The New Enterprise Incentive Scheme (NEIS) aims to help eligible unemployed start their own businesses.

It’s every Australian’s dream – running their own business. And it’s one that thousands of unemployed people are achieving each year, courtesy of the New Enterprise Incentive Scheme (NEiS). This is a self-employment program that helps eligable job-seekers come off income support into the work place by starting their own enterprises, and it is extremely successful, helping to generate around 7,000 new businesses each year.

Centrelink advises customers about the scheme, and refers participants to Managing Agents such as the BEC contracted by The Department of Employment & Workplace Relations. NEiS managing agents – typically business consultants, registered training organisations, business enterprise centres or community organisations – evaluate participants’ prospects of success, help them develop business plans on their proposed business. Management training is key aspect of the programme and, once the new business is up and running, managing agents continue to provide advice and mentoring throughout the first year of operation. They also facilitate networking between participants, which can spark some useful synergies. 

Through this intensive preparation period, participants are eligible for an allowance equivalent to Jobsearch / Newstart (non-means-tested) for up to 12 months.

The scheme is particularly effective for long-term unemployed, who make up 40 per cent of participants. According to Irene Dewsbery, Treasurer, National NEiS Association "The scheme tends to suit people from a trade, small business or management background; in some cases, they are older workers who have been made redundant, who translate a hobby into a careers," she comments. "It’s also ideal in regional and farming areas, where there is a tradition of self-employment."

Most NEiS participants have very clear ideas about the type of enterprise they’d like to establish. Those most likely to succeed are service-based enterprises that don’t require much start-up capital or infrastructure. "We’re not here to train participants in any given industry, but to help them set up the business," explains Irene. "You have to be able to demonstrate that you can deliver a product or service. If you want to set up as a computer consultant, for example, or in desk top publishing, you must be able to prove you have the necessary skills, and that there is a demand for the service. Participants also have to show that they can budget; even though many of them are on a shoestring, they can still do that by showing that they haven’t got high credit card debt, for example."

Around 75 per cent of all small businesses fail in their first year simply because their principals haven’t done their homework – failing to plan, research or properly cost their products and services.By contrast, only 25 per cent of NEiS projects meet a similar fate, thanks to their intensive grounding in business management issues.

"NEiS is a highly effective program which has resulted in a number of viable businesses, not only creating employment for the owners, but creating more employment as they take on more staff," says Centrelink’s David Powell, Business Manager, Employment Services Support. "It’s not an option for every customer – but for those for whom it is, NEiS is often a springboard to success.