeid - Migrants & Labour), and the remainder by the Municipality of Zaanstad.
The objective of Kleurrijk Ondernemen is to support starting entrepreneurs in order for them to be and remain successful. The first project fitted the main objective of the labour policies at the provincial level, which was to open up opportunities in the labour market by promoting self-employment. The objective of the second project was to promote self-employment among migrants and women in line with the policy of the municipality. The third project has the same objective, only the targets are clearly defined: namely, 45 participants and 20 start-ups of migrant women. The project is financed by the Ministry of Social Affairs from a specific fund for migrants and labour
The Kleurrijk Ondernemen projects target ethnic minorities and women in particular, since these groups are underrepresented in entrepreneurs and the failure rate of start-ups in these groups is relatively high. The projects are additional to support programmes directed towards persons on welfare who start an enterprise, as this group can already receive financial and business support through the Provision of Benefits to the Self-employed Decree (Besluit Bijstandsverlening Zelfstandigen - Bbz).
How Kleurrijk Ondernemen works
Kleurrijk Ondernemen makes extensive use of intensive and personal coaching of the participants. It does this with the services of the business advisory company Mind4steps. There are no costs for participants involved. Potential participants may apply and providing they meet the criteria, their application is followed by an intake meeting. The most important criterion for selection is firstly the chances of economic success of the proposed enterprise [CHECK], and secondly belonging to one or both of the target groups: migrants and women.
- Intake meeting
This meeting is a way of gaining information about the personal situation of the clients and the motivation of the potential entrepreneur. During Kleurrijk Ondernemen I, the intake meeting took place at the municipality’s Department of Social Affairs; in Ondernemen II it was handled by the business advisory company Mind4Steps. Eligible candidates were then proposed to the Department of Economic Affairs, which made the final decision on admission to the project.
- Selection and contract
As outlined above, final selection of participants is made after an initial intake meeting. The selected participants then have to sign a contract that states their commitment and willingness to participate in events and to cooperate with publicity. There is a confidentiality clause regarding their personal data; a clause stating the extent of their ‘personal budget’ (see below); and an explanation of their three-months' probation.
- Personal coaching
Together with Mind4steps an individual coaching plan is then set up which consists of: An action plan A training needs assessment Required information and advice Expectations of participants Start date of enterprise
The most common areas in which entrepreneurs require support during Kleurrijk Ondernemen I and II were:
Business plan Financing/credit possibilities Business administration/taxes Business location Marketing/clients Starting an enterprise from a unemployment benefit situation legal form
- Personal budget
In Kleurrijk Ondernemen I, entrepreneurs received a personal budget of €3950, which could be spent on business-related investments. This amount was reduced to €2500 in Kleurrijk Ondernemen II and III in order to allow more entrepreneurs to participate in the project. The potential participants were not informed on this personal budget beforehand, since it could have become the wrong motivation to participate in the project. The award of the personal budget is bound by strict rules. In principle it is a gift, unless the participants drops out of the project before completion (in which case it should be reimbursed). As a general rule, the expenditures should be of decisive importance for the start-up of the enterprise, and can only be spent on (at most) two of the following items: knowledge, production resources, marketing or general and technical services. The allowance of the budget always requires authorisation of the project leader. Once the purpose of the budget is determined, the entrepreneurs are in charge of choosing their suppliers, requesting quotations and handling the payments. Subsequently, they can declare the costs at the Municipality/Mind4Steps (Kleurrijk Ondernemen I and II respectively). There has been no abuse of the personal budget; participants who have not been able to set up their own business simply did not use it.
Many of the entrepreneurs had questions about selling techniques, business administration and business presentation. Three workshops were held for the entrepreneurs that covered these topics.
- Presentation at centrally organised event
At the end of the project, all entrepreneurs had the opportunity to present their business in an event that resembled a trade fair. Moreover, the enterprises are mentioned with their contact details on the project website www.ko-zaanstad.nl.
