Starting a Business After Being Laid Off

Being laid off from your job is never an easy situation, but once the shock has worn off you may find yourself plotting your next move. Why not do some research, purchase some small business financial software and go into business for yourself?

A number of people who were laid off from a job have turned the event into an opportunity to do what they have wanted to do for years. Chances are there is a market out there for the skills you already have, which could lead to an exciting new career as an independent contractor or consultant in your field.

Or, alternatively, maybe this is just the right opportunity to take your life in an entirely new direction and follow your passion into a different sector. Just remember to look at current economic trends before choosing your new area of business.

Benefits of starting your own business

Many people are attracted to starting their own company because they want to be their own boss. Working for yourself can provide freedom, independence and a profound sense of satisfaction as you watch your business grow and succeed and monitor your financial progress with small business financial software.

Challenges of starting your own business

Many of the support networks you may have taken for granted in your prior job are not present for the self-employed - you will have to create your own. For example, if a computer breaks down or an employee causes a problem, it is up to you to deal with it. But the vast majority of business owners feel the benefits far outweigh the inconveniences - and they even relish meeting each new challenge.

Choose the right idea

When considering what type of business to start, you can begin by researching which industries are currently growing and thriving - and which are struggling. Even if your prior expertise is in a particular sector, you may not want to automatically assume that is the best type of firm for your talents. Think about the way your knowledge may translate into a variety of areas.

Alternatively, some people achieve success and satisfaction from opening a franchise. This option may appeal to those who prefer to take advantage of the built-in support and tried-and-tested business model offered by an established enterprise.

Make a plan

It's been said many times before, but it bears repeating: if you want your company to succeed, write a business plan. Homework and hard work are part and parcel of the entrepreneur's existence. A business plan also provides the opportunity to assess risk and opportunities before making a financial commitment.

Think of your plan as the roadmap for your new project, laying out your objectives and helping you anticipate challenges. If you are borrowing money to fund your business, banks and other lenders will also expect to see financial statements including a balance sheet, income statement and cash flow analysis. These reports can be generated by using a small business financial software package.

Use your contacts

Your existing contacts can be invaluable to your new start, particularly if you are going into the same area of business in which you were laid off. Prior collaboration means that you do not have to prove yourself to earn a new client's confidence. Remember that client who gave you a glowing review on a past project? Drop them a line and let them know you are striking out on your own.

Even people from your old job can be useful for information, leads or advice. The marketing manager at your previous company may be able to give some tips on getting noticed, while the firm's accountant may be able to recommend a trusted colleague you could employ for tax help.

Make a financial plan

If you have never run your own business before, this may be the first time you are thinking about the nuts and bolts of obtaining financing. There are a number of options to choose. The Small Business Administration website can provide more information and advice for how to fund your start-up.

Some people who have been laid off pour their severance pay directly into their new venture. Whether or not this is a good idea depends largely on your personal circumstances, but the main thing to remember is to make a considered and well thought-out decision rather than diving headlong into a significant financial commitment.