Lost your job and considering starting a business instead of looking for a new job? This guide will help you get started.
Being let go from your job can be tough. After all, most of us put an immense amount of pride and effort into our work, and being laid off for any reason is painful and embarrassing. In the aftermath of getting fired, many people flounder as they decide what move to make next. Searching for a new job is often a full-time job in and of itself, and it can be a very long, frustrating process, with jobseekers routinely spending over a year looking for a new career. Given these challenges, many people decide to make immediate use of their skill sets and start their own businesses in the wake of being laid off.
What Type of Business Should You Start?
If you’re going to go into business for yourself, you must first decide what type of company you want to create. In general, most people decide to leverage their existing skills and experience to create a consulting or freelancing business that is closely tied to their old career. For example, if your previous job was in marketing or IT, you can build a business around providing those services on an individualized basis. Typically, this approach is the easiest way to go about starting a company.
Alternatively, you may want to use your recent unemployment as an opportunity to start a business in an entirely unrelated field. On the one hand, this path presents more challenges. On the other hand, motivation is a necessary ingredient in starting any new business, and losing your job can incite unprecedented levels of motivation and productivity. If you feel like being laid off was the wake-up call you needed to start following your dreams, then use that motivation to start a totally new endeavor.
Regardless of what type of company you create, just remember that passion will only get you so far. Ultimately, if your new enterprise is going to be successful, it needs to provide a good or service that is valuable. Don’t just follow your heart. Be strategic and carefully consider all of your options when starting a company.
How Do You Get Your Business Off the Ground?
Once you’ve decided on a plan for your business, the next step is to get it up and running. Fortunately, the U.S. Small Business Association provides a number of tools for emerging entrepreneurs, including tips for starting and managing your company as well as information about applying for loans and grants to serve as seed money.
Also, early on you’ll need to make a list of the practical elements your business requires, such as an office space, a computer, supplies and maybe a dedicated phone line. Also, you’ll have to decide whether or not your company needs a website. While many businesses have their own web pages, it’s sometimes more of a luxury than a necessity. In fact, a lot of entrepreneurs get by using a combination of existing social media sites, such as LinkedIn, Facebook and Twitter, all of which can add legitimacy to your business.
Most of the other major questions you’ll need to answer involve finances. From a practical perspective, you’ll need to make sure that you have enough money to start a company. In addition to the initial startup costs, it takes a little bit of time for many small businesses to become profitable. By going into business for yourself, you and your family will need to accept the fact that there might be some lean days in the immediate future.
Before getting too far down the road on your new business, you’ll definitely want to talk to an accountant. Not only will a CPA help you to better understand the financial ins and outs of the business you’re about to start, but he or she can also provide invaluable advice about the taxes that will eventually arise from your new endeavor. Additionally, it’s wise to invest in small business accounting software, such as QuickBooks or, if you’re watching your budget, Wave, which offers many basic functions for free.
What if Your Business Fails?
If you’re going to start a business, you need to go in with your eyes wide open. The fact of the matter is that most small businesses fail, but even if your new company never turns a profit, it can help your career in the long run. After going into business for themselves, many workers re-enter the traditional corporate world with a new set of skill that are highly desired by employers. By running your own company, you’re gaining invaluable experience in marketing, sales, finance, and management, all of which can translate into necessary skills in virtually any business setting.
In fact, many entrepreneurs create their companies with the knowledge that they will only be temporary. If you know that your job search is going to take six months or a year, what better way to cover that employment gap than by starting your own business? While some hiring managers may look down on the six months or so you spent freelancing, others will respect the hard work and ingenuity it took to run your own company. Also, explaining your freelancing or consulting business is much easier than explaining a glaring gap in your work history.
Starting a new business under any circumstances isn’t easy, and the aftermath of being laid off can be a particularly trying time. However, if you have the motivation and the financial stability, creating your own business, even on a temporary basis, can be beneficial. Plus, in the event that your new enterprise is wildly successful, you can work for yourself indefinitely and never have to worry about getting laid off again.
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