So far, only the results of phase 1 and 2 are available, since the third project has only recently started. The following table gives an overview of the number of participants and starters in Kleurrijk Ondernemen I and II, divided according to the two main target groups, migrants and women.
Kleurrijk Ondernemen I Kleurrijk Ondernemen II Participants 27 Participants 32 Migrants: 17 Migrants: 18 Natives: 10 Natives: 14 Women: 14 Women: 25 Men: 13 Men: 7 Start-ups 18 Start-ups 25 Migrants: 11 Migrants: 13 Natives: 7 Natives: 12 Women: 9 Women: 22 Men: 9 Men: 3 Source: Kleurrijk Ondernemen 2004; Kleurrijk Ondernemen 2007.
To assess the results of the project in the longer term, it is important to know how many of the start-ups are still in operation. It appears that out of the 18 start-ups of the first phase of the project (2002-2004) 16 were still in operation in 2007. Next to the numbers of participants and starters, another measurable result of the project is the effect on employment. During Kleurrijk Ondernemen I there were 10 participants who were receiving unemployment benefits. In the second project, there were nine participants who were former unemployment-benefit recipients. This means that the project also promotes the labour participation of the former unemployed.
Monitoring of Kleurrijk Ondernemen
The project has been both internally and externally evaluated. First, as part of the normal procedure, the municipality had to report back on the results, including the financial reporting, to the subsidisers, the EU/province of North Holland. The project is also evaluated by the municipality of Zaanstad, on the basis of evaluation reports by Mind4steps (Kleurrijk Ondernemen 2004; 2007). The division of tasks between the municipality and Mind4steps has changed slightly since the first project, based on lessons learned. For example, in the first project the intake procedure was managed by the Department of Social Affairs, which turned out to be daunting to some of the applicants. Intake procedure was therefore transferred to Mind4steps for the ensuing two projects. Likewise, though the Municipality managed the ‘personal budget’ during the first project, its complicated administrative procedures meant long delays of six to 12 weeks until the applicant actually received the money [CHECK]; the granting and administration of personal budges have since been transferred to Mind4 steps to speed up this process.
Assessment of Klerrijk Ondernemen
In order to assess the quality of the project Kleurrijk Ondernemen as a good practice, the following aspects are outstanding.
The project is targeted at migrants and women, and one of its intentions is to promote the labour-market participation of the unemployed. A specific approach was thus required to make the project easily accessible for participants. This was realized by:
Free participation The acquisition methods Personal approach and individual coaching
In the testimonials of the entrepreneurs in the Kleurrijk Ondernemen evaluation, the following positive aspects of the project were mentioned:
1) The personal budget 2) Availability of support and feedback when needed (also outside office hours), especially on aspects such as business plans, business administration, marketing, rules and regulation, taxes and insurance 3) The contact with other participants 4) The personal nature of the support 5) How the business support speeds up the process of setting up a business 6) Support received worked as guidance and encouragement
- Effectiveness and efficiency
The small-scale character of the project and the intensive working method combined to make this project effective and efficient. Minimal bureaucratic procedures, a direct relation between client and coach, and relatively low infrastructural costs seem to result in a favourable relation between input and output. In comparison to other good practices, the number of start-ups might be lower, but in relation to the budget and the input of personnel the project can be said to be successful. This is evidenced by several elements of the project. The costs for business support per entrepreneur, for example, are estimated to be €2000 (including the personal coaching; excluding the personal budget). The remaining budget was spent on communication, workshops and acquisition, among others. Another example of the effectiveness of the project relates to the acquisition methods. The extension of the first project already showed that the investments made in the first project paid off, as less marketing was needed to acquire new participants.
The most innovative aspect of this project is its personal approach. Personal coaching The client is directly served by one professional coach, who is available for a relatively small number of entrepreneurs who may call upon her as they see fit. Personal budget The most innovative element of the project was the introduction of a personal budget. A personal budget was given to the participants to be used for business related investments only. This money allowed the participants to make initial investments needed for their enterprise. The method of the personal budget only works, however, under certain strict conditions. It is obvious that it should not be used as a means to present the project publicly and to attract participants. If it were for the personal budget only, potential entrepreneurs might participate on the basis of unjustified motivations. Taking into account these limitations, the method of awarding a personal budget to potential entrepreneurs contributes in important ways to the success and the professional approach of starting a business, and helps preventing the drop out of recently started enterprises. According to the evaluation report of the first project, "the personal budget made the difference between a professional or amateurish way of starting a business" (Gemeente Zaanstad 2004).
The personal and small-scale approach seems to make this project relatively easily replicable in other contexts. Some aspects however makes replicability more open to question. No contribution is required from the participants. Therefore, if the project were to be replicated elsewhere, it would depend on public funding. Otherwise, the format would have to be changed. The personal budget is a relatively costly aspect of the project. On the other hand, participants who become employed as a result of this programme no longer depend on unemployment benefits once they become self-employed. In strictly financial terms, then, the saving of public expenditures on unemployment benefits counterbalances the costs of the personal budget. To the degree that this measure is implemented in a welfare state regime, therefore, the measure may be replicable.
Kleurrijk Ondernemen is now in its third project phase. The first successful project was funded jointly by ESF-Equal funds, the municipality and the province. Thanks to the positive result of the project and the municipality's continued aim to support self-employment, the second project was started. The third project is completely funded by the municipality.
The continued support for the project has many benefits. Entrepreneurs can count on continued business support within their municipality. Investments and efforts made during the first project paid off in marketing terms as the reputation of the project grew, making it easier to find applicants during the second project. The second and third project could also be adapted based on what was learned during the first project. This included transferring the intake meetings and management of personal budgets from the municipality to Mind4Steps, as well as setting up a trial period in the contract of the applicant.
Key learning points
- A small-scale project, with a direct and personal relation between the potential entrepreneur and the professional coach can be effective and efficient. A good balance between input and output can be obtained, with the further benefit of a very positive experience for the participants.
- A small-scale project provides the opportunity for intensive and frequent mutual contacs between the participants. This is of great value to business start-ups, since it promotes mutual support, motivation, and social networking, as well as business between participating entrepreneurs.
- Under certain conditions, a personal budget for start-ups to be spent on business related expenditures seems a highly effective means to successfully and professionally promote the start-up of new businesses.
Municipality of Zaanstad Bannehof1 1544 VX Zaandijk Postbus 2000 1500 GA Zaandam F: + 31 75681 63 11 T: +31 756559111 W: http://www.zaanstad.nl Contact: Cecile de la Rambelje Department of Economic Affairs E : c.rambelje@Zaanstad.nl
Mind4steps Polderpeil 312 2408 SE Alphen aan den Rijn E: email@example.com T: +31 623363960 W: http://www.mind4steps.nl Contact: Eva Bunnik
Websites: Kleurrijk Ondernemen: http://www.ko-zaanstad.nl/
Interview with: Eva Bunnik, Director of Mind4steps.
Documents: Ministry of Social Affairs and Employment. (2005). Ondernemen Loont. Vijf praktijkvoorbeelden bij gemeenten. [Enterprising pays off. Five examples at municipalities] http://www.vng.nl/Docu menten/ExtranetJSez/ WI/WWBwerk _ Ondernemen _Ioont_ vijCpraktijkvb _ biLgem. pdf Zaanstad Municipality. (August, 2007). Kleurrijk Ondernemen 2005/2006. Zaanstad Municipality. (September, 2007). Kleurrijk ondernemen; een project voor etnische en vrouwelijk startende ondernemers. [Colourful entrepreneurship; a project for ethnic and female starting entrepreneurs].
1 The BBZ is a facility created by the Ministry of Social Affairs and administered by municipalities. Under this scheme training and business advisory services for starting entrepreneurs (on welfare) are financed. In addition, there is a special lending facility whereby an unsecured loan can be granted.